Malaysia - Licensing Requirements for Professional ServicesMalaysia - Licensing Requirements
The services sector has been a driver of Malaysia’s economic and job growth in recent years. Since 2009, Malaysia has liberalized 45 services sub-sectors. Malaysia allows 100-percent foreign equity participation in private hospital services, medical specialist clinics, department and specialty stores, incineration services, accounting and taxation services, courier services, private universities, vocational schools, dental specialist services, skills training centers, international schools, vocational schools for special needs, and quantity surveyors services.
Architectural and Engineering Services
In November 2014, the Lower House of the Parliament passed amendments to laws governing architectural services, quantity surveying services, and engineering services, which eased restrictions on foreigners working in these professions in Malaysia. The amended legislation on architectural services came into force in June 2015. Under Malaysia’s registration system for architects and engineers, foreign architects and engineers may only seek temporary registration. Foreign architectural firms are eligible only for special projects as agreed between Malaysia and an interested foreign government. Unlike engineers, Malaysian architectural firms may not have foreign architectural firms as registered partners. Foreign architecture firms may only operate as affiliates of Malaysian companies. Foreign engineering companies must establish joint ventures with Malaysian firms and receive "temporary licensing" which is granted only on a project-by-project basis and is subject to an economic needs test and other criteria imposed by the licensing board.
Legal services
Foreign professional service providers are generally not allowed to practice in Malaysia. Foreign law firms may not operate in Malaysia except as minority partners with local law firms, and their stake in any partnership is limited to 30 percent. Foreign lawyers may not practice Malaysian law or operate as foreign legal consultants. They cannot affiliate with local firms or use their international firm's name.
See : The Malaysian Bar
Accounting services
Foreign accounting firms can provide accounting or taxation services in Malaysia only through a locally registered partnership with Malaysian accountants or firms, and aggregate foreign interests are not to exceed 30 percent. Auditing and taxation services must be authenticated by a licensed auditor in Malaysia. Residency is required for registration.
Insurance
Bank Negara Malaysia (BNM; Malaysia’s Central Bank) regulates entities carrying out insurance business, insurance broking, adjusting and financial advisory. Insurers are licensed by Ministry of Finance, and must be approved and registered with BNM.
Foreign Direct Investment: 70 percent limit restrictions on foreign ownership of local insurance businesses.
Securities
Foreign shareholding limits in existing stockbroking companies is 70 percent. BNM permits 100 percent foreign ownership for qualified leading fund management companies in the wholesale fund management segment. In retail fund management, foreign shareholding limits is 70 percent.
Malaysian companies seeking listing in Bursa Malaysia (Malaysia’s stock exchange) are required to have at least 30 percent Bumiputra public shareholding spread. This guideline does not apply for foreign companies seeking listing on Bursa Malaysia.
Advertising
Local content rules apply for all channels of broadcast advertising: be it free-to-air TV, subscription TV, radio and satellite. This does not apply for printed publication, online and mobile content providers. Foreign film footage is restricted to 20 percent per commercial, and only Malaysian actors may be used.
In general, broadcast advertisements should not cause serious or widespread offence, especially in regards to race, religion, sex, sexual orientation, physical or mental disability. Unsafe practices condoning and provoking violence or anti-social behavior are not encouraged. Advertising should not portray and/or refer to any local or foreign living persons unless prior permission is obtained.
The following are deemed unacceptable under the Malaysian Code of Advertising Practice and the Malaysian Communications and Multimedia Content Code:
- Cigarettes, tobacco and accessories
- Alcoholic drinks advertisements are not allowed. Alcohol title sponsor of international sporting events held in Malaysia can only advertise and use the logo of said event, and not of the sponsor.
- The occult, fortune tellers
- Marriage agencies and friendship clubs
- Unlicensed employment agencies
- Gambling, betting
- Clothing with inappropriate messages
- Sexual scenes including kissing between adults, pornography
- Pig, pork products and its derivatives
- Fire crackers
- Any form of financial speculations intended to promote or attract interest in any stocks and shares
- Death notices, funeral and burial service notices, burial monuments
- Nightclub scenes
- Slimming products
- Sanitary protection products and incontinence pads for adults must be treated with restraint and discretion.
Advertisements compliance for medication, remedies, appliances, skills and services related to diagnosis, prevention and treatment of diseases or conditions comes under the jurisdiction of the Medicine Advertisement Board, Ministry of Health Malaysia. Pesticides Advertising Board, Ministry of Agriculture oversees pesticides advertisements.
Television and Radio Broadcasting
The Malaysian Government maintains minimum local content threshold on radio and television program broadcasting. Local TV stations are required to air 80 percent local Bumiputra content. Radio program local content threshold is 60 percent.
Malaysia further liberalized 28 new services subsectors in October 2017 under the 10th ASEAN Framework Agreement on Services (AFAS) package. Exemptions and carve-outs applies country-by-country.
The additional services subsectors are:
| Air transport services | Selling and marketing of air transport services |
| Refueling services | Aircraft catering services |
| Aircraft line services etc. | Aircraft leasing and crew |
| Aircraft leasing without crew | Aircraft repair and maintenance services |
| Airfreight forwarding services | Into-plane fueling services |
| Auditing services | Publishing newspaper |
| Cargo handling services | Ramp handling services |
| Baggage handling services | Passenger handling services |
| Legal services | Radia and television broadcasting |
| Audio video services | Banking and other financial services |
| Audio video services | Banking and other financial services |
| Business services | Computer reservations system services |
| Movement of personnel | Construction services |
| Liner cargo trade | Carbotage transport |
| Maritime transportation services | International maritime transport of cargo |
| International road services |
Other Barriers
U.S. companies have indicated that they would welcome improvements in the transparency of the former coalition Government (Barisan Nasional) decision-making and procedures, and limits on anti-competitive practices. A considerable proportion of government projects and procurement are awarded without transparent, competitive bidding.
The newly elected coalition Government (Pakatan Harapan) government has declared its commitment to fight corruption, promote transparency, objectivity and competency.
One of the first moves made was making the Malaysian Anti-Corruption Commission (MACC) an independent investigative agency with an increase in manpower and resources. The previously-lapsed “no-gift policy” will be strictly enforced and had been extended to include ministers, deputy ministers and political secretaries.
To ensure that no political leaders and senior government officials can abuse their position for personal or monetary gains, the PH government is tabling new regulations to make it mandatory for all political leaders and senior officials to declare their assets and income; senior government official are not allowed to hold position more than five Government Linked Company; Ministers and/or political leaders are no longer allowed to give support letters to any companies or person on projects or tenders.