Unless otherwise indicated, the Malaysia company stated in this article refers to a private company limited by share(s) (identified through the words ‘Sendirian Berhad’ or ‘Sdn. Bhd.’)  formed and incorporated in Malaysia in accordance with the Malaysia Companies Act 2016.

Tour operating business (Inbound and Outbound) means any business of providing all or any of the following services:

1. Arranging for sale or commission any transportation, accommodation, tour services or any other incidental services for tourists within or outside Malaysia;
2. Organising or conducting for sale or commission inbound or outbound tours;
3. Providing conveyances for hire to tourists; or
4. Any other services incidental to any of the activities enumerated above.

Travel agency business (Ticketing) means any business of providing all or any of the following services:

1. Selling, arranging or making available for commission tickets entitling a person to travel on any conveyance either by land, sea or air;
2. Selling, arranging or making available for commission accommodation places within Malaysia or outside Malaysia; or
3. Any other services incidental to any of the activities enumerated above.

Before a tour operating/travel agency business can legally start operating after incorporation as a private limited company with the Company Commission of Malaysia (CCM) pursuant to the Companies Act 2016, it has to apply for relevant licenses for its business premises and signboard from the respective local town council. Thereafter, the company can proceed with the application for the license with the Ministry of Tourism, Arts and Culture (MOTAC) and there are conditions to be observed as follows for the application to be approved:

1. Equity and Paid-up Capital Requirements
   
   The company who are interested to set up this business is required to meet the equity and paid-up capital requirements according to the type of license the company wishes to apply. Foreign companies are only allowed to apply for Inbound and Ticketing licenses. The shareholder of the foreign company is required to have at least three (3) years of experience in the tourism industry. Append below are the type of license that a foreign company is entitled to apply and the requirements for each type of license:
   

   No.	Type of License	Equity Ownership	Maximum Shareholding	Minimum Paid-up (RM)
   1	Inbound	Foreign Company (ASEAN/Non ASEAN)	100%	1,500,000
   2	Inbound and Ticketing	Foreign Company (ASEAN)	70% - Singapore/ Cambodia only 51% - Except Singapore and Cambodia	1,000,000
   3	Inbound and Ticketing	Foreign Company (Non ASEAN)	30%	500,000
   4	Outbound	Foreign Company (ASEAN/Non ASEAN)	Not Allowed	Not Applicable

   
   
2. Licensing and Registration
   
   To carry out a tour operating/travel agency business in Malaysia, the company need to submit an application for license to carry out or operate a tour operating/travel agency business  together with the necessary documents and a processing fee of RM100.00 via  Tourism Industry Licensing System (SPIP).
   
   Applicant must submit required documents as follows:
   

   (1)	SSM printout (Company Search) dated within 14 days from the date of application
   (2)	NRIC/Passport (in colour) of the shareholders and directors
   (3)	Supporting letter on cooperative relationships with overseas travel agencies
   (4)	Draft proposals on tour packages (Inbound & Outbound)
   (5)	Paperwork containing business planning, target number of tourists to Malaysia and short-term revenue for the company which its shareholders are foreign companies.

   
   Once the application is approved, the company must take the following actions:
   
   

   (1)	To provide business premises within two (2) months from the date of approval letter in accordance with the following criteria: (a) Meet the business premises floor space requirement (b) The business’s head office premise must be situated within a structure and shall   have permanent address (c) The business premise does not share with other business (d) The business premise must be in a commercial area and not in the residential area
   (2)	To submit required documents for inspection of premises as follows: (a) A copy of Office Rental Agreement (at least 1 year period) or Sales & Purchases Agreement if the premises is owned by the company (b) A sketch of the floor plan (c) Premise photo (inside and outside of premises area)
   (3)	To submit a copy of the tourism association’s membership certificate recognised by MOTAC. The list of tourism association recognised by MOTAC is as follows: (a) MATTA – Malaysia Association of Tour & Travel Agent (b) BUMITRA – Bumiputera Travel And Tour Agents Association of Malaysia (c) MCTA – Malaysia Chinese Tourism Association (d) MITTA – Malaysia Indian Tour & Travel Association (e) MITA – Malaysia Inbound Tourism Association (f) CRAM – Car Rental Association of Malaysia (g) MSDA – Malaysia Scuba Diving Association (h) PAPUH – Persatuan Agensi Pelancongan Umrah Dan Haji
   (4)	To submit a copy of “Travel & Tour Management Course” (TTMC) certificate At least one (1) representative of the company who are in the key post, i.e. Chief Executive Officer, Chief Operating Officer, Director or General Manager must attend TTMC organised by Tourism Training Institute recognised by MOTAC. Each participant is required to sit for the TTMC assessment test which will be conducted at the end of the course. The validity period of the certificate is dependent on the validity period of the license issued by the Licensing Division which is between one and three years. The course certificate will include the certificate code (for MOTAC’s reference), name and position of the participant in the company, company name as well as the validity date of the certificate.
   (5)	To pay the license fee upon receipt of the notice from MOTAC stating that all requirements and criteria imposed on the premises are met.

Kaizen, together with its associate firms in Malaysia, can help the clients to perform these compliances formalities so as to maintain the Malaysia company in good standing. Please call and talk to our professional accountants in Kaizen for further clarification.

See also:
Malaysia Company Incorporation Complete Package
Malaysia Company Incorporation (and Nominee Director) Package