Second-hand Dealers License
- C.A.(M)
- Jan 17
- 7 min read
Updated: Jan 29
Malaysia Second-hand Dealer License Guide
This guide covers the Second-hand Dealers Act 1946 and the specific steps required by the Royal Malaysia Police (PDRM).
How to Get a Second-hand Dealers License in Malaysia (2026 Guide)
Are you looking to start a business trading in used goods, scrap metal, or pre-owned vehicles? In Malaysia, this isn't just a matter of registering a company; you must comply with the Second-hand Dealers Act 1946 (Act 189). Operating without a valid license can lead to heavy fines or imprisonment.
This guide breaks down everything you need to know about the application process, requirements, and legal obligations.
1. Do You Need a Second-hand Dealers License?
Under Malaysian law, any person dealing in "second-hand goods" must be licensed. This typically includes:
Recycling & Scrap Metal: Copper, aluminum, and scrap iron dealers.
Used Motor Vehicles: Dealers of cars, motorcycles, and spare parts.
Electronic Goods: Used smartphones, laptops, and hardware.
Jewelry & Antiques: High-value pre-owned items.
Key Rule: Under Section 6 of Act 189, no person shall deal in second-hand goods except in accordance with a license issued by the Licensing Officer (usually the District Police Chief).
2. Eligibility & Pre-requisites
Before applying, ensure your business meets these foundational requirements:
SSM Registration: Your business must be registered with the Companies Commission of Malaysia (SSM) as an Enterprise or Sdn Bhd.
Clean Criminal Record: The applicant must have no history of criminal offenses involving theft or dishonesty.
Premises Approval: You must have a physical shop or yard. Mobile-only "dealers" are generally not permitted for this specific license.
Local Council License: You must obtain a Business Premise & Signboard License from your local authority (e.g., DBKL, MBPJ, MBAJ).
3. Step-by-Step Application Process
The application is primarily handled by the Royal Malaysia Police (PDRM) at the District Police Headquarters (IPD) where your business is located.
Step 1: Document Preparation
Prepare a folder with the following:
Copy of SSM documents (Form 9, 24, 49 or Business Profile).
Copy of the IC (Identification Card) of all directors/owners.
Tenancy Agreement or Sale & Purchase Agreement for the premises.
Two passport-sized photos of the applicant.
Floor plan and location map of the business premises.
Step 2: Fingerprinting
Unique to this license, the applicant must have their fingerprints taken at the police station. This is a mandatory security screening to ensure the dealer is not involved in the trade of stolen property.
Step 3: Submission and Inspection
Submit your application form and fees (which vary slightly by state but are generally nominal). Once submitted, police officers will typically visit your premises to verify the nature of your storage and security measures.
Step 4: Approval and Issuance
If approved, your license is valid until 31st December of the current year. You must renew it annually.
4. Operational Requirements (To Stay Legal)
Once you have your license, you are legally bound to:
Maintain a Transaction Book: You must record every item bought or sold, including the seller's name, IC number, address, and the price paid.
Report Stolen Goods: If you suspect someone is trying to sell you stolen property, you are legally required to report it to the police immediately.
The Signboard Rule: You must display a signboard at your entrance stating "Licensed Dealer in Second-hand Goods" in Bahasa Melayu and English (and optionally other languages).
5. Frequently Asked Questions
Q: How much is the Second-hand Dealers license fee in Malaysia? The fee is prescribed by the local licensing officer but usually ranges between RM 100 to RM 500 per year depending on the type of goods.
Q: Can a foreigner apply for this license? Generally, this license is reserved for Malaysian citizens or Malaysian-owned companies. Foreign-owned companies (WRT) may face stricter requirements and must have a minimum paid-up capital of RM 1 million.
Q: What happens if I trade without a license? Under Section 9 of the Act, first-time offenders can be fined up to RM 1,000 or face 3 months imprisonment. Subsequent offenses carry much heavier penalties.
Start Your Business the Right Way
Navigating police permits and local council laws can be daunting. If you want to ensure your application is approved the first time:
Consult a License Specialist: Professionals can handle the PDRM and SSM paperwork for you.
Check Local Zoning: Ensure your shop lot is zoned for "trading" or "industrial" use before signing a lease.
Drafting the formal Letter of Intent (Intention Letter) required for your police application
Below is a professional template for the Letter of Intent (Surat Hasrat) required for your application to the Royal Malaysia Police (PDRM).
In Malaysia, this letter is typically written in Bahasa Melayu, as it is addressed to the District Police Chief (Ketua Polis Daerah). The Malay version and a translation for your reference have bee provided.
Letter of Intent Template (Malay Version)
[Nama Syarikat / Nama Pemohon] [Alamat Premis Perniagaan] [No. Telefon & Emel]
Tarikh: [Tarikh Hari Ini]
Ketua Polis Daerah Ibu Pejabat Polis Daerah (IPD) [Nama Daerah, contoh: Dang Wangi] [Alamat IPD] [Poskod, Negeri]
Tuan,
PER: PERMOHONAN LESEN PENIAGA BARANGAN LUSUH / SEKENDHEND DI BAWAH AKTA PENIAGA SEKENDHEND 1946 (AKTA 189)
Merujuk kepada perkara di atas, saya [Nama Anda], No. Kad Pengenalan [No. IC Anda], selaku [Jawatan, contoh: Pengarah] bagi syarikat [Nama Syarikat], ingin memohon lesen peniaga barangan lusuh bagi premis kami yang terletak di:
[Alamat Lengkap Premis Perniagaan]
Untuk makluman pihak Tuan, perniagaan kami akan memfokuskan kepada urus niaga barangan terpakai seperti [Sebutkan jenis barang, contoh: besi buruk, kertas, plastik, atau alat ganti kenderaan].
Kami berjanji akan mematuhi segala peraturan dan syarat-syarat yang ditetapkan di bawah Akta Peniaga Sekendhend 1946, termasuk:
Menyenggara Buku Rekod Transaksi (Buku Pol. 292) dengan lengkap dan teratur.
Memastikan premis sentiasa dalam keadaan bersih dan selamat.
Memberi kerjasama penuh kepada pihak PDRM sekiranya terdapat barangan yang mencurigakan.
Bersama-sama surat ini, saya lampirkan dokumen sokongan seperti salinan pendaftaran SSM, pelan lokasi, dan salinan kad pengenalan untuk tindakan pihak Tuan selanjutnya.
Besarlah harapan kami agar permohonan ini mendapat pertimbangan yang sewajarnya daripada pihak Tuan.
Sekian, terima kasih.
Yang benar,
(Tandatangan)
[Nama Penuh Anda] [Jawatan] [Cop Syarikat]
English Translation (For Reference Only)
Subject: Application for Second-hand Dealers License Under the Second-hand Dealers Act 1946 (Act 189)I, [Your Name], representing [Company Name], wish to apply for a second-hand dealer's license for our premises at [Address]. Our business will focus on [List items, e.g., scrap metal]. We pledge to comply with all regulations, including maintaining proper transaction logs and cooperating with PDRM on suspicious goods. Attached are the SSM documents and floor plans for your review.
Next Steps for You:
Print on Letterhead: If you have a company letterhead, print the Malay version on it.
Attach Form Pol. 292: You will need to attach this letter to the official Pol. 292 form (available at the IPD).
Prepare for Fingerprinting: When you submit this, the police will likely schedule a time for your fingerprinting session.
Checklist of the specific SSM documents (e.g., Form 9, 24, 49) you need to bring along with this letter
A checklist for your Second-hand Dealer License application in Malaysia with all the necessary SSM and supporting documents.
Checklist for Second-hand Dealer License Malaysia
Here is the list of items you'll need to prepare:
SSM Business Profile (latest printout)
SSM Form 9 (Certificate of Incorporation) or Section 17
SSM Form 24 (Return of Allotment of Shares) or Section 78
SSM Form 44 (Registered Office Address) or Section 46
SSM Form 49 (Details of Directors/Secretaries) or Section 58
Copy of IC / Passport for all Directors
Tenancy Agreement or S&P for business premises
Local Council (PBT) Business License copy
Floor plan of the premises
Two passport-sized photos of the applicant
Letter of Intent (Surat Hasrat) signed and chopped
Ensure all copies are clear and, if possible, certified true copies (CTC) to avoid any delays at the police headquarters. Good luck with your application!
How Bestar Malaysia can Help
To successfully obtain a Second-hand Dealers License in Malaysia, precision in documentation and timing is everything. Bestar Malaysia serves as a specialized advisory firm that bridges the gap between your business and the regulatory authorities (PDRM).
Here is how Bestar optimizes your licensing journey:
How Bestar Malaysia Accelerates Your License Approval
1. End-to-End SSM Compliance
Before you can even approach the police (PDRM) for a second-hand dealer license, your company structure must be flawless. Bestar handles:
Rapid Company Incorporation: Setting up your Sdn Bhd or Enterprise with the correct business nature (MSIC codes) specifically for used goods.
Corporate Secretarial Services: Certifying the essential forms (Form 9, 24, 49) required by the police. PDRM often rejects applications if these documents are not officially certified by a licensed Company Secretary.
2. Expert "Surat Hasrat" (Letter of Intent) Preparation
The Letter of Intent is the most scrutinized document in your application. Bestar crafts professional, Malay-language Surat Hasrat that:
Clearly defines your business scope to satisfy PDRM safety requirements.
Demonstrates your commitment to the Second-hand Dealers Act 1946.
3. Regulatory Liaison & PDRM Coordination
Navigating the District Police Headquarters (IPD) can be time-consuming. Bestar assists by:
Pre-submission Audit: Reviewing your floor plans and tenancy agreements to ensure they meet the security standards (e.g., storage safety and CCTV requirements) that police officers look for during inspections.
Process Guidance: Guiding you through the mandatory fingerprinting and background check process to ensure your "Buku Pol. 292" (Transaction Book) is ready for use upon approval.
4. Local Council (PBT) Alignment
A Second-hand Dealers license is only valid if you also have a Premise & Signboard License from your local council (like DBKL, MBPJ, or MBSA). Bestar provides a "One-Stop" service to synchronize these applications so you don't face a "chicken-and-egg" situation where one authority waits for the other.
Why Choose Bestar?
Feature | Self-Application | With Bestar Malaysia |
Success Rate | Variable (Risk of rejection due to document errors) | High (Expert-vetted documentation) |
Timeline | 3–6 months of back-and-forth | Streamlined (Optimized workflow) |
Compliance | DIY research on Act 189 | Automatic (In-house legal/secretarial expertise) |
Effort | Frequent visits to SSM, PBT, and IPD | Minimal (Bestar handles the heavy lifting) |
Future-Proofing Your Business
Beyond just getting the license, Bestar ensures you stay legal with:
Annual License Renewals: Proactive reminders before the Dec 31st expiry.
Tax & Audit Support: specialized accounting for the scrap/used goods industry, which often deals in high-volume cash transactions.
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