How to Start a Business in Malaysia as Foreigner | 2025 Legal Guide

How to Start a Legal Business in Malaysia as a Foreigner (2025 Guide)

Are you a foreigner looking to start a business in Malaysia and live here with your family? Malaysia remains one of the most attractive destinations in Southeast Asia for international entrepreneurs. However, as of 2025, government enforcement against unlicensed and improperly registered foreign businesses has increased significantly.

To legally operate and avoid penalties, you must comply with Malaysian corporate, licensing, and immigration regulations. This guide explains the legal steps to start your business in Malaysia and how Lim & Ani Associates SDN BHD can support you every step of the way.

Why Many Foreign Businesses Get Into Trouble in Malaysia

According to the Companies Act 2016, foreigners must register a Sendirian Berhad (SDN BHD) company and obtain the appropriate licenses and tax documentation before doing business. Common illegal practices include:

• Running a business under a Malaysian spouse’s name (Enterprise)
• Skipping license applications such as DBKL, WRT, or CIDB
• Not creating or submitting tax files
• Hiring workers without proper permits or contracts

These actions now result in government penalties, blacklisting, and in some cases, deportation.

Required Business Licenses in Malaysia (2025)

Below are the main licenses required for foreign-owned businesses, depending on the nature of your operation:

License Name	Authority	Purpose / Use	Common Industries
DBKL License	Dewan Bandaraya Kuala Lumpur	Local city council operating permit	Retail shops, offices, restaurants
WRT License	Ministry of Domestic Trade (KPDN)	Mandatory for foreign-owned retail or service businesses	Trading, online stores, showrooms
CIDB License	Construction Industry Development Board	License for construction and renovation work	Construction, renovation, engineering
ESD Registration	Expatriate Services Division	Required to hire foreign staff or apply for a work visa	All industries employing foreigners
MOF License	Ministry of Finance	Required for government project bidding and financial services	Consulting, logistics, IT
FOSIM / MESTI License	Ministry of Health	License for food safety and product approval	Restaurants, food importers

Government Crackdowns in 2025: What to Know

Increased inspections are taking place in 2025 by DBKL, SSM, KPDN, and the Immigration Department. Illegal business operations are being actively penalized.

Violation	Penalty in 2025
Unregistered company operation	Fines up to RM50,000, blacklisting by SSM, business shutdown
No business license (DBKL, WRT, etc.)	Sealing of premises, compound fines, loss of business rights
Illegal employment practices	RM10,000 fine per staff, potential jail time, immigration blacklist
Tax evasion or failure to submit tax files	Audit by LHDN, tax court action, bank freezes
Operating through spouse's Enterprise name	Closure, loss of visa rights, legal charges

How to Start a Fully Legal Business in Malaysia

To stay compliant and protect your investment, follow these key steps:

1. Register a SDN BHD company under the Company Act 2016
2. Apply for the required licenses (DBKL, WRT, CIDB, etc.)
3. Open a business bank account
4. Create a business tax file and submit yearly
5. Hire employees legally (locals or via ESD-approved permits)
6. Apply for a business visa or dependent permit if needed
7. Maintain proper business records for renewals and audits

How Lim & Ani Associates SDN BHD Can Help

With over 8 years of experience assisting foreign clients in Malaysia, Lim & Ani Associates SDN BHD offers complete support throughout your business setup and growth journey.

Our Services Include:

• SDN BHD Company Registration (3–5 working days)
• Business License Applications (DBKL, WRT, CIDB, ESD, MOF)
• Business Tax File Setup and Submissions
• Local Joint Venture Agreements
• Business Bank Account Opening
• Business Visa and Family Residency Permit Applications
• Official Visa Invitation Letters
• Ongoing Business and Legal Advisory

Our in-house team includes licensed lawyers, accountants, and immigration specialists—ensuring your business is always legally protected.

Useful Links

• Company Registration & Fee Info
• Business Advisory for Operating Companies

Contact LIM & ANI ASSOCIATES

Call Us:
Call: +60 11 2666 4168
Call: +60 10 206 9253
Call: +60 3 5885 6648 (Office Landline)

Email: [email protected]
Website: www.mbbusinessjoint.com

Conclusion

Malaysia is a land of opportunity for foreign business owners—but only if you do things legally. Avoid heavy penalties and protect your future by registering your company, securing the correct licenses, and staying tax compliant.

Let Lim & Ani Associates SDN BHD guide you through every step—from incorporation to licensing to visa support—ensuring peace of mind and long-term success.

© 2025 Lim & Ani Associates. All Rights Reserved. Serving investors from Malaysia, Singapore, UAE, UK, Bangladesh, India, Australia, and more.

Explore Key Business Topics

Company Registration Business News Malaysia Business Advisory in Malaysia 15 Best Business Ideas in Malaysia 2025 Malaysia My Second Home (MM2H) Advisory