4 Important Licenses You Need to Apply for to Legally Operate a Business in Malaysia

A Guide to Essential Business Licenses for Smooth and Legal Operations in Malaysia
March 25, 2025 by
4 Important Licenses You Need to Apply for to Legally Operate a Business in Malaysia
CONZLAB BERHAD 202301040401 (1534320P), Penny Lim

Understanding Business Licenses in Malaysia

Before a company can legally operate in Malaysia, it must obtain specific business licenses to ensure compliance with local regulations. The requirements for a business license application vary depending on the jurisdiction, as each local authority has its own set of rules.

Additionally, some business licenses may require Malaysian participation in terms of shareholding and directorship. Below are some of the key business licenses required in Malaysia:

Local Council License (Business Premise & Signboard License)

A Local Council License is a fundamental requirement for businesses operating from a physical location, such as an office or retail shop. This license is issued by the respective local authority based on the company’s business address. For instance, businesses in Johor Bahru must apply through Majlis Bandaraya Johor Bahru (MBJB).

There are typically two components under this license:

  1. Business Premise License – Permits the company to conduct business at a particular location.
  2. Signboard License – Grants approval for the company’s signage display in compliance with local advertising guidelines.

Wholesale & Retail Trade (WRT) License

The WRT License is mandatory for businesses with more than 50% foreign ownership involved in wholesale, retail, distributive trade, franchising, restaurants, trading, import, and export. This license is issued by the Ministry of Domestic Trade and Cost of Living (KPDN).

To qualify for the WRT License, companies must meet a minimum paid-up capital requirement of RM1 million. This regulation ensures that foreign-owned businesses contribute significantly to the local economy.

Manufacturing License (MIDA)

Under the Industrial Coordination Act 1975, companies engaged in manufacturing activities must obtain a Manufacturing License from the Malaysian Investment Development Authority (MIDA) if they meet the following criteria:

  1. Shareholders’ funds of RM2.5 million or more
  2. Employment of at least 75 full-time employees

This license ensures that manufacturing companies adhere to national industry policies and comply with environmental, safety, and quality standards.

Construction & Building License (CIDB)

Businesses operating in the construction sector, including civil engineering, building construction, and mechanical and electrical works, must obtain a Construction Industry Development Board (CIDB) License.

The CIDB License is essential for companies bidding on government and private construction projects, ensuring that they meet industry standards and worker safety regulations.

Wrapping Up

Having the right business licenses in Malaysia is key to running your business legally and smoothly. Since requirements vary by industry and company structure, it’s wise to check with the relevant authorities or seek professional advice to stay compliant.

Need help with the application process? Reach out to us for expert guidance!

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4 Important Licenses You Need to Apply for to Legally Operate a Business in Malaysia
CONZLAB BERHAD 202301040401 (1534320P), Penny Lim March 25, 2025
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