8 Types of Business Licenses in Malaysia You Need to Know

When starting a business in Malaysia, it’s crucial to be aware of the various types of business licenses required to operate legally within the country. These licenses are essential to ensure compliance with government regulations and to avoid potential penalties or business closure. In this article, we’ll explore 8 types of business licenses in Malaysia, categorized as follows:

  1. General Licenses:
    • Company Registration: This initial step involves registering your company with the Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia or SSM) to establish your business as a legal entity. You’ll receive a certificate of incorporation.
    • Company and Employee’s Income Tax Registration: Register your company and employees for income tax purposes with the Inland Revenue Board of Malaysia (Lembaga Hasil Dalam Negeri Malaysia or IRBM) to ensure timely tax payments and compliance.
    • Employees Provident Fund (EPF): EPF, or Kumpulan Wang Simpanan Pekerja, is a mandatory social security scheme that requires both you and your employees to contribute a percentage of their monthly salary to a retirement fund.
    • Social Security Organisation (PERKESO): Also known as Pertubuhan Keselamatan Sosial, PERKESO is another mandatory social security scheme that provides protection and benefits to employees in case of work-related injuries, illnesses, disabilities, or death.
    • Human Resources Development Fund (HRDF): HRDF, or Pembangunan Sumber Manusia Berhad, aims to enhance employee skills and competencies through training and development programs.
    • Business Premise License and Signboard License: Obtained from local authorities or Pihak Berkuasa Tempatan, these licenses permit you to operate your business at a specific location and display your signboard.
  2. Sector/Industry-Specific Licenses:
    • Manufacturing License: Issued by the Malaysian Investment Development Authority (MIDA) or Lembaga Pembangunan Pelaburan Malaysia, this license allows you to engage in manufacturing activities, particularly if your paid-up capital exceeds RM 2.5 million or you employ more than 75 workers.
    • Distributive Trade License: Provided by the Ministry of Domestic Trade and Consumer Affairs (MDTCA) or Kementerian Perdagangan Dalam Negeri dan Hal Ehwal Pengguna, this license is required for various trade activities, including wholesale, retail, franchise, direct selling, online selling, or international trading, especially when foreign equity exceeds 51%.
    • Halal Certification: The Department of Islamic Development Malaysia (JAKIM) or Jabatan Kemajuan Islam Malaysia grants this certification, confirming that your products or services comply with Islamic principles and halal standards.
  3. Activity-Specific Licenses:
    • Import/Export License: Acquire this license from the Royal Malaysian Customs Department (RMCD) or Jabatan Kastam Diraja Malaysia to engage in the import or export of goods, especially if they are subject to customs duties, taxes, or regulations.
    • Environmental Impact Assessment (EIA): Conducted by the Department of Environment (DOE) or Jabatan Alam Sekitar, the EIA assesses potential environmental impacts associated with your project or activity and recommends mitigation measures.
    • Fire Safety Certificate: Issued by the Fire and Rescue Department of Malaysia (FRDM) or Jabatan Bomba dan Penyelamat Malaysia, this certificate confirms compliance with fire safety requirements and regulations for your premises.
    • Occupational Safety and Health Certificate: Provided by the Department of Occupational Safety and Health (DOSH) or Jabatan Keselamatan dan Kesihatan Pekerjaan, this certificate ensures that your workplace adheres to occupational safety and health standards and guidelines.

These categories encompass the common types of business licenses in Malaysia. However, depending on your industry, specific activities, and location, you may need to apply for additional licenses to operate legally. To find comprehensive information about business licensing requirements in Malaysia, consider visiting the following resources:

Being well-informed about these licenses and their requirements is crucial as you embark on your business journey in Malaysia. If you have any questions or require further clarification, feel free to leave a comment or seek guidance from relevant government agencies. Best of luck with your business endeavors!

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