After setting up your business in Malaysia, you might require a business license or permit. 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.
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 includes:
1. Private Higher Educational Institutions (PHEIs)
- Private universities and branch campuses of foreign universities with university status;
- Private colleges/institutions with non-university status; and
- Technical and vocational training institutions
2. Private Educational Institutions (PEI)
In Malaysia, there are 17 categories of registered private educational institutions (PEI). These consist of private schools and centres, including tuition, enrichment and language centres. 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”.
Categories of Private Educational Institutions include:
- Private Primary School
- Private Secondary School
- Islamic Primary School
- Islamic Secondary School
- International School
- Expatriate School
- Special Education School
- Private Kindergarten
- Tuition Centre
- Language Centre
- Computer Centre
- Training/Commerce Centre
- Vocational/Technical Centre
- Mind Enrichment Centre
- Guidance Centre (Sabah & Sarawak only)
- Branch (Name the main PEI)
- Other PEI
Information Needed In Obtaining an Education License
Private Educational Institutions (PEI)
1: Provide Applicant’s Particulars
- Name, ID, Passport, Address, Tel, E-mail
2: Provide Business Information
- Type of entity, Reg. No., Capital, Source of Finance, Stakeholder details etc
3: Provide Particulars of Institution
- Suggested name of institution
- Address with a map (Kindergartens and schools require letter of no objection from local councils)
- Learning times and full or part time
- Medium of instruction (language)
4: Provide details of Management
- Particulars of board of governors e.g. Chairman and Members. (Minimum 3 person for kindergarten/tuition centre; 5 person for other PEIs)
- Details of Principal/Headmaster (CV, supporting documents etc.)
- Teachers’ Particulars
- Non Academic Staff Particulars
- Curriculum/Course/Programme/Training and Fee Structure
5: Provide details of Premise and Amenities
- Information of Premise (Location, Types, Ownership, Rental, Floor Area)
- Facilities of Premise (Classroom, Library, Co-curricular, Administration, Security & Health, Other Facilities etc.)
6. Rational For The Establishment Of PEI
Private Higher Educational Institutions (PHEIs) (Universities)
*The following is adapted from Malaysian Investment Development Authority’s guide on Education and Industrial Training Services
1. Approval in Principle to Establish PHEIs
In order to set up a PHEI in Malaysia, applicants are required to submit a proposal to the Registration and Standard Division under the Ministry of Higher Education (MOHE) detailing the PHEI’s concept plan which may be followed by a presentation. An approval in principle will be granted for the establishment of the PHEI, if MOHE is satisfied with the concept plan.
2. Approval to Establish PHEIs and Approval to Conduct Courses of Study
Upon approval of establishment, the company is required to submit a formal application to MOHE to establish the PHEI, and to conduct any course of study or training Education and Industrial Training Services 3 programme either singly or jointly with any university, University College, or other higher educational institutions (public/private/professional body in or outside Malaysia).
MOHE will then forward the application to conduct the course of study to the Malaysian Qualification Agency (MQA) for processing. The application must include details of the course curriculum, teachers, facilities and the management system of the courses to be conducted. A Panel of Assessors (PoA) from MQA will process the application to conduct the courses of study, and will give its recommendations to MQA for a decision.
Letters of approval to establish the PHEI and to conduct the courses of study will be issued by MOHE to the institution.
3. Registration of PHEIs
Upon approval, the company is required to register with MOHE as a PHEI under the Private Higher Educational Institutions Act, 1996 (Act 555) and Regulations. Applications to register as a PHEI should be submitted to the Department of Higher Education. A Certificate of Registration will then be awarded
4. Programme Accreditation by the Malaysian Qualifications Agency (MQA)
Stage 1 for Provisional Accreditation and Stage 2 for Full Accreditation.
Tips in successful application of 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.
Why Education License Is Important
1. Obtaining an Education Licenses is important if our centre or school’s wishes to issue recognised certificates.
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.
Tips: Approach is to find out if your business activity requires an education license as many businesses can be efficiently restructured.
2. It is a parent/guardian’s responsibility to ensure schools are licensed
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.
Usually, if your plans include to provide academic certificates recognized by foreign affairs, getting your institution accredited and licensed is extremely important. If you are operating a tuition centre teaching school subjects, you are required to obtain a tuition centre registration. If you are operating in a niche market like teaching digital animation or coding languages, you might not require a license.
If you are just starting out after setting up your Malaysia company, getting a full-fledged accredited license might be a stretch too. You should call us to discuss what is the best way to move forward in structuring your business.