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Guide to Start a Trading Business in Malaysia

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Guide to Start a Trading Business in Malaysia

Malaysia continues to position itself as a strategic hub for trade and commerce within Southeast Asia, offering a business-friendly regulatory environment, well-established infrastructure, and access to regional and global markets. For both local and foreign investors, starting a trading business in Malaysia offers attractive opportunities when the proper legal and operational requirements are met.

This guide outlines the key considerations and procedures required to establish and operate a trading business in Malaysia in compliance with local regulations.

  1. Define the Trading Activities

    The first step is to clearly identify the nature and scope of the trading business, as this will determine the relevant licenses, permits and regulatory requirements:
    (1)
    Domestic Trading - Wholesaling or retailing within Malaysia.
    (2)
    Import and Export Trading - Cross-border trade involving goods entering or exiting Malaysia.
    (3)
    E-commerce or Marketplace Selling - Online trading through platforms such as Shopee or Lazada.

    A clear business model helps ensure that your company complies with the appropriate regulatory framework and obtains the necessary approvals before commencing operations.

  2. Basic requirements to set up a Trading Company

    To start a trading business in Malaysia, investor must set up a company limited by shares. A limited company may be fully or partially foreign-owned, depending on the nature of the business activities.

    The basic requirements to set up a limited company under the Companies Act 2016 are as follows:
    (1)
    At least one subscriber to the company’s shares;
    (2)
    At least one director who is at least 18 years of age and ordinarily resides in Malaysia;
    (3)
    A company secretary;
    (4)
    A registered office in Malaysia; and
    (5)
    A minimum paid-up capital of RM1.00.

    However, please note that for the purpose of applying for certain licences, the company may be required to increase its paid-up capital to meet the minimum capital requirements imposed by the relevant licensing authorities.

  3. Licensing and Regulatory Compliance

    Depending on the nature of the goods being traded, additional licenses or permits may be required. These may include:

    (a)
    Local Council License

    Business premises and signboard licenses must be obtained from the relevant municipal council based on the location of the business address. These approvals are mandatory before the business can operate physically at its designated premises.

    In Malaysia, different areas fall under different local councils. Each municipal council has its own requirements, processes, and fee structures.

    (b)
    Wholesale Retail Trade (“WRT”) License

    For foreign-owned trading companies in Malaysia, a WRT license may be required, particularly if more than 50% of the company’s shares are owned by non-Malaysians. The Ministry of Domestic Trade and Cost of Living is the authority responsible for issuing this license. To apply for a WRT license, the company must have a minimum paid-up capital of RM1,000,000, be properly incorporated under the Companies Act 2016, and meet other requirements such as having a valid tenancy agreement and business setup ready for inspection.

    (c)
    Import and Export Licenses

    Companies involved in cross-border trade must obtain import and export licenses, which are issued by the Ministry of International Trade and Industry (MITI), the Royal Malaysian Customs Department, or other applicable authorities

    (d)
    Product-Specific Approvals

    Certain regulated products require additional approvals to ensure compliance with Malaysia’s safety, quality, and regulatory standards. For example, the Ministry of Health (MOH) approves food and beverages, the National Pharmaceutical Regulatory Agency (NPRA) oversees pharmaceuticals, and agencies such as SIRIM regulate industrial or technical products. While the import/export license permits the movement of goods, product-specific approvals ensure the products themselves meet local regulatory requirements before they can be sold or distributed.

  4. Conclusion

    Starting a trading business in Malaysia offers significant growth opportunities, especially in sectors linked to regional and global trade. By following the regulatory framework and ensuring proper governance, businesses can benefit from Malaysia’s open economy, robust legal infrastructure, and access to major trade agreements.

    Entrepreneurs are encouraged to seek professional advice or engage a licensed corporate service provider to ensure a smooth setup process and full compliance with Malaysian business laws.

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

Disclaimer

All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.

If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:

Email: info@kaizencpa.com
Tel: +852 2341 1444
Mobile : +852 5616 4140, +86 152 1943 4614
WhatsApp/ Line/ WeChat: +852 5616 4140
Skype: kaizencpa

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