Business licensing in Malaysia.

In this article, we have outlined the types of business licenses available in Malaysia and the industries they apply to.

Once you have registered your company in Malaysia, you must apply for the business licenses that are relevant to your business nature, because if you operate your company without required licences or permit, the government could close your company and/or impose severe penalties.

Types of business license in Malaysia

There are three types of business licenses in Malaysia:

• General licenses
• Sector/industry-specific licenses
• Activity specific licenses

What are general licenses?

General licenses are the necessary licenses you will need when you decide to establish a business in Malaysia.

General licenses include:

• Company registration
• Company and employee’s income tax registration
• Employees provident fund (EFP)
• Social security organisation (PERKESO)
• Human resources development fund (HRDF)
• Business premise licenses and signboard licenses

Business premise licenses and signboard licenses application

The business premise licenses and signboard licenses can be applied at the state authorities.

The following documents are required to apply for the business premise licenses and signboard licenses, but the documents may be different according to each local state authority:

Required documents for a company

• Certificate of incorporation (section 17)
• Return of particulars or directors, managers and secretaries (section 58)
• Photos of your business premise (front and interior)
• Sample of signboard indicating design and colour
• Photos showing location of signboard

Required documents for a limited liability partnership

• Certificate of registration
• E-SSM business profile
• Photos of your business premise (front and interior)
• Sample of signboard indicating design and colour
• Photos showing location of signboard

Required documents for an enterprise (sole proprietorship or partnership)

• Certificate of registration of business (form D)
• E-SSM business profile
• Photos of your business premise (front and interior)
• Sample of signboard indicating design and colour
• Photos showing location of signboard

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What are sector/industry-specific licenses?

The sector/industry-specific licenses are licenses that are needed for a specific industry or sector specified by the Malaysian government.

Types of industries or sectors

• Licenses related to the manufacturing sector
  • A company with a paid-up capital not exceeding RM 2.5 million or less than 75 workers may apply for a confirmation letter that the company is exempted from manufacturing licenses. The company must submit a copy of form ICA 10 with the following documents:
  • Copy of memorandum and articles of association/constitution
  • Certificate of incorporation (section 17)
  • Registered address Section 46)
  • You must apply for a manufacturing license if your company:
    • Is involved in high technology or projects for new manufacturing activities
    • Is involved in the expansion and adaptation of agricultural projects
    • Is involved in new agricultural projects
    • Wants to expand products
    • Is involved in the commercialisation of R&D findings
• Licenses related to wholesale and retail trade
  • Most common license for a foreign company is the wholesale, retail trade (WRT) license.
  • This license is available for businesses that engage in distributive trade services including wholesalers, retailers, franchise practitioners, direct sellers, suppliers, distributing goods in the domestic market and agents or representative of international trading companies.
  • The minimum paid-up capital requirement is RM 1 million, and must have a full set-up company such as having a business location with valid tenancy agreement and a phone line.
  • Foreigners whose businesses are involved in the services above must get a WRT license before they can apply for the DP10 work permit with the Immigration Department of Malaysia.
• Licenses related to the telecommunication sector
• Licenses related to the broadcasting sector
• Licenses related to the oil exploration sector
  • For companies which want to set up oil and gas reserves in Malaysia, they are required to sign a production sharing agreement with the Malaysian state oil company Petronas.
• Licenses related to the construction sector
  • Companies that engage in building and construction activities must obtain a license from the Construction Industry Development Board (CIDB).
• Licenses related to the banking sector
  • The Malaysian Central Bank licenses and regulates businesses involving banking, money broking, merchant banking and other financial businesses under the Banking and Financial Institutions Act, 1989.
• Licenses related to public houses
  • If you are to open a restaurant that sells liquor or alcoholic drinks, you would need to obtain a Public House License. This license can be applied at the local authorities nearby. The license is valid for six months to one year.
  • There are three times liquor can be served according to the Public House License:
    • 10.00 to midnight
    • 10.00 to 22.00
    • 10.00 to 21.00
  • To sell liquor during festive seasons, you must get the Temporary Public House License. This license is only valid for the seasons it was applied for.

What are activity-specific licenses?

This type of license regulates specific activities and can be applied to more than one industry or sector. There are a set of specific guidelines that serve the purpose of protecting the interest of the citizens, employment, safety of workers, environment and the public.

Activity-specific licenses include:

• Certificate of fitness for certified machinery
• Approval of expatriate posts
• Approval to install, resite or alter air pollution control equipment
• Building plan approval
• Sales tax license
• Fire brigade approval

Basic requirements for the business license application

• Copy of business registration certificate/confirmation of establishment (section 17)
• Copy of section 58
• Copy of section 78
• Copies of proposed spatial grants, titles or lease agreements
• Copy of Construction Certificate of Occupation
• Location map or plan
• Use of floor installations or fountains
• Ad pitch (advertising must meet the requirements for language requirements)
• Photo of applicant’s passport
• Copy of applicant NNKN form

Business license payment method

Payment for licenses can only be made at the City Council/City Hall by:

• Cash
• Money order
• Remittances
• Bank draft
• Credit card

Business license processing time

The license approval process can take from one month to six months, but this will also depend on the type of industry license. Before approving the application, the ministry will conduct a business inspection.

Conclusion

All business licenses that your business industry requires should be registered to complete the establishment of your new company in Malaysia. To ensure you comply with the license regulations and compliances, we recommend engaging with services of a professional corporate service like Acclime.