Malaysia is one of the world's leading destinations to start a business. This is due to the relative ease of registering a company in Malaysia. In fact, the process of registering a company in Malaysia is a simple and straightforward process.
Companies in Malaysia cannot legally operate without a commercial license that is valid in Malaysia. Although some may assume that the process of applying for a license is complex, it is certainly not the case.
Why Malaysian companies need a business license
Obtaining a commercial license in Malaysia is a requirement specified by the Companies Law. Every company in Malaysia must meet this requirement. All companies in Malaysia are regulated by the Malaysian Business Commission (SSM). Full foreign ownership of certain commercial entities, such as the private limited company (Sdn Bhd), is legally permitted. However, a completely foreign-owned company in Malaysia will require that some local Malaysian staff be employed.
Duration of the commercial license approval
The total time of the request can be between one month and six months. The duration depends on the type of industry license for which the business owner is applying. (This includes small businesses and retail stores). The ministry that issues the commercial license will inspect the commercial facilities before doing so.
Types of commercial licenses available in Malaysia
Malaysia has two categories of commercial licenses. All Business licenses in Malaysia are general licenses or industry-specific licenses. General licenses are for anyone who plans to register a business in Malaysia. Industry-specific licenses, on the other hand, are licenses that are exclusive to certain industries.
Companies, including Sendirian Berhad (Sdn Bhd) companies, limited liability companies (LLP) and limited companies, must have a commercial license. Similarly, establishments that sell alcohol will require a liquor license.
The commercial licenses in Malaysia that are required to obtain depend on the industry and the type of business activities involved. The following table lists the available licenses offered by the Malaysian government.
Industry | License |
Manufacturing/Factory | Manufacturing License |
Banking | Central Bank License for Banking, Financing, and Leasing |
Direct Selling | Direct Selling License |
Construction | Construction Industrial Development Board and Engineering License |
Distributive Imports and Exports | Wholesale Retail Trade (WRT) License for Trading, Import and Export, Consultancy, and Restaurant Business Management |
Education | Licenses for establishing Schools, Colleges, Universities, Tuition Centers, and Language Centers |
Manufacturing | Manufacturing License |
Hotel | For Budget Hotel License and Luxury Hotels |
Tourism | Inbound, Outbound, Ticketing License |
Media | Publication License for Magazines and Books / Broadcasting License for Music, Singing, TV, and Radio |
ICT | Multimedia Super Corridor (MSC) License |
Manufacturing | Manufacturing License |
Those who intend to operate in the retail industry or who are in charge of factories or restaurants as foreigners in Malaysia must apply for commercial licenses from the following government departments:
Foreigners must also apply for a business premises license, especially those who own real estate for the business. The requirements of this license will vary; they depend on local authorities and state authorities at the place where the application will be submitted. Requests may require additional processing time if a prior inspection is to be performed.
Other Trade Licenses
Foreigners in Malaysia may require other business licenses to operate their businesses. The Wholesale, Retail and Commercial Trade License (WRT) is among the most common commercial licenses required by foreigners.
The WRT license is also applicable to non-resident companies that are completely foreign-owned. A company that is involved in any of the following industries must apply for a WRT license:
A WRT license is renewable every two years. There are four options available under this category, which are as follows:
Foreigners must obtain a WRT license approval for the categories mentioned before they can apply for their DP10 work permit with the Immigration Department of Malaysia.
To apply for a WRT license, the minimum paid-up capital which is needed for the license application is RM1 million. This includes all categories for this license, and the company must be fully set up with a valid tenancy agreement. If the company is a newly incorporated company, the company owner is to submit the company’s business plan