Business license in Malaysia

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Business License in Malaysia

In order to conduct your business legally in Malaysia, one would require some sort of permit or a license for their company. There are various forms of license in Malaysia which can be either general license, an industry license or even an activity based license. No matter the kind of license we are talking about, all of them are monitored by different governing bodies, agencies, statutory bodies and even local authorities. Business licenses are required by law or every company no matter what your operations are. The requirements for different licenses may vary depending on the industry, business activity or even the state you are working on.

In Malaysia, business license can be sorted out in three different groups;

  1. General License
  2. Sector or Industry Specific License
  3. Activity Specific License

General License: These are licenses that are required and are only applicable once the investor has gone on with his decision to conduct his business in Malaysia. The list o General Licenses are given below

  1. Company Registration
  2. Company Income Tax Registration
  3. Employee Tax Registration
  4. Social Security Organization
  5. Human Resources Development Fund
  6. Employees Provident Fund
  7. Signboard Licenses
  8. Business Premises Licenses

Industry or sector specific license

These kinds of licenses are given out to the specific industry. The government decides which sectors will fall under these licensing. It is done more or less to ensure that these certain industries in the country develop better.  Examples of such industry or sector include the following;

  1. Manufacturing Sector-Anyone getting into the manufacturing industry should obtain their manufacturing licenses. In order to do so, they should provide certain documents including their Memorandum and Articles of Associations, Certificate of Incorporation, and the Registered Address. Your company can be exempted from needing such a license only if the company’s paid up or shareholder’s fund does not exceed RM 2.5 million or if the company has a labor force of less than 75.
  2. Wholesale or retail trade- Arguably the most sought out type of license in Malaysia is the Wholesale Retail Trade (WRT) License. It is very common among foreign-owned companies. The license is required by wholesalers, retailers, direct sellers, suppliers and even franchise practitioners. Commission agents and representatives of international trading companies looking to sell in the Malaysian market will also require the WRT license.
  3. Construction- Any company that will partake in the construction industry will have to apply for the Construction license from the Construction Industry Development Board (CIDB). They are not legally cleared to take any sort of construction related projects before they obtain their construction permits.
  4. Banking Sector: If you wish to start a start your company in the banking sector, then you need a specific license for that as well. According to the Banking and Financial Institutions Act of 1989, all sorts of banking related activities are controlled and looked after by the Malaysian Central Bank. They are also responsible for providing licenses to financial institutes which deal with activities such as banking, money broking, provision of credit and finance, merchant banking, and other such businesses.

Activity Specific Licenses

Activity Specific Licenses are the types of licenses which are issued in order to monitor certain activities.  This can be applicable to the certain industry or just a specific sector of the economy. The basic purpose of issuing such licenses is to ensure that the investors are aware and duly comply with certain guidelines set by the government. This ensures that the rights of workers are maintained, the interests of citizens are protected, the safety of labor is ensured and the environment is not damaged.

Primes examples of Activity Specific Licenses are given below

  1. Approval for expatriate post
  2. Certificate of fitness for certified machinery.
  3. Sales Tax License
  4. Approval to install or alter Air Pollution Control Equipment
  5. Building Plan Approval

Different kinds of business require different types of licenses. All these are issued by the various departments of the government. Here are a few examples of the types of licenses and the departments of government that issues them.

Government Department License
Banking Central Bank License for Banking, Financing and Leasing
Construction (CIDBEL) Construction Industrial Development Board and Engineering License
Direct Selling Direct Selling License
For Imports & Exports Wholesale Retail Trade (WRT) License for Trading, any Import & Export, Consultancy and for Restaurant Business
Education Licenses for establishing Schools, Colleges, Universities, Tuition Centers and Language Centers
Hotel For Budget Hotel License and Luxury Hotels
Media Publication License for Magazines and Books. Broadcasting License for Music, Singing, TV and Radio
Transport Car Rental and Vehicle Leasing License.
Factory/Manufacturing Manufacturing Licenses
ICT Multi-Super Corridor (MSC) License
Tourism Inbound, Outbound, Ticketing License