Business License Application in Malaysia

Before a business can legally start operating, businesses are required to comply with some form of licensing, which could be a general license, an industry/sector specific license or activity specific license. Business licenses are required by the legislation and administered by various government agencies, statutory bodies and local authorities. Business licenses include registrations, approvals, licenses and permits. The compliance requirements vary by industry, business activity and location.

Business licenses can be categorized into 3 different logical groups, namely:

• General licences
• Sector Industry Specific licences
• Activity Specific licenses

General Licences
General licences are licences that are required and shall be applicable once the investor has decided to start a business in Malaysia.

List of General licences, which may be applicable to any business, include:

• Company Registration
• Company and Employees Income Tax Registration
• Employees Provident Fund
• Social Security Organisation
• Human Resources Development Fund
• Business Premise Licenses and Signboard Licenses
• Businesses in Malaysia are required to apply for business premise licenses and signboard licenses from the respective State Authorities. The requirements for the application may vary according to each local authority.

In general, the following documents are required for Business Premises License and Signboard License application. However, the list of documents for the application may vary according to each local state authority.:-

For Company:

1. Certificate of Incorporation (Form 9/ Notice Section 17) – 1 copy
2. Return of Particulars of Directors, Managers and Secretaries (Form 49 / Notice Section 58) – 1 copy
3. Photos of your business premise (front and interior of premise)
4. Any one Director’s NRIC / Passport as stated in Form 49 / Notice Section 58 – 1 copy
5. Sample of signboard indicating design and color (if applicable)
6. Photos showing location of signboard (if applicable).

For Limited Liability Partnership (LLP):

1. Certificate of Registration – 1 copy
2. e-SSM Business Profile – 1 copy
3. Photos of your business premise (front and interior of premise)
4. Any one Partner’s NRIC / Passport as stated in Business Profile – 1 copy
5. Sample of signboard indicating design and color (if applicable)
6. Photos showing location of signboard (if applicable).

For Enterprise (Sole-proprietor / Partnership)

1. Certificate of Registration of Business (Form D) – 1 copy
2. e-SSM Business Profile – 1 copy
3. Photos of your business premise (front and interior of premise)
4. Copy of any Business owner/Partner’s NRIC as stated in Form 49 – 1 copy
5. Sample of signboard indicating design and color (if applicable)
6. Photos showing the location of signboard (if applicable)

For business premise in Kuala Lumpur, you may visit the following DBKL links for more information.

Sector / Industry-Specific Licences

Sector/Industry Specific licences are licences unique to a particular industry or sector that are specified by the Government. This involves major policies that controlled the development of certain industries or sectors in line with the development policy of the country.

Kindly refer to the MalaysiaBiz in order to ensure which Government Department Authority should you liaise with in regards to the Sector/Industry Specific licences.

Some examples of Sector/Industry Specific licences are:

• Licences related to the Manufacturing Sector
• A company with a paid up capital/shareholder’s fund not exceeding RM2.5 million or manpower less than 75 people may apply for a confirmation letter that the company is exempted from manufacturing licence approval. The applicant should submit a copy of form ICA 10 together with a copy of the following documents:-
  – Memorandum and Articles of Association / Constitution
  – Certificate of Incorporation (Form 9 / Notice Section 17)
  – Registered Address (Form 44 / Notice Section 14 and Notice Section 46(3) )
  For further information, please visit MIDA’s website at http://www.mida.gov.my
• Licences related to the Wholesale, Retail Trade
• The most common license required for a foreign owned company is Wholesale, Retail Trade (WRT) License.This WRT license is applicable to any Foreign Participation (i.e. foreign equity at 51% and above) in the Malaysia Distributive Trade Services include wholesalers, retailers, franchise practitioners, direct sellers, suppliers, who channel their goods in the domestic market, and commission agents or other representatives including those of international trading companies.The WRT license is required by all the said business sectors before they can apply for a professional work permit. For WRT, the minimum paid up capital requirement is RM 1 million, with company full set-up i.e. with business premises supported with valid tenancy agreement, phone line and etc. Please refer to official portal of Ministry of Domestic Trade, Co-operatives and Consumerism (MDTCC) for further details on WRT License at www.kpdnkk.gov.my
• Licences  related to the Telecommunication Sector
• Licences related to the Broadcasting Sector
• Licences  related to the Oil Exploration Sector
• When Setup Company in Malaysia, companies which wish to explore and develop upstream oil and gas reserves in Malaysia are required to sign a production sharing agreement with Malaysian state Oil Company Petronas.For further information, please visit Petronas website at petronas.com
• Licences related to the Construction
• All Companies involved in Building and Construction must obtain a licence from the Construction Industry Development Board (CIDB) before incorporating in Malaysia and before undertaking any construction and related activities in the country.For further information, please visit CIDB’s website at cidb.gov.my
• Licences related to the Banking Sector
• Under the Banking and Financial Institutions Act, 1989, the Malaysian Central Bank licenses and regulates businesses such as banking, money broking, discount houses, provision of credit and finance, merchant banking, deposit taking and certain other financial businesses.For further information, please visit Bank Negara’s website at bnm.gov.my.

Activity-Specific Licences

Activity-Specific licences are licences that regulate particular activity and could be applicable to one or more Industries or Sectors. This category of licence requires investor to comply with sets of specific guidelines designed to protect the interest of the citizen, employment, safety of workers, environment and general public.

Examples of Activity Specific Licences are:

• Certificate of Fitness for Certified Machinery
• Approval for Expatriate Post
• Approval to install/resite/alter Air Pollution Control Equipment (bag filter and chimney)
• Building Plan Approval
• Sales Tax Licence

The above information is a general guide towards making the initial steps, decision and planning for the intended business by potential investors and business owners.

Business License

Before a company legally start operating in Malaysia, it is required to have certain Malaysia business licenses to operate and comply with. The requirements for Malaysia business license application may vary according to each local authority. Some of the Malaysia business licenses are required local Malaysian’s participation (in term of shareholding and directorship) in the application.

Below are some examples of Malaysia business licenses:

Local Council License (Business Premise License and Signboard License)

Local Council License is a simple license which you need to get from the local authority (e.g. MBJB for Johor Bahru) where your company’s physical office/shop located at. This license is mandatory for all companies that is operating in a physical office/shop.

WRT (Wholesale Retail Trade) License

WRT (Wholesales Retail Trade) License is for company with more than 50% foreign ownership participating in wholesale, retail, distributive trade, franchise, restaurant, trading, import and export business. This license is get from Ministry of Domestic Trade, Co-operative and Consumerism (KPDNKK). The minimum paid up capital requirement is RM1 million.

Manufacturing License (MIDA)

The Industrial Coordination Act, 1975 requires person(s) engaging in any manufacturing activity with shareholders’ funds of RM2.5 million and above or employing 75 or more full-time paid employees to obtain Manufacturing License. This license is get from MIDA (Malaysian Investment Development Authority).

Building and Construction License (CIDB)

All companies in construction related business (e.g. civil engineering, building construction and mechanical and electrical) are required to apply CIDB (Construction Industry Development Board) license.