BUSINESS LICENSE MALAYSIA-MITI-REQUIREMENTS & HOW TO APPLY
- Adeeb Ul Mulk
- 3 minutes ago
- 3 min read
What is a Manufacturing License?
In order for businesses to legally produce goods and services, the government of Malaysia issues a document known as a Manufacturing License. Making, modifying, combining, ornamenting, finishing, or otherwise processing or adapting any product or substance with a view to its use, sale, transit, delivery, or disposal is defined as "manufacturing activity" under the Industrial Coordination Act (ICA). A manufacturing licence is not required for the following commercial activities: Making rice via milling paddy Process of refining fresh palm fruit into crude palm oil through milling Manufacturing and refining of all kinds of natural rubber In accordance with the Industrial Coordination Act (ICA) 1975, the Malaysian Investment Development Authority (MIDA) oversees this license.
Manufacturing License threshold
A MIDA Manufacturing License is only available to manufacturers who meet two criteria.There are two possible ways to fulfil the second condition, while the first is obligatory: 1. At least 80% of full-time staff must be Malaysian 2. Choose between hiring 75 full-time workers or having a shareholder fund of RM2.5 million.
Benefits of meeting the threshold
There are a lot of benefits to getting a MIDA Manufacturing License, and it's also required by law.However, we will only highlight the two main ones: For five to ten years, you can enjoy a 70% to 100% income tax break by becoming a pioneer. You can deduct 60% to 100% of some capital expenditures under the Investment Tax Allowance (ITA). Manufacturers can apply for one, but not both, of these licenses in order to participate in what are called "promoted activities" that are good for the Malaysian economy. If you'd like to learn more about MIDA's incentives, which include numerous industry-specific schemes, this is just the beginning. You can find a comprehensive guide to incentives in MIDA's official website.
What if you fall below the threshold?
If a manufacturer does not fit any of the four categories listed above, they are required to seek a MIDA Exemption from Manufacturing License. Some MIDA incentives, such as Pioneer Status and ITA, are still available to them.
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