One must apply for a CIDB license in Malaysia if one want to launch a construction-related business.
With the Levy it imposes on all big construction projects and the required courses it offers, the Construction Industry Development Board is an unavoidable presence for those working in the sector in Malaysia.
The construction industry’s dedication to quality and productivity is ensured by a CIDB license through professionalism, ongoing innovation, and in-depth expertise.
REGISTRATION OF CONTRACTORS
According to the act, no one is permitted to perform any construction activity unless they have registered and are in possession of a current certificate of registration granted by CIDB.
Non-registration is a crime that can result in a maximum RM 5,000 fine.
Local contractor registration is time-based. For a minimum of one year and a maximum of three years.
Local contractors are eligible to be registered in certain categories, such as civil engineering construction, building construction, and mechanical and electrical.
Construction work outside of a registered category cannot be executed by a contractor.
CIDB GREEN CARD
The CIDB Green Card, formally known as the CIDB Construction Personnel Registration Card, is a credential issued by CIDB Malaysia. Its purpose is to certify that the holder is registered with CIDB Malaysia and qualified to undertake construction work on any construction site.
To increase safety at building sites, the Construction Industry Development Board of Malaysia (CIDB) green card program integrates registration and accreditation of construction workers. Without a Green Card, workers cannot enter a building site.
Categories or Grades
A contractor is not permitted to make an Invoice that is greater than the value of the construction works stated in the registration grade.
There are seven stipulated registration grades for each category, as shown below.
Depending on the registration grades, a different registration fee is due to CIDB.
The following classifications or grades are based on tendering capabilities:
- G1 not exceeding 200,000
- G2 not exceeding 500,000
- G3 not exceeding 1 million
- G4 not exceeding 3 million
- G5 not exceeding 5 million
- G6 not exceeding 10 million
- G7 no limit
QUALIFYING CRITERIA TO REGISTER FOR A CIDB BUSINESS LICENSE IN MALAYSIA
Construction companies must fulfill the following criteria in order to register with the CIDB for a business license:
REGISTRATION WITH THE MALAYSIAN COMPANIES COMMISSION (SSM)
You can refer to Malaysia company incorporation for more information on company registration.
THE BUSINESS AND/OR ITS TECHNICAL STAFF MUST HAVE YEARS OF RELEVANT EXPERIENCE IN THE INDUSTRY
- Execution of all primary contracts and/or designated subcontracts
- The applicants’ execution of subcontracts must be backed up by proof.
- Financial capability will be assessed based on the paid-up capital of applicants whose companies are registered with the Registrar of Companies (ROC).
- Financial capability will be assessed in terms of net capital value for applicants (sole proprietorship or partnerships) registered with the Registrar of
- Businesses (ROB), which can be obtained from any or all of the following:
- Copies of bank statement of current account for the latest 3 months
- Copy of current balance from savings accounts
- Copy of uncharged and valid fixed deposit statements
- Bank certification related to overdraft facilities, if relevant
- ASB Shares
- The job that full-time employees perform must be in accordance with their registration grade and category, be compliant with applicable EPF contribution statements, and have recognized qualifications.
GOVERNMENT EMPLOYMENT CERTIFICATE (SPKK)
According to the requirements outlined in the Treasury Circular No. 6 of 2012 and the modified Treasury Instruction No. 3 years 2012 by the Malaysian Ministry of Finance, SPKK holders may engage in any government contracting in the sector of construction.
To qualify the company to apply for SPKK, applicants must ensure they have Local Contractor Registration Certificate (PPK)
Application clearance is subject to SPKK registration requirements.
REGISTRATION OF CONTRACTOR CONSORTIUM OR JOINT VENTURE
A group of two or more businesses that have been hired to carry out a construction project is known as registration of consortium or joint venture contractors. The combined firm is not incorporated or registered as a business with Malaysia’s Companies Commission (SSM).
Depending on the project that is awarded, the company needs to be registered with CIDB. The project as specified in the certificate of registration is the only project for which the granted Certificate of Registration is valid. The two (2) categories of consortium or joint venture contractor registration with CIDB are generally as follows:
- i) Local Consortium/ Joint Venture Contractors Registration Certificate.
- ii) Foreign Consortium/ Joint Venture Contractors Certificate of Registration.
FOREIGN CONTRACTOR REGISTRATION
The registration of foreign contractors is project-based. The bearer of a foreign contractor’s registration certificate is only allowed to carry out the one project listed on the certificate. Within 14 days of the certificate’s expiration, the foreign contractor must submit an application to CIDB for an extension of the certificate’s validity.
HOW TO APPLY FOR A CIDB LICENSE IN MALAYSIA
Go to the iBINA website and select “Mohon Sekarang” and “Pendaftaran Lesen Kontraktor CIDB.”
Next, the applicant must enter all the required information, including the company name, applicant’s name, phone number, email, application type, GRED, and registration term. Verify that all the information is accurate.
Before moving on to “Hantar Pemohonan,” click “I agree with the terms & conditions” after completing all the fields. The applicant will hear from the iBINA team within 24 hours. Prepare the paperwork and submit the documents and the application will be processed.
Depending on CIDB, the applicant will receive the CIDB licence through the registered email in 5-7 working days.
RESPONSIBILITIES OF REGISTERED CONTRACTORS
- The issued Registration Certificate cannot be transferred.
- The Board is permitted to regularly review the contractor’s registration grade.
RESPONSIBILITIES AND OBLIGATIONS OF THE CONTRACTOR
- The contractor is required to comply with the conditions of the Akta Lembaga Pembangunan Industri Pembinaan Malaysia 1994 (Act 520) (PINDAAN 2011), the rules adopted under it, and any terms, limitations, or restrictions imposed by the Board from time to time.
- The contractor needs to renew CIDB License. After this Certificate expires and until it is renewed, the contractor is not permitted to take part in any tenders or perform any construction work.
- The contractor is prohibited from taking on any construction projects that are more expensive than those that are allowed for his registration grade, and he is also prohibited from working on projects that fall outside of his registration category.
- Within fourteen (14) days of being granted the contract, the contractor must submit information regarding any construction work or project.
- The contractor is required to provide any information that the Board may occasionally request.
- In the contractor’s place of business, a copy of the Certificate of Registration certified by the Board or the Certificate of Registration issued by the Board shall be on display.
- At each construction site, the contractor is required to post the registration number on the signboard.
- The rules outlined in the CIDB Contractor Code of Ethics Book must be followed by contractors.
- The Board-accredited and certified construction workers and site supervisors must be chosen by the contractor.
- A valid Construction Personnel Card is a requirement for all workers on construction sites.
- The contractor is responsible for making sure that any items or building materials used adhere to the MS (Malaysian Standard) or other standards that have been approved by Malaysian authorities and are recognized by the Board.
Regulation 15 of the Contractor Registration (Construction Industry) Regulations of 1995 states that the Board may revoke or suspend the registration of any contractor registered under these Regulations in the following circumstances:
- The certificate holder has been declared bankrupt;
- the contractor has been the subject of a winding-up petition;
- certificate holders have violated any of the Act’s or registration regulations;
- the certificate holder has obtained the certificate by providing a false certificate or statement, whether in writing or otherwise;
- the certificate holder has abandoned the ongoing construction project; or
- the certificate holder has violated any other provision of the Act or registration regulations.
- The Certificate Holder has violated or failed to comply with; or has helped in the breach of any terms, conditions, or limitations imposed by CIDB.
- he Certificate Holder is found guilty by the court or any investigative body established under any written law for being irresponsible in the implementation of the construction works carried out.
FOREIGN CONTRACTOR REGISTRATION WILL BE CANCELED, AND SUSPENDED FOR THE FOLLOWING REASONS –
- The foreign contractor has violated or disobeyed any provision of the Act;
- the foreign contractor is in violation of any other written law;
- the foreign contractor has been declared bankrupt;
- the winding up petition relating to the foreign contractor has been filed; and
- the foreign contractor has violated or disobeyed any bankruptcy sentence.
Reach out to us at Relin Consultants for more information.
What is a CIDB license?
A CIDB license is a permit issued by the Construction Industry Development Board in Malaysia that allows a contractor or construction-related business to operate legally within the construction industry.
What are the different types of CIDB licenses?
CIDB issues various types of licenses, including G1, G2, G3, G4, G5, G6, and G7 licenses. The license type you need will depend on your business activities and the size of the projects you undertake.
What are the eligibility requirements for a CIDB license?
The eligibility requirements for a CIDB license may vary depending on the license type. Generally, you must have relevant experience in the construction industry, meet certain financial requirements, and have the necessary qualifications or certifications.
How do I apply for a CIDB license?
You can apply for a CIDB license online through the CIDB e-Registration system or by visiting a CIDB branch office. You will need to provide certain documents, pay the required fee, and wait for your application to be approved.
How long does it take to get a CIDB license?
The processing time for a CIDB license application can vary depending on the license type and the completeness of your application. It may take several weeks or months to receive your license.
How long is a CIDB license valid?
CIDB licenses are typically valid for one year. You will need to renew your license annually to continue operating legally in the construction industry.
What are the consequences of operating without a CIDB license?
Operating without a CIDB license can result in legal and financial penalties, including fines, imprisonment, and project delays. It is important to obtain the necessary license before starting any construction-related activities.