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Setting up an Employment Agency in Malaysia



Setting up an Employment Agency in Malaysia


Setting up an employment agency in Malaysia involves obtaining the necessary licenses, registering your business, and complying with various regulations. Here's a step-by-step guide to setting up an employment agency in Malaysia:


1. Obtain the necessary licenses:

  • Registration with the Companies Commission of Malaysia (SSM): You'll need to register your employment agency as a Private Limited Company or a Sole Proprietorship with the SSM.

  • Employer’s License: Apply for an Employer's License from the Ministry of Human Resources (MOHR). This license is required for all employment agencies operating in Malaysia.

  • Work Permit License: If you plan to place foreign workers with Malaysian employers, you'll need to obtain a Work Permit License from the MOHR.

2. Register your business name:

  • Trade Name Registration: Register your employment agency's trade name with the Registrar of Trade Marks. This will protect your business name from being used by others.

  • Business Premises Registration: Register your employment agency's business premises with the Local Authority where your office is located.

3. Comply with various regulations:

  • Labour Laws Compliance: Adhere to all applicable labour laws and regulations in Malaysia, including minimum wage requirements, working hours, and employment termination procedures.

  • Data Protection Compliance: Comply with the Personal Data Protection Act (PDPA) to protect the personal data of job seekers and employers.

  • Tax Compliance: Register for relevant taxes, such as Goods and Services Tax (GST) and Income Tax, and file your tax returns on time.

4. Develop your business strategy:

  • Define your target market: Identify the specific industries, job roles, or geographic areas where you want to focus your recruitment services.

  • Establish your fee structure: Determine your fees for placing job seekers with employers, considering the complexity of the recruitment process and the value you provide.

  • Marketing and promotion: Develop a marketing plan to reach your target audience and promote your employment agency. This could include online advertising, networking events, and partnerships with companies or organizations.

5. Obtain insurance coverage:

  • Employers' Liability Insurance: Protect your business from potential liabilities arising from accidents or injuries sustained by job seekers or employees during recruitment activities.

  • Professional Indemnity Insurance: Cover your legal liabilities in case of any professional errors or omissions in your recruitment services.

6. Stay updated on regulations and industry trends:

  • Regularly monitor changes in labour laws, regulations, and industry trends to ensure your business remains compliant and competitive.

  • Attend industry events, conferences, and seminars to network with other employment agencies, job seekers, and employers.

7. Seek professional guidance:

  • Consult with experienced lawyers, accountants, and recruitment professionals to ensure you're complying with all legal and regulatory requirements.

  • Consider partnering with a recruitment software provider to streamline your operations, manage candidate data, and track recruitment performance.

Remember, setting up and running a successful employment agency requires dedication, expertise, and continuous adaptation to the dynamic Malaysian employment landscape.


Application of Licence for Private Employment Agency


To apply for a licence to operate as a private employment agency in Malaysia, you will need to submit the following documents to the Ministry of Human Resources (MOHR):

  • Application Form for Private Employment Agency Licence (MOHR Form PM01)

  • Registration Certificate of Business Entity

  • Certificate of Incorporation (for limited companies)

  • Certificate of Business Operation (for sole proprietorships and partnerships)

  • Passport copy of the applicant (if applicable)

  • Copy of the applicant's professional qualification (if applicable)

  • Proof of physical office premises (e.g., tenancy agreement)

  • Paid-up capital confirmation letter from the applicant's bank

  • Proof of financial standing (e.g., audited financial statements)

  • Declaration of Non-Debt (MOHR Form PM02)

  • Declaration of No Criminal Record (MOHR Form PM03)

In addition to these documents, you may also be required to provide additional documentation depending on the specific type of employment agency you are operating. For example, if you are operating a recruitment agency, you will need to provide evidence that you have access to a pool of suitable candidates. If you are operating a placement agency, you will need to provide evidence that you have a network of potential employers.


Once you have submitted all of the required documents, the MOHR will review your application and make a decision on whether or not to grant you a licence. The decision process typically takes around 60 days. If your application is approved, you will be issued a licence with a validity period of 3 years.


To maintain your licence, you will need to renew it every 3 years. To do so, you will need to submit the following documents to the MOHR:

  • Renewal Application Form for Private Employment Agency Licence (MOHR Form PM04)

  • Current licence

  • Proof of paid-up capital

  • Proof of financial standing (e.g., audited financial statements)

  • Declaration of Non-Debt (MOHR Form PM02)

  • Declaration of No Criminal Record (MOHR Form PM03)

The fees for applying for and renewing a private employment agency licence are as follows:

  • Application fee: RM1,000

  • Renewal fee: RM800

For more information on how to apply for a licence to operate as a private employment agency in Malaysia, please visit the website of the Ministry of Human Resources (MOHR).


How Bestar can Help


Establishing a Private Employment Agency in Malaysia involves a comprehensive process that demands thorough understanding of the legal requirements and compliance procedures. Bestar, a prominent corporate service provider in Malaysia, can assist individuals and organizations seeking to establish a private employment agency in Malaysia.


Bestar's expertise in company registration, HR solutions, and regulatory compliance empowers us to guide you through the intricate procedures of setting up a private employment agency in Malaysia. We can assist you in:

  1. Filing the necessary documentation: Bestar's experienced consultants can assist you in preparing and submitting the required documents to the Ministry of Human Resources (MOHR) for the licensing process. This includes the Application Form for Private Employment Agency Licence (MOHR Form PM01), Registration Certificate of Business Entity, Certificate of Incorporation/Certificate of Business Operation, passport copy of the applicant, professional qualification if applicable, proof of physical office premises, paid-up capital confirmation letter from the applicant's bank, proof of financial standing, Non-Debt Declaration (MOHR Form PM02), and Declaration of No Criminal Record (MOHR Form PM03).

  2. Professional guidance and compliance: Bestar's HR experts can provide comprehensive advice on Malaysian employment laws and regulations applicable to private employment agencies. We can ensure that your operations adhere to the strict guidelines set by the MOHR, preventing potential legal issues and safeguarding your business's integrity.

  3. Business incorporation: Bestar can assist you in incorporating your employment agency as a Private Limited Company (Sdn Bhd). This involves registering your company with the Companies Commission of Malaysia (SSM) and obtaining the necessary approvals and permits.

  4. HR outsourcing and payroll management: Bestar can manage your HR functions and payroll processing, taking care of administrative tasks such as employee onboarding, documentation, tax filing, and salary processing. This can free up your time and resources to focus on core business activities.

  5. Visa and permit assistance: Bestar can assist you in obtaining the necessary work permits and visas for foreign workers employed by your agency. They can navigate the complex visa and permit regulations to ensure a smooth onboarding process for international personnel.

By leveraging Bestar's expertise and comprehensive support services, you can establish a successful private employment agency in Malaysia, navigating the intricate legal and administrative requirements with confidence and ensuring compliance throughout your operations. Our expert guidance and tailored solutions can help you achieve your business objectives and contribute to the dynamic Malaysian employment landscape.


Contact Bestar today!


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