The Ultimate Guide To Opening A Private Employment Agency In Malaysia [2024]

According to The Department Of Labour’s official list, as of writing there are 1156 registered private employment agencies across Peninsular Malaysia, with 751 of them based in the Klang Valley alone!

These numbers suggest the private employment agency sector is a lucrative market ready to accommodate new entrants. 

This article provides a complete guide for entrepreneurs who wish to open a private employment agency of their own (and a pitch at the end to let MISHU handle it for you!).

Here’s how we’ll break it down:

1. We’ll begin with the list of requirements
2. We’ll cover what a typical registration process looks like (timeline included)
3. We’ll provide fees when available so you can plan accordingly

P.S. Most of the information below has been condensed from the Private Employment Agencies Act 1981, so if you want more details, here’s your extra credit reading assignment!

Otherwise, let’s start!

Minimum requirements

We’ll break this down into three sections: company, director, and capital requirements.

Company requirements

You will need to first incorporate a company that meets the conditions set by the Department of Labour:

• At least 51% of the company must be held by a Malaysian citizen
• Must have a company name beginning with ‘Agensi Pekerjaan’
• Must specifically use ‘to carry on the business as Private Employment Agency to recruit and place worker/s to another employer’ as the business activity description
• Must meet the paid-up capital requirements of the intended license
• Must have suitable premises to perform recruitment activities

Regarding the last point, guidelines for a ‘suitable premise’ are as follows:

• Easily accessible by public transport and located in a public place
• Not near premises that carry out activities leading to immoral activities (such as a nightclub)
• Displays a clearly visible signboard containing the name and license number of the agency
• Must be a commercial premise (residential homes with SOHO or SOVO status are allowed)
• Note: While co-working spaces are not expressly prohibited, they may present complications and The Labour Department reserves the right to reject an application at their discretion

Directorship requirements

Because employment agencies deal with human capital, the Department of Labour has specific requirements for their directors:

• Must be a Malaysian citizen
• Must not be a discharged bankrupt
• Must provide a sworn statement that they have not been convicted of any offense under any written law relating to human trafficking and forced labor

We can’t imagine anyone engaging in human traficking would submit an application to the Labour Department, but you can never be too careful.

Capital requirements

Depending on specific business activities, private employment agencies are registered under three categories of licenses with different capital requirements:

Category	Brief Description	Minimum Paid up Capital	Money Guarantee	Money Guarantee To Open New Branch
A	Job placement for job seekers within Malaysia	RM50,000	RM5,000	RM5,000
B	Job placement for job seekers within and outside Malaysia and foreign domestic servants within Malaysia	RM100,000	RM100,000	RM30,000
C	Job placement for job seekers within and outside Malaysia, and non-citizen employees within Malaysia	RM250,000	RM250,000	RM100,000

The money guarantee is used to continuously ensure an agency fulfils its responsibilities and complies with all requirements. If the money is used, the agency must top it up so it alwyas meets the minimum money guarantee amount.

Which license is right for you?

Great question – take a look at the descriptions below to see which fits your use case.

License Category	Permitted Activities
Category A License	1. Conduct recruitment activities for local workers only 2. Hold training sessions for employees not exceeding three days 3. Organise career seminars, counseling, consultation, and job fairs.
Category B License	Run recruitment activities for local workers and foreign domestic workers 1. Represent employers in matters of application, recruitment, and placement of foreign domestic workers (including dealings with government agencies such as KDN, JTK, JIM, and others) 2. Place local workers in jobs abroad 3. Organise training sessions for workers not exceeding three days 4. Organise career seminars, counseling, consultation, and job fairs
Category C License	1. Run recruitment activities for local workers, foreign domestic workers, and non-citizens 2. Represent employers in matters related to applications, hiring and placement of foreign domestic workers and non-citizens (including with government agencies). 3. Placing local workers in jobs abroad 4. Conduct training sessions for workers not exceeding three days 5. Organise career seminars, counselling, consultation, and job fairs.

Regardless of which license you require, the setup process is the same, which brings us to our next section.

Process & Timeline

While there may be slight variances, consider the following steps, respective timelines, and the documents/fees required. 

Step	Time Taken	Necessary Documents / Fees
Step 1: Company incorporation	3 – 5 working days	Register for account on SSM MyCoID and carry out name reservation + incorporation. You will be asked to provide the following information: The proposed company name The status of a private or public company The proposed type of business The address of registered office The business address Complete details of directors(s) and promoter(s) Declaration from directors(s) and promoter(s) Declaration of compliance from individuals responsible for incorporation Fee: RM1,010
Step 2: Apply for premise and signboard license	15 – 30 working days	These must be obtained from the Local Authority where your premise is located. You will be asked to provide copies of the following: 1. complete set of SSM documents 2. the Sale and Purchase Agreement OR Tenancy Agreement 3. applicant’s identity card OR passport photo 4. your office layout plan 5. Photographs of the business premises 6. Certificate of Completion and Compliance (CCC) OR Certificate of Fitness (CF) Quit Rent (Cukai Tanah) and Assessment (Cukai Taksiran/ Pintu) receipts 7. the Fire Department’s support letter/ Bomba Certificate Photographs of the outer part of your premises showing where the signboard will be displayed 8. A colour visual of the signboard indicating design, colours and physical measurement You will also need to submit to a premise inspection by Local Authority officers and make changes if requested. Fee: Differs between municipalities
Step 3: Apply for JTK license with Department of Labour	30 working days	You need to fill in the following documents and submit them physically at the nearest Labour Department branch: 1. Private Employment Agency License Application Form 2. Sworn Statement Official document checklist Fee: RM300
Step 4: Register agency employees with Department of Labour	30 working days	As before, these documents must be submitted physically at a Labour Department branch. 1. Application for Identification Document Official document checklist Fee: RM50 (per employee)
Step 5: Submit monthly reports	n/a	Every registered private employment agency is required to submit the following four documents to the Labour Department every month: 1. Record of Registration of Jobseekers, Placement & Fee Collected 2. Record of Registration of Employers, Placements & Fee Collected 3. Record of Vacancies 4. Acknowledgment of Acceptance of Employees by Employers
Step 5: Renew JTK license	30 working days	Every license category is valid for 24 months from the date it is issued, after which it must be renewed. As before, these documents must be submitted physically at a Labour Department branch. 1. Application for Agency License Renewal Official document checklist Fee: RM100

For a full list of the various processes involved in running an employment agency, check out the Labour Department’s official document list.

Is that everything you need to know?

Yes and no.

Keep in mind that this is a guide to opening a private employment agency in Malaysia, and in that regard, yes, you know everything you need to start.

However, successfully running and growing your employment agency is another matter and involves a great deal of statutory knowledge above the usual statutory requirements of less regulated industries.

In that sense, no, you probably don’t know everything you need to know.

We’re big believers in just-in-time learning, but perhaps this is something you should plan for before starting your agency to ensure smooth long-term growth.

Start your employment agency with MISHU

MISHU has assisted multiple parties incorporate their private employment agencies in Malaysia. Our team is ready to answer any questions on and assist with registration, business license application, and statutory compliance. Get in touch!