An Introduction to Business Registration in Sarawak: The Legal Essentials

The laws which govern the setting up of most retail businesses in Sarawak are the Business Names Ordinance (Cap 64)[i] and the Business, Professionals and Trading Licensing Ordinance (Cap 33)[ii] both of which have been declared Federal Law pursuant to F.L.N. 200/65.

If your business is not registered, and you continue to trade, you may potentially find yourself committing an offence and liable to a fine of RM100.00[iii] per day and if you are trading without a trade licence you may be additionally liable for a fine of RM1000.00.[iv] In addition, depending on the nature of your business, your local council (e.g. DBKU, MBKS MPPS, etc.) may require you to obtain an additional permit/licence in order to operate.

The registration of a business in Kuching is overseen by Lembaga Hasil Dalam Negara (LHDN). Their offices (as of the writing of this article) are located at:

Wisma Ting Pek Khiing, Aras 2-4, 6-8, 10-12A, No.1, Jalan Padungan, Sarawak, 93100 Kuching.

For those in Sarawak wishing to register a business outside of Kuching, the law provides that the District Officers are empowered to register businesses and issue trading licences.[v] [vi] (A list of District Offices can be found at https://sarawak.gov.my/web/home/list_agency/243).

Before going to LHDN/ your Local District office it is advisable to have the following information/documents on hand:

• 3 different ideas for your business name (which should be related with your business);

• Nature of your business (Food and Beverage, Health, Laundry, Car Wash etc.); and

• A prospective business address (supporting documents including a tenancy agreement and a copy of land title will be required for registration).

• An idea of the council requirements, the author’s advice is to find out what documents are necessary before starting the business registration process as some may take some time to procure (e.g. floor plans, locality plans). Refer to Section 2 of this article under “Registration” for more information.

After obtaining this information/documents, the steps to register your business are as follows:

1. Name Search

v

2. Business Registration
v
3. Licence Collection

1. Name Search

As provided by the Business Names Ordinance, you will first need to register the name of your business.

In Kuching, this is done at the LHDN offices above, outside of Kuching you may go to your local District Office. You are able to check the availability of a business name beforehand at LHDN’s website (https://spnp.hasil.gov.my/).

At the LHDN office, let the guard at the entrance know that you are there to register your new business. They should direct you to a “kaunter Pencarian Nama Perniagaan”. You should also be given a form and be requested to give three name options for your business.

Once checking availability, the officer will then give you a set of forms to fill including:

● Borang IRD No.8- Pind.1/86 (Trade licence application form);

● Borang R20-Pind.1/86 (Business Names Ordinance form);and

● Borang TL from Jabatan Statistik

After the search, you will now have 10 days to complete the registration of your business.

2. Registration

You will need to complete the above mentioned forms in and also acquire the following:

● A stamped copy of your Tenancy Agreement (or Sales and Purchase Agreement where applicable) in the name of your Business for your Business Premise;

● An Authorisation Letter from Owner of Business Premise;

● Business Stamp which includes the full commercial address;

● A copy of your Identity Card; and

● Any additional permits that may be necessary from your local council*/ regulating bodies.

*Additional Information on Obtaining Local Council Approval

It is advisable to begin this process early, as it may require some time to obtain approval. This will be relevant for businesses such as, laundromats, food and beverage outlets, car washes, karaokes, barbers etc.

Please note that it is impossible to list all documents which are required in every scenario as different local councils will have different requirements.

**(As different councils may have different requirements, you are advised to  check your own local council’s website, for MBKS https://mbks.sarawak.gov.my/web/subpage/webpage_view/79 and for DBKU https://dbku.sarawak.gov.my/page-0-290-354-License-Permit.html or to visit them physically).

***There are times where particular local councils will require you to obtain a trade licence for your permit application. This results in a “chicken and egg” situation where you will always need to have obtained one to apply for the other. The author’s advice is, that until this administrative loophole is closed, one obtains a written copy of the local council’s requirements first and inform the LHDN officer that the trade licence is necessary for the approval of the permit.

After all these documents are obtained; you will need to bring them, together with your completed forms, back to the LHDN office. You will be asked to pay a processing fee and be given a receipt. You are advised to get a contact number to follow up with. Processing may range from a few days to a few weeks.

3. Licence Collection

Once your licence is issued, you will need to collect it by going to LHDN. After collection, you may then begin to trade.

There should be 3 different documents that you collect:

● Sijil Pendaftaran Nama-Nama Perniagaan (R.22-Pind.1/86)

● Extract Of Business Names Registration/Petikan Nama-Nama Perniagaan

● Lesen Perdagangan Borang 1 (I.R.D. No.7-Pind 1/86)

Once collected you are required to display the certificate of registration[vii] and the trade licence[viii] at a conspicuous position on the premises of the business for inspection. Failure to do so may cause your certificate of registration to be cancelled[ix] or with respect to your licence, that you be guilty of an offence with a fine of two hundred ringgits.[x]

[i] s. 4 of the Business Names Ordinance 1932 (Cap. 64 (1958 Ed.)). Read together with the Schedule maintains that this applies to mining business, import or export trade, and wholesale or retail trading business on land held under title other than for the purpose of erecting a market thereon.

[ii] Part II of the First Schedule of the Business, Professionals and Trading Licensing Ordinance 1955 (Cap. 33 (1958 Ed.)) read together with the Third Schedule outlines which business require trade licences, and which are exempt.

[iii] Supra at 1, s.14.

[iv] Supra at 2, s.3.

[v] Notably, for businesses outside of Kuching, s.3(2) of the Business Names Ordinance provides that District Officers are to be in charge of registration of businesses.

[vi] Similarly, for businesses outside of Kuching, s.5(2) of the Business, Professionals and Trading Licensing Ordinance provides that District Officers may issue trading licences.

[vii] Supra at 1, s. 7(2).

[viii] Supra at 2, s.18.

[ix] Supra at 1, s. 7(3).

[x] Supra at 2, s.21.