Business in Malaysia

To run and operate a business in Malaysia, you need a business license. Just about every business in Malaysia requires some business license or permit of some sort. The types of licenses would differ depending on the type of industry you’re involved in. This includes if you intend run this type of business in Malaysia. An Education License in Malaysia is required if you intend to operate learning centres in the country. 

Last year, The Star published an article in 2018 urging netizens to be wary of private centres, especially as some of these may be illegal centres that are operating without a license. The Ministry of Education (MOE) Malaysia has made it very clear that it will not endorse certificates which come from unlicensed centres. This must be taken seriously because it is a requirement by the Foreign Affairs Ministry that any student who intends to further their studies abroad at higher education learning institutions must have endorsed certificates to do so. 

In Malaysia, there are 18 categories of registered private educational institutions. These consist of private schools and centres, including tuition, enrichment and language centres. However, private learning centres (sometimes referred to as private education institutions [PEIS]) do not fall into these categories. According to MOE, there are instances where certain tuition centres in Malaysia only have a Tuition Centre License, but they operate similar to a school. In the same article by The Star, the Ministry of Education Malaysia stated that they were “seriously looking at these centres existence and the issues involving these centres as it is against the provisions of compulsory education set out in the Education Act”. 

What Business Licenses Do Education Centres in Malaysia Need?

Section 79 of the Education Act 1996 in Malaysia states that all education institutions need to be registered with the Registrar General of the Ministry of Education. Section 2 of the act defines an such an institution as “a school or any other place where, in carrying on the work of an organisation or institution, persons are habitually taught, whether in one or more classes, and includes a kindergarten (childcare centres) and a distance education centre.” 

This means that national schools which are set up by the Ministry must also have a valid education license to be operational. However, this excludes places which are dedicated to teaching religion. 

All educational institutions in Malaysia must have a certificate of registration under Section 82 of the act. This certification must clearly be displayed in a visible location on the centre’s premises. 

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Criteria for Obtaining an Education License

To obtain this license from the Registrar General, you will need to meet the following criteria under Section 84:

  • Your premise must meet all the prescribed health and safety standards. 
  • The name of the institution must not be improper or undesirable. 
  • The area you intend to open your institution must not have too many other existing schools or centres nearby. 
  • Your institution must not be used for “a purpose detrimental to the interests of Malaysia, the public or the pupils.” 
  • Your registration form must not contain any false or misleading information. 
  • The person you appoint as the chairman of the board of governors or head of the teachers in your school must be suitable for the position. 


Employees in the Education Institution Must Be Registered

Section 88 of the Malaysia Education Act also requires that any employee of an educational institution must be registered with the Ministry of Education. This includes any person who is acting as a governor of the school. 

If your educational institution hires any employee who is not properly licensed or registered with the Ministry of Education, you could be held liable. The penalty for this offense could be a penalty of RM30,000 and/or up to 2-years in prison. Therefore, it is important to ensure that your employees have the necessary legal requirements needed to work at your educational institution. When dealing with employment agencies to source your candidates, be sure to conduct a thorough background check.  


Other Important Key Facts About Education and Schooling in Malaysia

Malaysian children who are at least 6-years old on the 1st of January will be required to attend primary school. This is a mandatory requirement made compulsory by Section 29A(2) of the law. 

Section 29A(2) of the act states in very clear terms that “a parent who contravenes subsection (2) shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding RM5,000 or to imprisonment for a term not exceeding 6-months or both.” 

Therefore, not only do parents in Malaysia have to ensure that they children are enrolled in school according to the law, but they have to ensure that the schools are not illegally run schools too. Foreign investors who intend to start a business in this sector must take note of these requirements.  

The Ministry of Education is urging these institutions – or anyone who intends to set up such an institution in Malaysia as a business – to be registered and comply with the guidelines. If the private school (or schools involved in the private education sector) intends to run an international curriculum like the IGCSE for example, they must register themselves as an international school.  


Ready to Set Up a Business in Malaysia?

Paul Hype Page has vast experience helping foreign investors from all over the world set up a business in Singapore and Malaysia. We have helped numerous business entities find their footing and we can do the same for you. For more guidance on licensing needs based on the business activities required, visit our website or contact us today for more information.