Malaysia: Operating a Business

Legal Forms of Companies

Types of Companies and Capital (Max/Min)	Number of Partners/Shareholders and Liability
Private Berhad is a Private Limited Company. Minimum two ordinary shares of MYR 1 each	Minimum: 2 Maximum: 50 Liability is limited to the nominal value of the subscribed shares.
Public Berhad is a Public Limited Company. Minimum two ordinary shares of MYR 1 each	Minimum: 2 Maximum: No limit Liability is limited to the nominal value of subscribed shares.
General Partnership No minimum	Maximum 2 to 20 partners. Partners' liability is joint and several.

Enterprises Federation: SMI Association of Malaysia
Directory of Associations of SMEs and SMIs.

Source: Doing Business.

For Further Information: Consult Doing Business Website, to know about procedures to start a Business in Malaysia.
Companies Commission of Malaysia
The Competent Organization: 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 organization.

Principle: For the formalities of company restructuring and recovery, visit The Asia Pacific restructuring and insolvency guide 2006.
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.

	2010
Labor Force	12,200,000

Source: CIA - The world factbook

Source: UN - United Nations

Employed Persons, by Occupation (% of Total Labor Force)	2007
Agriculture, forestry, hunting	3.2%
Fishing	0.3%
Mines	0.1%
Clothing industry, manufacturing	41.1%
Electricity, gas and water supplies	0.3%
Construction	6.6%
Wholesale and retail trade, repairs to motor vehicles, motorcycles, personal and household goods	12.9%
Hotel and catering industries	4.0%
Transport, warehousing, communication	2.9%
Financial intermediation	4.7%
Real estate, rental, business activities	4.4%
Public administration, defense, social security	5.9%
Education	3.9%
Health and social care	0.6%
Other activities in community, personal and social services	8.7%
Household domestic	0.1%
Extra-territorial organizations and entities	0.1%
Others	0.1%

For Further Statistics: ILO, Laborsta Malaysia
For Further Information About the Labor Market: International Labour Organization

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 Labor 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 Labor 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).

Minimum Wage: No legally mandated national minimum wage
Average Wage: USD 5,751 per year (women)
USD 15,861 per year (men)
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).

The Areas Covered: Accident at work, disability.
Contributions: Contributions Paid By the Employer: 1.5 %.
Contributions Paid By the Employee: 0.5 %.
Competent Organization: Social Security Organisation (SOCSO)

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
Asiaco Jobs Center

Type of Contract: Called "Contract of Service" or "Contract of Employment", the contract is deemed to exist as soon as the employee starts to work. There are fixed-term contracts and open-ended contracts.

Breach of Contracts
Retirement: There is no legal age for retirement in the private sector but the EPF (Employment Provident Fund) considers people are eligible from 55 for men and 50 for women.
Dismissals: A dismissal needs three oral warnings beforehand in front of witnesses then three written warnings, followed by a conciliation meeting.
Other Possible Methods: Collective procedure (voluntary separation scheme) or limited procedure (retrenchment) of downsizing, contracts reaching their their expiry date.
Labor Laws: Attorney General's Chambers

Cases of Dispute: Immigrant workers and women are the most vulnerable; the most frequent abuses are non-payment of wages, confiscation of travel documents, not observing rest periods, physical violence.
Legal Framework: Industrial Relations Act 1967
Procedure: The Industrial Relations Act 1967 sets out the procedure to be followed.

Social Dialogue and Involvement of Social Partners: There are two national organizations: the Malaysian Trade Union Corporation (MTUC) and the Congress of Unions of Employees in the Public and Civil Service (CUEPACS).
Unionization Rate: 9.5% of workers are unionized.
Unions: National Union of Journalists Malaysia
Regulation Bodies: Ministry of Human Resources

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