CHAPTER 07:

BUSINESS REGULATIONS & SUPPORT

SYSTEM

Dr. Azizan Abdullah

Azlin Shafinaz Mohamad Arshad
Siti Zahrah Buyong
Zarina Abdul Munir
Introduction: Business Regulations

▪ It refers to the law/rules prescribed by authority that manages

business organisations – to ensure businesses are conducted
in the right manner and ethically and is part of the control
mechanism by the government.

▪ It is important for the entrepreneurs to know and understand

business regulations before starting up a business to prevent
any problem in the future.

▪ It can be categorized into three categories:

1. Approval and Licensing
2. Employment Policies and Legislations
3. Taxation
1. Approval and Licensing

• Entrepreneurs needs to identify the agencies that are

involved, the required documents and types of licensing
before starting a business.

• These agencies may include local authorities, ministries,

departments or government agencies.

• The businesses are regulated to obtain a license depending

on the types of businesses involved.
 License and Permit for Selected Business

MANUFACTURING RESTAURANT NURSERY CONSTRUCTION

Manufacturing License Trade License Trade License Construction license

No Objection Letter for Approval Certificate of Approval Certificate of Green Card from
the location of the Food Handling attendance from Construction Industry
project Persatuan Tadika Development Board
Malaysia (CIDB)
Approval for Planning TY2 (Typhoid) Injection Approval for business Technical Certificate
Permission for Owners and Workers operation from from Higher Institution
Department of Education
Approval for Building Approval from Fire and Approval for business Letter of Acceptance
Permission Rescue Department of operations from Jabatan for Tender
Malaysia (BOMBA) Kebajikan Masyarakat
Approval for Certificate Certificate of Certificate of Food Approval of Equipment
of Fitness Registration for Food Handling Rental
Premise from Regional
Health Department
Approval for Business TY2 (Typhoid) Injection Approval for Business
Related Licenses for Owners and Workers Related Licenses
Approval for Approval for
Environmental Control Environmental Control
Approval for Safety and Approval for Safety and
Health Health
2. Employment Policies and Legislations

• The regulations that are important to the employment

provided by the Labour Department:

• Employment Act 1955 (Amendment 2022)

• Employees’ Provident Fund
• Social Security Organisation
• Occupational Safety and Health
• Employment of Foreign Workers
EMPLOYMENT POLICIES & SERVICES OFFERED
LEGISLATIONS
Provides minimum standards on working hours and overtime, weekly
Employment Act 1955 rest day, public holidays, annual and sick leaves, maternity benefits,
termination and lay off benefits, etc.
Employees’ Provident Fund Provides retirement benefits for members through management of their
(EPF) OR Kumpulan Wang savings in an efficient and reliable manner. All employers must register
Simpanan Pekerja (KWSP) their employees with EPF immediately upon employment.
Administers the Employment Injury Insurance Scheme and Invalidity
Social Security Organization Pension Scheme provided under the Employees’ Social Security Act
(SOCSO) OR 1969.
Pertubuhan Keselamatan The scheme is compulsory and employer must cover all employees
Sosial (PERKESO) under SOCSO/PERKESO even if they are covered under other
insurance policies. The insurance covers employees in any event which
leads to disablement or death during employment (cash benefits and
medical care)
Provides legislative framework to promote, stimulate and encourage
Department of Occupational high standards of safety and health at work.
Safety & Health (DOSH) The AIM is to promote safety and health awareness, establish effective
safety organization and performance through self-regulation schemes
designed to suit the particular industry or organization.
Employment of Foreign Foreign workers are allowed to work in Malaysia in certain industries
Workers (EXCLUDE such as construction, plantation, service servants, hotel industry,
expatriates under the trainers and instructors and manufacturing sectors (Bangladesh,
management, professional and Indonesia, Pakistan, Philippines and Thailand).
technical/supervisory It is under Ministry of Home Affairs. Employment of foreign workers will
categories) only be considered when efforts in finding qualified local citizens and
permanent residents have failed.
3. Taxation

• It refers to the practice of a government collecting money

from its citizens based on their earnings and property to pay
for public services (build and maintain roads, public library
etc.)

• There are taxation requirements that need to be complied

and considered by the entrepreneurs:

• Company tax
• Personal tax
• Sales tax
• Service tax
Introduction: Business Support System
– Business support system refers to the assistance and
services provided by the government, ministries or
private agencies to help entrepreneurs to start a new
business or to develop an existing one (monetary and
non-monetary).

– The followings are the business support services and

assistance provided to the entrepreneurs:

1. Financial Support Services

2. Marketing Support Services
3. Information, Advisory and Extension Support
4. Research and Development Support
5. Technical and Technological Support
6. Entrepreneurs and Management Training
7. Infrastructure Support
1. Financial Support Services

- given by private or public financial institutions to assist an

entrepreneur to purchase factory’s site, office equipment, machinery
and also as a start-up capital.

AGENCY SERVICES OFFERED

Tabung Ekonomi Kumpulan Provides assistance in the form of financing schemes such as
Usaha Niaga (TEKUN) small loan and medium loan scheme
Perbadanan Usahawan Provides various entrepreneurs schemes for entrepreneurs
Nasional Berhad (PUNB) who want to start a retail business
Commercial Banks Provides financing for initial working capital or any other
related facilities (e.g., bank guarantee and bank draft)
Bank Pembangunan Provides financing to existing and new enterprises in support
Malaysia Berhad of development of high technology, infrastructure, maritime,
oil & gas sectors
Bank Pertanian Malaysia Provides financing to existing and new enterprises in support
Berhad (Agrobank) of development of agriculture industry such as micro
financing, working capital, term financing and strategic
alliance financing
2. Marketing Support Services

- these are the agencies that provide support services in marketing

and distribution throughout the country and overseas (training and
coaching under development programmes to boost export learning
and performances of SMEs.
AGENCY SERVICES OFFERED

Malaysian External Trade Informs entrepreneurs if there are any business opportunities
Development Corporation internationally
(MATRADE)
Ministry of International In charge of affairs related to foreign trade, high technology
Trade and Industry (MITI) and industrial location
Federal Agriculture Promotes agriculture products locally and abroad
Marketing Authority (FAMA)
3. Information, Advisory and Extension Support

- these bodies are involved in advising, consulting and monitoring the

business development. It is also to ensure the implementation of the
proposed projects.
AGENCY SERVICES OFFERED
Malaysian Palm Oil Board (MPOB) Responsible for promoting, developing and advancing
the country’s palm oil industry. It is also responsible
for providing scientific and technological leadership to
support the development of the palm oil industry
Department of Agriculture (DOA) Consultancy and follow up on entrepreneurial training
and development programme
Federal Agriculture Marketing Authority Promotes agriculture products locally and abroad
(FAMA)
Malaysian External Trade and Organises training programmes to improve the
Development Corporation (MATRADE) international marketing skills of Malaysian Exporters
Small and Medium Enterprise Provides business advisory through the “SME
Corporation Malaysia (SME Corp) Business Centre”. Also disseminate information on
government funds and incentives on SMEs
4. Research and Development Support

- these agencies help an entrepreneur to increase his/her efficiency,

technological achievement as well as to produce better quality
products so that he/she is able to compete in both local and
international markets.

AGENCY SERVICES OFFERED

Malaysian Palm Oil Board (MPOB) Develops quality products using the latest
technological advancement
Malaysian Agricultural Research and Carries out research on the output of agricultural
Development Institute (MARDI) products to improve quality
Standard and Industrial Research Adds values in developing new technologies to the
Institute of Malaysia (SIRIM Berhad) products
5. Technical and Technological Support

- these agencies provide educational courses to increase knowledge

in technical and technological areas in order to familiarise the latest
production methods, technological advancement and systematic
management.

AGENCY SERVICES OFFERED

Malaysian Institute of Microelectronic Promotes innovation in information technology
System (MIMOS)
Standard and Industrial Research Informs an entrepreneur if there are any new
Institute of Malaysia (SIRIM Berhad) machines or technology to help entrepreneurs to
compete better in terms of product quality and
innovation
Malaysian Agricultural Research and Develops indigenous/local science and technology
Development Institute (MARDI) capabilities in support of development and
modernisation of the national food and agriculture
sectors
6. Entrepreneurs and Management Training

- these agencies give exposure to entrepreneur in business

management issues and to inculcate/train entrepreneurial
characteristics (develop level of confidence, skills and motivation).

AGENCY SERVICES OFFERED

Majlis Amanah Rakyat (MARA) Provides training and guidance to entrepreneurs, for
e.g., soft skills and technical knowledge.
National Productivity Corporation (NPC) Provides development of human capital through
related training in building knowledge-based society
through partnership programmes.
Malaysian Academy of SME & Offers services such as training, education and
Entrepreneurship Development consultancy to entrepreneurs.
(MASMED)
Institut Keusahawanan Negara Provides related training, guidance, counselling and
(INSKEN) consultancy services to entrepreneurs to develop
knowledge and skills for existing and new
entrepreneurs.
7. Infrastructure Support

- these agencies assist in providing a strategic location with facilities

for the entrepreneurs to start their businesses.

AGENCY SERVICES OFFERED

Urban Development Authority Provides strategic location and help in guiding the
(UDA) entrepreneur in the form of premise especially for those
in the rural areas
Majlis Amanah Rakyat (MARA) Provides incubator programme for the agriculture and
manufacturing sector
Technology Park Malaysia (TPM) Provides Innovation Incubator Centre (IIC) to accelerate
(go faster) the growth of technopreneurs in renewable
energy, ICT, biotech and engineering industries
END OF CHAPTER 07