Exempted Letter is an alternative for those companies who don't meet requirements to
qualify for Miti Manufacturing License. SMI FUNDING Consultants assist fully in
processing and completing the requirements for it
Sample MITI License
The Calculation to get Miti manufacturing license
Projects must have Capital Investment Per Employee (CIPE) of at least RM140,000.00; and
Total full-time workforce of the company must comprise at least 80% Malaysians. Employment of foreign workers including outsourced workers is subjected to current policies; and
Total number of managerial, technical and supervisory levels (MTS) is at least 25% of total employment or having a value added (VA) of at least 40%.
Manufacturing license is a legal premise for a company to conduct manufacturing activities in Malaysia under the provision of the Industrial Coordination Act (ICA) 1975.
The ICA defines: “Manufacturing activity” as the making, altering, blending, ornamenting, finishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal; and includes the assembly of parts and ship repairing but shall not include any activity normally associated with retail or wholesale trade. “Shareholders’ funds” as the aggregate amount of a company’s paid-up capital, reserves, and balance of profit and loss appropriation account, where:
Paid-up capital shall be in respect of preference shares and ordinary shares and not including any amount in respect of bonus shares to the extent they were issued out of capital reserve created by revaluation of fixed assets.
Reserves shall be reserves other than any capital reserve created by revaluation of fixed assets and provisions for depreciation, renewals or replacements and diminution in value of assets.
"Full-time paid employees” as all persons normally working in the establishment for at least six hours a day and at least 20 days a month for 12 months during the year and who receive a salary.
The ICA requires manufacturing companies with shareholders’ funds of RM2.5 million and above or engaging 75 or more full-time paid employees to apply for a manufacturing licence for approval by the Ministry of International Trade and Industry (MITI). Applications for manufacturing licences are to be submitted to the Malaysian Investment Development Authority (MIDA), an agency under MITI in charge of the promotion and coordination of industrial development in Malaysia. Guidelines for Approval of Industrial Projects The government’s guidelines for approval of industrial projects in Malaysia are based on the following criteria:
Exemption Letter (Surat Dikecualikan)
A company that has less than 75 workers or paid-up capital/shareholder’s fund not exceeding RM2.5 million can apply for a confirmation letter by submitting an ICA 10 form to MIDA.
This can allow the company to be exempted from the manufacturing license approval. Once companies hit the threshold of paid-up capital/shareholder’s fund not exceeding RM2.5 million or have 75 or more workers, the company should immediately apply for a manufacturing license as the letter only indicates the company is exempted from the manufacturing license.
The function of Exemption letter is same with Miti Manufacturing License. Document needed for application of Manufacturing License / Exemption Letter
Valid Business License from Local Authority (Majlis Perbandaran)
SSM Company Profile
Latest Audited Report / Management Account
List of Machinery and Function
List of Raw Material, Quantity and Name of Supplier
List of Product, Quantity and Name of Customer
List of Manpower Divide into Management, Technical, Clerical, Admin and Factory Worker
Factory Layout Plan
Basic pre-requisites & benefits for Miti License
Manufacturing License was a license given for manufacturer that comply the conditions which is paid-up capital plus accumulate profit in above RM2.5Mil OR Full-time workers must be at least 75 peoples. Many of the companies not aware about it and also not fulfill the condition thus do not apply it. However, for those manufacturing that do not match the condition, can get the Exemption License of Manufacturing License where enjoying same benefit as Manufacturing License.
Nowadays, the application become stricter and the form was so think to fill up and it very easy to get rejected if form is not completely fill up.
Below is the benefit of getting a Manufacturing License OR Exemption Letter from Manufacturing License:-
Can apply for Duty Tax and Sales Tax Exemption for Raw Materials, equipment, machinery and spare parts that directly used in manufacturing;
Can apply the grant with Government and Statutory Body;