Quick answer
Under the Industrial Co-ordination Act 1975, a manufacturing company with shareholders' funds below RM2.5 million and fewer than 75 full-time paid employees does not need a manufacturing licence, but may apply to MIDA for an exemption. The exemption letter is often requested by banks, local councils, customs and other agencies as proof the factory is properly regulated.
Last reviewed： · Reviewed by：ONEKEY BIZ compliance team
01
Overview
Manufacturing in Malaysia is coordinated under the Industrial Co-ordination Act 1975 (ICA). The Act decides which manufacturers must be licensed, and MIDA — the government's investment agency under MITI — processes the applications.
The dividing line is size. A company with shareholders' funds under RM2.5 million and fewer than 75 full-time paid employees falls below the licensing threshold. It does not need a manufacturing licence, but it can apply for a formal exemption — and in practice many agencies expect to see either a licence or an exemption letter before granting their own approvals.
The exemption also clarifies the company's position for the future. If shareholders' funds or headcount grow past the threshold, the company will need to convert to a full manufacturing licence — we flag the numbers to watch.
Who needs this
- Small and medium factories below the ICA thresholds
- Manufacturers asked by a bank or council for proof of MIDA status
- New factories starting below RM2.5 million funds
02
Documents you need to prepare
Company
- SSM company profile and constitution
- Latest audited financial statements (to compute shareholders' funds)
- Shareholding structure
Project
- Products to be manufactured and production process
- Factory location, tenancy or title
- Machinery list and production capacity
People
- Current and planned full-time employee numbers
- Shareholders' funds include retained profits, not only paid-up capital.
- Other approvals — local council, DOSH, DOE — may still be required for the factory.
03
How to get it done with ONEKEY BIZ
- 1Threshold test Week 1
Shareholders' funds and headcount assessed against ICA.
- 2Project file Week 1–3
Products, process, machinery and location documented.
- 3Submit to MIDA Week 3–4
Exemption application submitted.
- 4MIDA / MITI review Per MIDA
Queries answered until decision.
- 5Exemption letter Done
Exemption letter issued.
You do
- Provide accounts and project details
- Confirm products and capacity
We do
- Test the ICA thresholds
- Prepare the application file
- Submit to MIDA and follow up
- Flag other factory approvals needed
04
What you receive
Formal exemption from the manufacturing licence.
The shareholders' funds and headcount that would trigger a licence later.
Official sources
Frequently asked questions
Is the exemption compulsory?
Below the thresholds a licence is not required, but the exemption letter is commonly requested by other agencies.
What if we grow?
Crossing RM2.5 million funds or 75 employees means applying for a full licence.
Does it replace a council licence?
No. Council, DOSH and DOE approvals are separate.