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Starting a business can be an extremely rewarding experience, but it's important to make sure you're aware of the necessary steps and licenses needed in order to establish a presence in Malaysia legally. The type of license you need to apply for will depend on the type of business you are operating. This article provides an overview of what you need to know about business licenses and where to get them.
General licenses are necessary for all businesses in Malaysia, regardless of the size of the company. This will comprise of the following:
Company and employee’s income tax registration
Employees Provident Fund
Social Security Organisation
Human Resources Development Fund (HRDF)
Business premise licenses and signboard licenses
For the business premise license, bear in mind that the price may vary depending on the nature of your business. There are also documents to submit as part of your application for the business premise license and signboard license. This can depend on your business entity type in Malaysia and the requirements as per your local state authority.
For instance, Limited Liability Partnership (LLP) entities will need to present photos of the business premise as well as a copy of the Certificate of Registration, e-SSM Business Profile and the NRIC or passport of any partner involved. In addition, the design of the signboard – along with photos showing where it will be positioned – should be attached to your application.
Do note that once you are granted the signboard license, you will need to keep track of its expiry date. It will be valid for one year from the date of application approval, after which it will need to be renewed. To learn more on the “how-to” of licensing your company in Malaysia, you can check the SMEInfo Portal for the licenses applicable to your business.
A business may need to procure a Sector/Industry-Specific license should they come under a certain sector or industry listed by the relevant Government Department Authority. For example, it is mandatory that manufacturing companies apply for a license as long as they are involved in:
High technology or projects for new manufacturing
Expansion and adaptation of agricultural projects
New agricultural projects
Commercialisation of R&D finding
A manufacturing company intending to expand their products will also need a license.
That being said, manufacturing companies with a paid-up capital of at least RM2.5m or less than 75 full-time employees are given the exception and may not need licensing. If you are eligible, take note that you will need to present a copy of the following documents:
Form ICA 10
Certificate of incorporation (Notice Section 17)
Memorandum and Articles of Association/Constitution
Registered address (Notice Section 46)
For more information, you may refer to the MalaysiaBiz to check which Government Department Authority is responsible for issuing licenses to businesses in trading, construction, banking and other sectors.
Activity-Specific licenses are specific to the type of business activity that is conducted. This can apply to one or more industries or sectors in Malaysia. Examples of such licenses include:
Certificate of Fitness for Certified Machinery
Approval for Expatriate Posts
Approval to install/resite/alter Air Pollution Control Equipment (bag filter and chimney)
Building Plan Approval
Sales Tax License
You can proceed to obtain a license from the Pihak Berkuasa Melesen (PBM) when you have chosen a company name and registered your business online. Once your business is up and running, there are many other factors to consider, from the products or services you offer to the market you target. With careful planning and execution, you can give your company the best chance for long-term growth. This can include leveraging e-commerce platforms with secure payment gateways, focusing on your customer retention rate and shipping to customers overseas.