Malaysia: Operating a Business

Sendiran Berhador SDN BHD is a Private Limited Company.

Number of partners: Minimum: 2
Maximum: 50
Capital (max/min): Minimum two ordinary shares of MYR 1 each
Shareholders and liability: Liability is limited to the nominal value of the subscribed shares.

Berhad is a Public Limited Company.

Number of partners: Minimum: 2
Maximum: No limit
Capital (max/min): Minimum two ordinary shares of MYR 1 each
Shareholders and liability: Liability is limited to the nominal value of subscribed shares.

Perkongsion Liabiliti Terhad or PLT is a General Partnership

Number of partners: Minimum 2 and maximum 20.
Capital (max/min): No minimum
Shareholders and liability: Liability is limited to the nominal value of subscribed shares.

Business Setup Procedures

The Competent Organisation

The Companies Commission of Malaysia (SSM) has the power, as the representative of the Ministry of Domestic Trade and Consumer Affairs, to register, form and strike off Malaysian companies and enterprises. Its main functions are administration and implementation of the applicable laws, registering of companies and enterprises, keeping official company and enterprise dossiers, and making company directors aware of ethical rules. The SSM is also a watchdog organisation.

For Further Information

Consult Doing Business Website, to know about procedures to start a Business in Malaysia.

Financial Information Directories

Dun & Bradstreet - Worldwide directory with financial information on businesses

Recovery Procedures

Principle

For the formalities of company restructuring and recovery, visit The Asia Pacific restructuring and insolvency.

Minimum Debt-to-Capital Ratio Triggering Liquidation

None

Bankruptcy Laws

Bankruptcy Act of 1967

Reorganization and Rehabilitation Laws

Bankruptcy Act of 1967 and the Companies Act of 1965.

For Further Information About the Labour Market

International Labour Organisation

Opening Hours

 

• Legal Weekly Duration

48 hours a week.

• Maximum Duration

Working hours must not be over 9 hours a day and 48 hours a week.

• Night Hours

Between 10 pm and 5 am (prohibited for women)

Working Rest Day

One rest day a week is laid down by the law.

Paid Annual Vacation

8 days for less than two years' length of service, 12 days for two to five years' length of service, and 16 days for more than five years' length of service.

Retirement Age

There is no legal age for retirement in the private sector even if the EPF (Employment Provident Fund) considers people are eligible from 55 for men and 50 for women.

Child Labour and Minimum Age For Employment

Children under 14 must not work between 8 pm and 7 am the following day; they must not work more than 3 consecutive hours without a 30 minute break; they must not work more than 6 hours a day, and if they go to school, the total time must not be more than 7 hours, time spent at school included.

Informal Labour Market

The informal sector allows a large part of the population to survive. Malaysia has a score of 3/5 according to the index of economic freedom linked to the informal market (Heritage Foundation).

Pay

Minimum Wage

According to the government data, the minimum wage was MYR 1,500 per month in 2022.

Average Wage

Average montly salary for employees: MYR 2,933; median montly salary: MYR 2,062 (source: Department of Statistics Malaysia, 2020).

Other Forms of Pay

• Pay For Overtime

Paid one and a half times the normal rate of remuneration.

• Pay For Rest Days Worked

Paid twice the normal rate of remuneration (or three times for working on a public holiday).

Social Security Costs

The Areas Covered

Accident at work, disability.

Contributions

Contributions Paid By the Employer: Employees’ Provident Fund (EPF) :

• below 60 years of age: 12% for income up to MYR 5,000, 13% for income equal or above MYR 5,000
• age 60 and above: 4%

Employment Injury Insurance Scheme (EIIS) and Invalidity Pension Scheme (IPS): based on the employee’s monthly wages, up to a maximum of MYR 69.05 for the employer.

Employment Insurance System (EIS) : 0.2% (capped at MYR 4,000 per month, and up to a maximum of MYR 7.90).
Contributions Paid By the Employee: Employees’ Provident Fund (EPF) :11% or 5.5% (depending on the age)

Employment Injury Insurance Scheme (EIIS) and Invalidity Pension Scheme (IPS): based on the employee’s monthly wages, up to a maximum of MYR 19.75 for the employee.

Employment Insurance System (EIS) : 0.2% (capped at MYR 4,000 per month, and up to a maximum of MYR 7.90).

Competent Organization

Social Security Organisation (SOCSO)

Recruitment

Method of Recruitment

Private and public recruitment agencies, Internet, individual interview.

Recruitment Agencies

A list of private recruitment agencies is available on the website of the Ministry of Human Resources.

Recruitment Websites

JobsDB Malaysia

The Contract

Dispute Settlement

Social Partners

Employer Associations

MEF - Malaysian Employers Federation
MICCI - Malaysian International Chamber of Commerce and Industry
SMI - SME Association of Malaysia

Social Dialogue and Involvement of Social Partners

There are two national organisations: the Malaysian Trade Union Corporation (MTUC) and the Congress of Unions of Employees in the Public and Civil Service (CUEPACS).

Unionisation Rate

9.5% of workers are unionized.

Regulation Bodies

Ministry of Human Resources