A Quick Guide To MIDA Manufacturing Licenses
Manufacturing activities in Malaysia fall under the Malaysian Investment Development Authority (MIDA), the federal agency facilitating domestic and overseas growth in the sector.
Regardless of the size of a manufacturer, it must register with MIDA, and in this guide we explain the basics of the two primary MIDA licenses.
Here’s how we’ve broken it down:
- threshold for a MIDA Manufacturing License
- benefits of qualifying
- what if you fall below the threshold
- fees, validity periods, and renewals
- how to submit an application, and
- a pitch to let us handle it for you!
As this is meant as a quick overview, we won’t be diving deep, but we’ll link to official MIDA sources for those who would like full details.
Let’s begin.
Manufacturing License threshold
To qualify for a MIDA Manufacturing License, the manufacturer must fulfil four criteria.
Two mandatory requirements:
- a Capital Investment Per Employee (CIPE) of at least RM140,000.00
- a workforce of minimum 80% Malaysian full-time employees
Plus one of the following for these two requirements:
- financial or employment threshold:
- either a minimum shareholders’ funds of RM2.5 million, or
- employ at least 75 full-time employees
- skill level or value-added contribution:
- either at least 25% of the workforce consists of managerial, technical, or supervisory staff, or
- a minimum value-added (VA) of 40%
For full details on how key terms like ‘full time employee’ or ‘shareholders’ funds’ are defined, scroll to the end of MIDA’s official application guidelines.
Benefits of meeting the threshold
Besides being a legal requirement, a MIDA Manufacturing License comes with numerous incentives.
But we’ll just share the two primary ones:
- Pioneer Status: 70% – 100% income tax exemption for five – 10 years.
- Investment Tax Allowance (ITA): 60% – 100% allowance on certain capital expenses.
Both are granted for engaging in sectors deemed beneficial to Malaysia’s economy which are deemed as ‘promoted activities’ and manufacturers can apply for either one, but not both.
This is just the tip of the MIDA incentive iceberg, and for a deep dive please see MIDA’s official guide to incentives, which includes many industry-specific schemes.
What if you fall below the threshold?
Manufacturers that don’t meet the four criteria in the previous section must apply for a MIDA Exemption from Manufacturing License.
They are still eligible for some MIDA incentives, including Pioneer Status and ITA.
Fees, wait times, validity periods, and renewals
Here are key application fees you should know:
| Application | Fee (RM) |
| Manufacturing License | 1,500 |
| Additional Incentives (ex. ITA) | 2,500 |
| Exemption of Manufacturing License | 1,000 |
For a full breakdown of all fees, here is MIDA’s official price list.
Once approved, both licenses typically carry a five year validity period before they must be renewed.
Renewals are done through the same channels as the application, so let’s get to that and send you on your way!
Submitting your application
MIDA only allows online applications and renewals, done via their InvestMalaysia portal.
As it’s your first time using the platform, you’ll need to register a new account.
Once you’re done, just follow these official user guides which take you through the application process step-by-step:
- Aapplication for Manufacturing Licence
- Application for Letter for Exemption from Manufacturing Licence
Actually, here’s their full list of User Guides–super helpful!
If all is well, an interim letter of approval will be issued within six to eight weeks.
You’ll be asked to provide some supporting documents and once done, the final Manufacturing License will be approved within seven to 60 days.
We wish you a smooth application, and just remember we’re here if you need help!
Let MISHU handle your MIDA license application
If you have a better use of time than filling in forms and compiling documents, get in touch with us – we’ve helped many businesses secure their MIDA licenses and incentives, and we’d be happy to help you.