In Malaysia, running a business requires compliance with laws and regulations set by local authorities and the government. One of the most important requirements for all entrepreneurs is obtaining a valid Business License in Malaysia. This license serves as proof that the business being operated complies with all relevant regulations and is authorized by the authorities to operate in the country. This article will discuss the types of business licenses required in Malaysia, as well as the application and renewal processes for these business licenses.
Types of Business Licenses in Malaysia
In Malaysia, there are several types of business licenses that need to be obtained by entrepreneurs, depending on the type of business being run and the business location. Generally, business licenses are categorized into several types, including:
1. Business License from Local Authorities (PBT)
Every business that operates in a business premises (such as a shop, office, or factory) requires a license from the Local Authorities (PBT). This license is issued by the municipal or district councils that govern the area where the business operates. For example, businesses operating in Kuala Lumpur must obtain a business license from the Kuala Lumpur City Hall (DBKL).
2. Small and Medium Enterprise (SME) License
Entrepreneurs running businesses in the small and medium enterprise (SME) category in Malaysia need to obtain a license issued by the SME Corporation Malaysia (SME Corp). SME Corp is responsible for supporting the development of small and medium-sized businesses in the country, including issuing licenses related to these businesses’ operations.
3. Business License from the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP)
For businesses involved in the trade of goods and services, such as retail and supply services, a license from the Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) is required. This license authorizes the business owner to carry out their activities in providing goods and services to consumers.
4. Business License for Specific Activities
Some businesses involving more specialized activities such as food and beverage (F&B), health, construction, or pharmacy require specific licenses. For example, entrepreneurs running restaurant businesses need to obtain a food license from the Ministry of Health Malaysia (KKM) and the Local Authorities, while pharmaceutical businesses require a license from the Pharmacy Board of Malaysia.
5. Sales and Services Tax (SST) License
Businesses that meet certain criteria regarding annual revenue need to register with the Royal Malaysian Customs Department to obtain a Sales and Services Tax (SST) license. This SST license is important for traders who are required to impose tax on the products or services they offer.
6. Company Registration License (SSM)
Every company that wants to operate in Malaysia needs to register with the Companies Commission of Malaysia (SSM). This registration grants the company legal status and facilitates the business in carrying out official transactions, including financial dealings, legal matters, and business contracts. There are two types of registrations that can be made: Private Limited Company (Sdn Bhd) and Partnership.
Business License Application Process in Malaysia
Each type of business license has a different application process, but in general, the following are the steps involved in the business license application process in Malaysia:
1. Business Registration with SSM
Before applying for other business licenses, the business owner must first register their business with the Companies Commission of Malaysia (SSM). This process includes selecting the company name, business category, and verifying company information. Registration can be done online via the SSM portal or manually.
2. Identify the Required License
After registering with SSM, the business owner needs to identify the type of license required for their business operations. This depends on the business type and the location of the business. For example, if the business is operating in an urban area, a license from the Local Authorities must be applied for.
3. Prepare Supporting Documents
To facilitate the application, the business owner must provide several supporting documents. These documents include a copy of the business registration from SSM, a copy of the business owner’s or company’s director’s identification card, a floor plan of the business premises, proof of tax payments, and other relevant documents based on the type of license being applied for.
4. Fill in the Application Form
The business license application can be done by filling out the forms provided by the relevant authorities or agencies. These forms are typically available at PBT offices, online portals, or through specific business registration platforms.
5. Pay the Application Fee
Every business license application usually involves a processing fee. The amount of this fee varies according to the type of license and the area of operation. The application fee must be paid before the application can be processed.
6. Processing and Approval of the Application
Once the application is received and the documents are reviewed, the relevant authority will process the business license application. If all the requirements and qualifications are met, the business license will be issued within a certain period.
7. Issuance of Business License
Once the approval process is complete, the applicant will be granted a valid business license. This license must be displayed at the business premises as proof that the business is legally operating.
Business License Renewal Process
Business licenses in Malaysia usually have a set validity period, and business owners must renew them after the expiration date. Below are the steps involved in renewing a business license:
1. Check the Expiry Date of the License
Each business license has an expiry date that the business owner must pay attention to. The renewal must be done before the expiration date to avoid any issues or fines.
2. Prepare Renewal Documents
The business owner needs to prepare the required documents for the renewal application, such as an updated SSM copy, proof of tax payments, and proof of payment for the expired license.
3. Apply for Renewal Online or Manually
License renewal can be done online through the PBT portal or the relevant authority’s portal, or manually by visiting the respective office.
4. Pay the Renewal Fee
As with the initial application, the renewal of the business license also involves a fee. This fee must be paid to ensure the renewal process continues smoothly.
5. Processing of Renewal
Once the renewal application is received, the relevant authority will process it and issue a new valid license for the specified period.
6. Issuance of the New License
The renewed business license will be given to the business owner. This license must be displayed at the business premises to ensure the business remains legally operational.
Conclusion
The Business License in Malaysia is an essential aspect of operating a legal business in the country. Every entrepreneur needs to understand the types of licenses required for their business and the procedures for applying and renewing them. This process helps ensure that the business complies with local regulations, provides protection for consumers, and contributes to the economic stability of the country. Business owners must be attentive to the validity period of their business licenses and ensure that the renewal process is completed on time to avoid any issues or restrictions on their business operations.
