The permits and Licensing in Malaysia is an official permit or authorized right to do, use or own certain property, industry, company, or documentation work. It can be assumed that a license is legally issued by an authority or authorities, to allow an activity that would otherwise be forbidden.
A license can also be accorded from one party to another party (i.e. a government office and business firm) as an element of the agreement between the two individual parties.
Hence an industry license or a company license is one type of license that is mainly regulated by a government authority to regulate the type or nature of business intended to do.
In Malaysia, it is said to be a must that both foreign and local investors need to have legal and authorized licenses to gain permission to do business within the country.
The country has various government agencies or act of bodies all over to support the business firms with different types or nature of business they intend to introduce to Malaysia.
In Malaysia, foreigners or local businessmen can only apply for licensing Malaysia when they have set up their company or business firm with all legal approvals.
It is said to be a must to study and understand these various Malaysian Industry Licenses by a foreign investor to apply and qualify for the nature and type of business activities being run by his or her business firm.
Sdn Bhd and Labuan Business Licensing
In Malaysia, the 100% foreign-owned company is often not allowed or approved to do all types of trades if they don’t have local Malaysians’ participation as shareholders or directors within the business company.
Well, it is stated that Malaysia and its government have strict rules and laws for foreign investors to achieve industry licenses for local Private Limited Company or Sdn Bhd Company if compared to Labuan Company. Hence for foreign investors, it is always best to open a Labuan Company to do business in Malaysia.
These Labuan Companies come up with various facilities for foreign investment in Malaysia i.e. 100% ownership of the company, right to sue or be sued, separate legal entity, lower paid-up capital, and many more.
The Malaysian Sdn Bhd Companies are mainly targeting the local market of the country. Hence Malaysia and its government mainly emphasize protecting and developing the interest of local business policies and give approval to only manufacturing companies or business firms with higher paid-up capital of RM 1 Million and to RM 2.5 Million with 100% foreign participation.
Type of Business Licensing in Malaysia
To obtain a valid license is mandatory in Malaysia to legally conduct your business. These licenses can be obtained from the Pihak Berkuasa Melesen (PBM). You must first apply from your relevant location and for your business activity. Before a business can legally start, these businesses must obtain some form of licensing.
This license can be a general license, industry or sector-specific license, or even an activity-specific license. Business licenses are required by the statutory body or the governing body in Malaysia.
The requirements for the number or type of license will depend on the business activity and location. Detailed information on licensing and business registration can be found on the MalaysiaBiz Government portal.
Licenses in Malaysia
In general, business licenses in Malaysia can be categorized into 3 groups. The names of each group are stated below:
- General License
- Sector Industry Specific License
- Activity Specific License
General licenses are the required licenses that will be necessary for starting the business. These licenses are mandatory for starting a business in Malaysia. The necessary general licenses are provided below:
- Company Registration
- Company and Employees Income Tax Registration
- Employees Provident Fund (EPF)
- Social Security Organization (PERKESO)
- Human Resource Development Fund (HRDF)
- Business Premise Licenses and Signboard Licenses
The business premise license and the signboard license are required to apply from the respective State Authorities and the requirements of such licenses may vary from state to state.
Sector Industry Specific License
These licenses are required for certain sectors or industries in Malaysia. These requirements are provided by the government. The licenses in this category are provided below:
- Licenses related to the manufacturing sector
- Licenses and permission related to the distributive trade
- Licenses related to the telecommunication sector
- License related to the broadcasting sector
- License related to the oil exploration sector
- License related to the construction sector
- Licenses related to the banking sector
- Licenses under department BLESS, Ministry of Entrepreneur Development (MED)
- License under the department of occupational safety and Health Malaysia (DOSH)
- License under the National Water Services Commission (SPAN)
These licenses will be determined by the business activity you have in Malaysia. The government has set the required licenses required for each business sector.
Activity Specific License
Certain activities in Malaysia have certain licenses which you must obtain before conducting your business. These licenses are related to the activities of your business. There are a lot of licenses related to the business.
There are specific guidelines designed to protect the interest of the citizen of Malaysia, the safety of the workers, the environment, and the public. Such examples of the licenses are provided below:
- Certificate of Fitness and Certified Machineries
- Approval of Expatriate Posts
- Approval to install air pollution control equipment
- Building plan approval
- Sales Tax License
The examples provided are just the initial guidelines for making the first step. You can search the MalaysiaBiz government portal for new business licenses.
Types of business licenses required for foreign Investors. The foreign and local investors are said to apply for another type of Malaysia Local Business council Licenses along with Industry Licenses to get business approval.
There are several types of trade licenses and permits that are required for business entities to do business on both large and small scale within Malaysia, they are given below:
|Business Type||Type of business license in Malaysia|
|Education of all types||Universities, Colleges, Schools, Tuition centers, Kindergarten, Language centers.|
|Tourism||Inbound, Outbound, and Ticketing|
|Transportation||Car rental licensing in Malaysia|
|Publishing of books, magazines, etc.||Publication licensing in Malaysia|
|Broadcasting to the Public||For TV, Radio, Singing, and Music|
|Distributive or supply of goods to retailers, Import, Export, and Trading||Wholesale Retail Trade License (WRT) for Trading, Import, Export, Hotels & Restaurants.|
|Factory/Manufacturing||Manufacturing Licensing in Malaysia|
|Hospitality||Luxury Hotel, Budget Hotel|
|Construction and Builder||Construction Industrial Development Board and Engineering|
|ICT and E-Commerce||Multi-Super Corridor (MSC)|
|Direct Selling and Multi-Level Marketing||Direct Selling|
|Manufacturing||Manufacturing Licensing in Malaysia|
|Banking||Central Bank of Banking and Financing|
|Tax Advisory and Consultancy||Tax Agent|
|Audit Account Services||Auditor|
|Hire Purchase/ Leasing Business||Leasing|
|Legal Services/ Litigation/ Advocate||Lawyer|
|HR Recruitment and Placement||Recruitment|
The approval of various licenses mentioned above by the government or authorized bodies depends upon a few factors: – Degree of Local Malaysian participation in a company as directors, shareholders or authority partners, Nature of Business, or the Paid-Up capital amount.
Importance Of Wholesale Retail Trade (WRT)
The wholesale Retail Trade License is also known as the WRT license is said to be the most commonly used industry license used by foreigners.
This type of license is mainly applicable for a non-resident business firm that has the right to have 100% foreign ownership to get approval to participate in retail, franchise, import, export, trading, restaurant, and consultancy business in Malaysia. The Ministry of Trade and Consumerism of Malaysia is said to be the WRT license approving authority.
The purpose or need of these Wholesale Retail Trade or WRT licensing in Malaysia issued by the government agencies for the foreign investors are given below:
- Monitor and regulation of foreign involvement in the trade sector of Malaysia.
- Ensure prosperous development in the business sectors and also keep local business growing at a fair scale.
- Encourage modern business policies and increase efficiency in the distribution trade sectors.
- Local authority agencies might issue legal acts and charges if there is no WRT license.
Governing Bodies For Licensing
There are various councils and government bodies i.e. Malaysia Company Commission, Local Town Council (eg: DBKL, MPAJ, etc), Fire Brigade Departments, etc who are responsible for issuing licenses to these business firms, industries, food factories, retail stores, restaurants, etc all over Malaysia.
Usually, the time span needed for the approval of these licenses is in between 1 month to 6 months. In maximum cases, the relevant ministry board people will go to the companies or business firms to inspect their office, products, services, nature of the business to finally issue the license.
Well is still suggested to the foreign investors to look into deep the fact what type of licenses is mainly required for the type of business they intend to carry on within Malaysia. Having keen knowledge about the type of License and the Nature of business will eventually help them to be hassle-free, making costly mistakes or taking illegal steps.
The paid capital range of business firms mainly depends on the type of business licenses the business firm acquires. The paid-up capital can start from RM 50,000 to RM 1 Million. Business firms or companies under Labuan Company, which does not require an industry licensing in Malaysia can have a paid capital share of only 1 USD to more.
Industry license list
|Banking||Company Management Business|
|Insurance||Private Manage Trust|
|GIFT Commodity Trading||Shipping|
|Fund Management||Labuan Auditor|
|Money Broking||Labuan Liquidator|
|Credit Token||Labuan Trust Company|
Some business firm does not require an industry license. The requirement of both industry and activity licenses mainly depends upon the nature of the business a business firm runs. Here are some examples of Labuan activity licenses. Well, now you can know about manufacturing companies in Malaysia.
A business license is an official permit or authorization to own or use certain property, industry, company, or documentation work.
Depending on the business activity, there are governing bodies in Malaysia that provide the licenses to conduct your business legally
It is mandatory for every foreigner and local citizen to obtain permits and licenses for starting a business in Malaysia.
In Malaysia, it is mandatory to have a registered company apply for a business license. There are certain governing bodies for certain business activities and nature. After successful company registration, apply for the necessary business licenses for your business nature.
Compared to Sdn Bhd Company in Malaysia, Labuan Companies allow 100% foreign ownership and the ability to sue or be sued by others, separate legal entities, etc.
The licenses can be of several types mainly general licenses, industry or sector-specific licenses,s or even activity-specific licenses.
There is no specific number but generally, the number of licenses required will always depend on the nature of your business or your business activity. It also depends on the physical location of your business.
A general license is a mandatory license that is required for starting a business in Malaysia. These general licenses are company registration, Income tax registration, etc.
Sector / industry-specific license is the license required for a certain sector or industry in Malaysia. For example, if you want to start a manufacturing business, you must get a license regarding the manufacturing of your product. You might require multiple licenses for a specific product.
There are licenses available for certain activities in Malaysia. For example, if you have a gym then you will require the license for the activities that you do or provide in that gym. The building plan approval is also required.
WRT stands for Wholesale Retail Trade in Malaysia. This is the most common form of license used by foreigners for industry usage. This type of license is mainly applicable for a non-resident business firm that has the right to have 100% foreign ownership to get approval to participate in retail, franchise, import, export, trading, restaurant, and consultancy business in Malaysia.
You can get your WRT license from the Ministry of Trade and Consumerism of Malaysia. They are the governing body for WRT licensing in Malaysia.
. Monitor and regulation of foreign involvement in the trade sector of Malaysia.
· Ensure prosperous development in the business sectors and keep the local businesses growing at a fair scale.
· Encourage modern business policies and increase efficiency in the distribution trade sectors.
· Local authority agencies might issue legal acts and charges if there is no WRT license.