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BUSINESS LICENSE IN MALAYSIA
You must obtain the proper business permits after establishing your business in Malaysia. The type of license you need in Malaysia depends on the nature of the industry you are in.
A company undertaking generic business activity such as general consulting or management consulting is exempted from applying for a business license if you do not intend to apply for a work visa to live and reside in Malaysia.
The government may dissolve your company or inflict severe fines if you operate it without the required licenses or permits, so once your company has been registered in Malaysia, you should obtain confirmation from a professional firm whether any licenses apply to your business activity.
TYPES OF BUSINESS LICENSES IN MALAYSIA
Malaysia has three main types of business licenses, as below.
- General licenses
- Sector or industry-specific licenses
- Activity specific licenses
General licenses
General licenses are the licenses that you will require if you decide to start a business in Malaysia. General licenses include the following.
-
Business Premise Licenses
There are various kinds of business premises licenses. Depending on the type of business, you may need a specific business premises license.
The relevant state town council will evaluate and decide if a business comes under the suitable license category where an application has been made for some business operations that are not as simple.
Before applying for a business premise license, certain enterprises must also gather supporting documentation from the applicable ministry and/or other regulatory authorities.
-
Signboard Licenses
Before displaying or exhibiting any signboard on your premises, The company must obtain a signboard license.
The nature of your business, as well as your company name and business license number, must be clearly stated on the signboard in Malay (Bahasa Malaysia).
Furthermore, you must confirm that the signboard will not be installed above any glass structure, window, façade, or block any view or pathway for the town council to accept its installation on your property.
Any images of alcoholic drinks, cigarettes, or pornographic pictures are also forbidden from being shown on the signboard.
Some other standard business licenses that can easily secure with a simple registration with the relevant authorities include the following.
- Company registration license
- Company income tax registration
- Employee income tax registration
- Employees provident fund
- Human resources development fund
- Social security organization
- Employees provident fund (EPF)
- Social security organization (SOCSO)
- Human resources development fund (HRDF)
Sector or industry-specific licenses
Sector/industry-specific licenses are required by the Malaysian government for a specific industry or sector.
| Industry | Authority |
|---|---|
| Banking | Bank Negara Malaysia (BNM) |
| Construction | Construction Industry Development Board (CIDB) |
| Direct Selling | Malaysian Direct Distribution Association (MDDA) |
| Distributive Imports and Exports | Malaysian Ministry of Domestic Trade and Consumer Affairs (MDTCA) or KPDNKK locally known |
| Education | Ministry of Education |
| ICT | Malaysia Digital Economy Corporation (MDEC) |
| Media | Malaysian Communications And Multimedia (MCMC) |
| Manufacturing | Malaysian Investment and Development Authority (MIDA) |
| Transportation, Tourism, and Hotel | Ministry of Tourism, Arts and Culture Malaysia (MOTAC) |
Activity specific licenses
This license governs certain activities and can be used in more than one business or area. There are specific criteria to safeguard people’s interests, employment, worker safety, the environment, and the general public.
Examples of activity-specific licenses include the following –
- Certificate of fitness for certified machinery
- Building plan approval
- Expatriate post approval
- Air pollution control equipment approval for any installation, alteration, or relocation
What Type Of Business License Is Required To Qualify For An Employment Pass Application?
Before applying for an employment pass with the Malaysian Immigration Department, a foreign-owned company must first secure the applicable business license.
Companies undertaking business activities in wholesale, retail, trade (WRT), consulting, and services will need to apply to the Ministry of domestic trade and consumer affairs (KPDNHEP) for a WRT or BIP license.
Companies undertaking business activities in technology will have to apply with Malaysia Digital Economy Corporation (MDEC).
The average timeline to secure the above business license is 3 to 4 months.
What is a WRT (Wholesale, Retail, Trade) License?
In Malaysia, a WRT license is required to sell new and used items from a retailer to industrial, commercial, institutional, and professional users to a wholesaler, acting as a buying agent, and selling a product to companies.
Foreigners who want to do wholesale and retail business in Malaysia must follow the rules for foreign involvement in wholesale and retail commerce, which went into effect on November 1, 1995.
According to this rule, all foreigners operating in wholesale and retail commerce must get authorization from the wholesale and retail trade approval board. This permission covers the establishment of new branches or the relocation of existing businesses with foreign involvement.
What Are The Objectives Of A WRT License?
- To control foreign engagement in the distribution commerce industry.
- To ensure equitable growth in the sector and to boost local company development.
- To promote modernization and efficiency in the distribution trade industry.
- A pre-condition for issuing a company license.
Types Of WRT Licenses
Foreigners who want to establish one of the four categories of enterprises listed below, but control more than 50% of the firm, must apply for the WRT license.
The types of WRT licenses are as follows –
- Retail, trading (import/export), distributive trades
- Restaurant wholesale-retail trade WRT license
- Franchise business
- Services and consultancy
What Types Of Businesses Are Not Allowed In The Distributive And Retail Sectors?
- Supermarket or minimarket
- Provision shop
- Furniture and fittings
- Hair salon
- Prepaid card business
- Textiles and clothing
- Computer Accessories
- Laundry shop
- Cleaning and maintenance
- Cyber café
REQUIRED DOCUMENTS NEEDED FOR DIFFERENT TYPES OF BUSINESS LICENSES
Mandatory Requirements For Applying For A WRT License
- RM 500,000 to RM1 million minimum paid-up capital if the company is foreign-owned.
- Sdn Bhd has been fully set up.
- Has a valid tenancy agreement and a phone line.
- Submission of business plan for new companies.
Required Documents For An Sdn Bhd To Apply For A Business License
- Incorporation certificate
- Particulars of directors, managers, and secretaries
- Pictures of business premise (front and interior)
- Sample of signboard that indicates design and color
- Pictures showing the location of the signboard
Required Documents For A Limited Liability Partnership To Apply For A Business License
- Incorporation certificate
- E-SSM company profile
- Pictures of business premise (front and interior)
- Sample of signboard that indicates design and color
- Pictures showing the location of the signboard
Required Documents For An Enterprise To Apply For A Business License
- Incorporation certificate
- E-SSM company profile
- Pictures of business premise (front and interior)
- Sample of signboard that indicates design and color
- Pictures showing the location of the signboard
Reach out to us at enquiry@relinconsultants.com if you require additional information.
FAQs
What are the payment methods for the business licenses?
Payment for licenses will need to be made at the City Council or City Hall via the following methods.
- Cash
- Money order
- Remittances
- Bank draft
- Credit card
How long will it take for the approval of my business license?
The license approval procedure might take anywhere from one month to six months, depending on the kind of industrial license. The government will perform a business inspection before approving the application.
How can I get an exemption for the WRT license?
If a local Malaysian citizen owns 50% or more of an Sdn Bhd company, the company may be exempted from applying for a WRT license.
How can I get a business license in Malaysia?
A business license can be obtained by applying to the Pihak Berkuasa Melesen (PBM) from the relevant state and location. A company can apply directly by submitting the required documents or engaging a professional firm to assist with the application process.
Where to apply for a business license in Malaysia?
Applications for business premises and signboard licenses are handled by the Malaysian state authorities. A company can reach out to the relevant authority based on the business location.
How much is a business license in Malaysia?
The fees for a business license in Malaysia vary depending on the state authorities. But generally, you can expect the business license cost to be in the range of RM 1,000 to RM 1,500.
Why do we need a business license in Malaysia?
It is a mandatory requirement for all businesses in Malaysia to secure a business license in Malaysia. The primary objective of the license is to hold the company accountable for its activities and behavior and protect the general public’s health and safety. If you conduct your business without the necessary licenses, the government may shut it down and/or levy severe penalties.
What business license do I need to sell online in Malaysia?
The business license for an online trading business will depend on the product and items sold.
What is a Malaysia business license and permit?
A business license and permit in Malaysia allow the owner to operate a business in the designated location. It is a permit granted by the Malaysian government indicating that the authorities have given the business permission to operate.
Find out if you need a license as part of your start-up procedure, as the application process and requirements vary depending on the state you are operating. A company operating without one can result in fines or closure from the government.
The kind of license you require and where to get it depends on where your business is located.
Does the online business require a business license in Malaysia?
Yes, all online businesses require a business license in Malaysia. The exact business license will vary depending on the company’s business activities.
Is it legal to do business at home in Malaysia?
Yes, it is legal to do business at home in Malaysia, but similar to all businesses, the owner must obtain a valid business license and permit applications to the business.
Do small businesses need to register in business license Malaysia?
Yes, all businesses, irrespective of the size of the business must register for a business license in Malaysia.
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