The Foreigner’s Guide To Malaysian Manufacturing Licenses And Permits

From January to June 2024, the Malaysian Investment Development Authority (MIDA) reported RM 47.6 billion (USD 10.1 billion) of foreign investment in Malaysia’s manufacturing sector.

This increase from RM 33.9 billion (USD 7.25 billion) in 2023 proves Malaysia remains an attractive manufacturing hub for foreign businesses.

For overseas parties looking to set up manufacturing facilities in Malaysia, our guide provides a brief but complete overview of the licenses needed.

There are 12 in total, each broken down in terms of:

• purpose and function
• minimum requirements
• issuing government body, and
• approval time and cost

Note: Though figures below are accurate at the time of publishing, we hope you understand government fees and processes change faster than we can update them! Treat this guide as a useful estimate or contact us for up to date numbers. 

Otherwise, let’s begin. 

1. Potential Investor Visa

Timeframe: 4  – 6 weeks

Fee: RM2,700

Regulatory body: Malaysian Immigration

This is a two-year, non-renewable visa designed for foreigners to enter Malaysia and conduct market research before deciding whether to invest in the country.

It is applied for directly by the foreign company and requires an audited financial report, ideally showing profits from the past two years. 

2. Company incorporation

Timeframe: 2- 4 weeks

Fee: RM1,010 (not including third party service charges)

Regulatory body: Companies Commission of Malaysia (SSM)

Before applications can be submitted to the relevant government agencies, you must first register a company under The Companies Commission of Malaysia.

In Malaysia, a limited liability company is known as a Sendirian Berhad and key features are:

• generally 100% foreign ownership is permitted
• it offers the benefits of a Private Limited Company, namely limited liability protection
• it requires at least one shareholder and local director
• it can have a maximum of 50 shareholders

You’ll also need to appoint a certified Company Secretary who advises company directors on matters of statutory compliance.

3. Factory S&P / Tenancy Agreement

While this isn’t a license, all regulatory bodies that issue manufacturing permits require a tenancy or sale and purchase agreement of a suitable factory space.

If you already have a suitable location, proceed to the next license.

4. MIDA Manufacturing License

Timeframe: 6 – 8 weeks

Fee: RM1,500 (not including third party service charges)

Regulatory body: Malaysian Investment Development Authority (MIDA)

Manufacturing companies in Malaysia with shareholders’ funds of RM2.5 million or more or 75 or more full-time employees must apply for a manufacturing license with MIDA.

For MIDA to issue a manufacturing license, the business must meet the following requirements: 

• Projects must have Capital Investment Per Employee (CIPE) of at least RM140,000.00
• Total full-time workforce of the company must comprise at least 80% Malaysians
• Total number of managerial, technical and supervisory levels (MTS) is at least 25% of total employment or having a value added (VA) of at least 40%

Companies that do not meet the above requirements must instead apply for an Exemption of Manufacturing License.

Click here for MIDA’s official guide to their manufacturing license requirements.

Applications are made online via MIDA’s InvestMalaysia portal and an interim letter of approval will be issued within six to eight weeks of submitting an application.

5. MIDA Tax Incentive (optional)

Timeframe: 8 – 12 weeks

Fee: RM2,500 (not including third party service charges)

Regulatory body: Malaysian Investment Development Authority (MIDA)

The rabbit hole of MIDA incentives runs deep, and you can see the full list here.

In general, the two primary incentives are:

• Pioneer Status
• Investment Tax Allowance (ITA)

A company with Pioneer Status receives a five-year partial tax exemption, paying tax on only 30% of its income, with losses and capital allowances carried forward post-pioneer period.

Alternatively, Investment Tax Allowance (ITA) offers a 60% allowance on qualifying capital expenditures over five years, which can offset up to 70% of statutory income, with unused allowances carried forward.

Both are also applied for via MIDA’s InvestMalaysia.

6. Customs Licensed Manufacturing Warehouse

Timeframe: 8 – 12 weeks

Fee: RM2,400 (not including third party service charges)

Regulatory body: Malaysian Royal Customs Department

A Customs Licensed Manufacturing Warehouse (LMW) license provides customs duty exemptions on raw materials, parts, machinery, and tools used in making products for export. 

It is issued by the Malaysian Customs Department and comes with the following requirements: 

• Must have a MIDA Manufacturing License (the previous item on this list)
• Over 80% of total value of finished goods over a 12-month period are for export 

Applications must be submitted to the State Director of Customs / Zone Operation Director where the premise is located.along with a list of required documents. 

7. Fire Department No Objection Letter

Timeframe: 4 – 6 weeks

Fee: None

Regulatory body: Fire and Rescue Department of Malaysia

This is a no-objection letter from the local Fire and Rescue Department certifying your manufacturing premises as compliant with safety standards following a site visit and any renovations they request.

Take a look at their requirements by downloading an official list of forms here.

8. Department of Environment No Objection Letter

Timeframe: 4 – 6 weeks

Fee: Varies by approvals needed

Regulatory body: Malaysian Department of Environment

As with MIDA incentives, your manufacturing site will require different approvals from the Department of Environment depending on your specific area of manufacturing.

For a full list of approvals, see DOE’s full table.

However, all manufacturers must start with a Preliminary Site Suitability Assessment, which involves evaluating the compatibility of the industry with surrounding land use. 

Each local district has its own application form (see sample).

9. Department of Occupational Safety & Health Approval

Timeframe: 4 – 6 weeks

Fee: Varies by approvals needed

Regulatory body: Malaysian Department of Occupational Safety & Health (DOSH)

Officers from the Malaysian Department of Occupational Safety and Health will conduct a site visit to ensure the following parts of your manufacturing facility comply with the requirements outlined in the Occupational Safety and Health Act 1994:

• Boiler & Pressure Vessel Hydrostatic Test
• Design of Steam Boilers
• Design of Unfired Pressure Vessels (UPV)
• Hoisting Machine Design
• Lifts, Escalators & Dumbwaiters
• Personal Protective Equipment (PPE)
• Pipeline Design

Each requires a separate application, and the process is documented here by DOSH.

10. Local Authority Composite License

Timeframe: 4 – 6 weeks

Fee: Varies by Local Authority

Regulatory body: Local Authority (Pihak Berkuasa Tempatan)

These are premise and signboard licenses from the Local Authority where your manufacturing facility will be located.

Being in manufacturing, you’ll likely deal with authorities from Malaysia’s known manufacturing hubs like Seberang Perai and Pulau Pinang, and each has their own workflows and fees.

11. Certificate of Origin

Timeframe: 6 – 8 weeks

Fee: RM10 per document copy authentication, and RM20 per pad of 100 sheets of CO forms

Regulatory body: Malaysian International Chamber Of Commerce & Industry (MICCI)

A Certificate of Origin (CO) is a document certifying that goods exported are either made entirely in Malaysia or meet specific content and production criteria. It is required for international shipments, customs clearance, or as specified in trade agreements..

To qualify, products must either:

• Have 100% local content, or
• Undergo a production process that changes the tariff code, or
• Contain at least 25% local content

They are applied for at MICCI headquarters or regional offices in Malaysia.

12. Employment Pass + Immigration Endorsement

Timeframe:6 – 8 weeks

Fee: RM2,160 + RM585

Regulatory body: Expatriate Services Division (ESD)

If you plan to send a foreign representative to oversee your Malaysian operations as a company director or senior executive, they need an employment pass.  .

In Malaysia, there are three employment pass categories with minimum salary requirements.

	Employment Pass (Category 1)	Employment Pass (Category 2)	Employment Pass (Category 3)
Contract Duration	Up to 5 years	Up to 2 years	Up to 1 year
Typical Use Cases	Highly skilled roles in management, technical, or professional sectors	Skilled roles in technical or supervisory positions	Semi-skilled roles requiring practical or technical skills
Minimum Monthly Pay	RM10,000	RM5,000	RM3,000
Dependent Permissions	Eligible for dependants, including spouse, children, and can hire a foreign maid	Same as Category 1	No dependants or foreign maid permitted

In addition to salary, to qualify as an expatriate or skilled worker in Malaysia requires meeting these requirements:

• Degree and above, with at least 3 years’ experience in the relevant field, or
• Diploma, with at least 5 years’ experience in the relevant field, or
• Technical Certificate or equivalent, with at least 7 years’ experience in the relevant field

Employment pass applications are submitted by the hiring company via the Immigration’s Expatriate Services Division and must be accompanied by an Immigration Endorsement.

Overview of manufacturing licenses

Here is a table summarising the information above.

No.	License	Issuing Body	Government  Fee
1	Investor Visa	Malaysian Immigration	RM2,700
2	SSM New Company Registration	Companies Commission of Malaysia (SSM)	RM1,010
3	Factory S&P or Tenancy Agreement	n/a	n/a
4	MIDA Manufacturing License	Malaysian Investment Development Authority (MIDA)	RM1,500
5	MIDA Tax Incentive	Malaysian Investment Development Authority (MIDA)	RM2,500
6	Customs LMW License	Royal Malaysian Customs	RM2,400
7	Fire Department BOMBA NOL	Fire and Rescue Department (BOMBA)	n/a
8	Department of Environment (DOE) NOL	Department of Environment (DOE)	n/a
9	Department of Safety & Health (DOSH) Approval	Department of Occupational Safety and Health (DOSH)	n/a
10	Business Premise License	Local City Council
11	Certificate of Origin	Malaysian International Chamber Of Commerce & Industry (MICCI)	RM10 per document / RM20 per 100 COs
12	Employment Pass + Immigration Endorsement	Expatriate Services Division	RM2,160 + RM585

While we obviously recommend our own incorporation and license consultation services, readers should do their due diligence and find the best partner for their needs – all the best with your future endeavors!

Let MISHU help secure your Malaysian manufacturing licenses

Our business licensing team will sit down with you, understand your needs, and get out there and secure the necessary licenses for you to begin manufacturing in Malaysia – speak to us today.