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 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 or 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 the foreigners or local businessmen can only apply for licensing in Malaysia when they have setup their company or business firm with all legal approvals. It is said to be a must to study and understand these various Malaysia 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.
Type of business Licensing in Malaysia
In Malaysia, the 100% foreign owned company is often not allowed or approved to do all type 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 has 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 the best to chose to open a Labuan Company to do business in Malaysia. These Labuan Companies comes up with various facilities for the 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 emphasis to protect and develop the interest of local business policies and give approval to only manufacturing companies or business firm with higher paid up capital of RM 1 Million and to RM 2.5 Million with 100% foreign participation.
Types of business license required for foreign Investors. The foreign and local investors are said to apply for other 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 in both large and small scale within Malaysia, they are given below:
|Business Type||Type of business license in Malaysia|
|Education of all types||Universities, Collages, Schools, Tuition Centre, Kindergarten, Language centers.|
|Tourism||Inbound, Outbound and Ticketing|
|Transportation||Car rental licensing in Malaysia|
|Publishing of books, magazine 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 & Restaurant.|
|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 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.
Wholesale Retail Trade License also known as WRT license is said to be the most commonly used industry license used by the foreigners. This type of licenses are mainly applicable for non-resident business firm who 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. 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:
1) Monitor and regulation of foreign involvement in the trade sector of Malaysia.
2) Ensure prosperous development in the business sectors and also keep local business growing at a fair scale.
3) Encourage modern business policies and increase efficiency in the distribution trade sectors.
4) Local authority agencies might issue legal acts and charges if there is no WRT license.
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 are in between 1 month to 6 months. In maximum cases the relevant ministry board people will go the companies or business firms to inspect their office, products, services, nature of business to finally issue the license. Well is still suggested to the foreign investors to look into deep on 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 mistake or take illegal steps.
The paid capital range of business firms mainly depends on the type of the business licenses the business firm acquire. The paid-up capital can start from RM 50,000 to RM 1 Million. Business firm or companies under Labuan Company, who does not require an industry licensing in Malaysia can have a paid capital share of only 1 USD to more.
The industry license list is given below:
|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 industry license. The requirement of both industry and activity licenses mainly depends upon the nature of business a business firm runs. Here are some example Labuan activity licenses.
1) Mutual Fund Activities
2) Marketing Office
3) Co-Located Office
4) Immigration Work Permits
5) Insurance of Sukuk/Bond