Do You Need a Business License For an Online Store In Malaysia?
E-commerce in Malaysia is booming, with platforms like Shopee, Lazada, and TikTok Shop making it easier than ever to start selling online. Many Malaysians, from home bakers to full-fledged e-commerce brands, are now venturing into the digital marketplace.
But one common question remains: do you need a business license for an online store in Malaysia?
The short answer is yes. Regardless of whether you sell through social media, e-commerce marketplaces, or your own website, you are required to register your business and, in some cases, obtain additional licenses. This ensures your operations are legal, trustworthy, and compliant with Malaysian laws.
A lot of people are interested in starting an online store in Malaysia, especially due to the coronavirus pandemic. However, there is a lot of confusion when it comes to registering an online business in Malaysia.
This post aims to give you all of the important information about starting an online store in Malaysia and the main steps you have to follow to start an online store.
Do you Need an E-Commerce License?
Whenever you start a business in Malaysia, you will have to register it with SSM. Therefore, you will need a business license to start an online store in Malaysia. Otherwise, your business will be considered illegal. As a result, you will have to pay a large number of fines.
Whether you are running a full-fledged e-commerce business or selling some services online, you will have to register your business. Keep reading to learn how you can start an online business in Malaysia.
Why an Online Store Still Needs a Business License
Running an online business doesn’t exempt you from Malaysia’s business regulations. Here’s why a license matters:
It’s a legal requirement
The Companies Commission of Malaysia (SSM) mandates that all businesses, including online stores, must be registered.
It builds credibility
Customers, suppliers, and platforms like Shopee and Lazada trust businesses that are officially registered.
It ensures tax compliance
Proper licensing allows you to keep accurate records and stay compliant with income tax and, where applicable, SST (Sales & Service Tax).
It supports growth
A registered business can open corporate bank accounts, apply for financing, and expand legally without restrictions.
Step-by-Step: How to Register Your Online Store in Malaysia
1. Decide on your business structure
Enterprise (sole proprietorship/partnership) or Sdn. Bhd.
2. Register with CCM / SSM
You will have to decide on a unique business name to register your company with CCM (Companies Commission of Malaysia) or better known as SSM (Suruhanjaya Syarikat Malaysia) among Malaysians. Moreover, you will also have to choose a suitable type of company like Sdn Bhd, Sole Proprietorship, or Limited Company to register your business.
You can do this online via the MyCoID Portal.
3. Establish Online Store
- First of all, you will need a unique and attractive domain name for your business. It is quite easy to buy a domain through a hosting platform, or you can ask your web developer to do it for you.
- The second step is to choose a suitable company to host your website. Some of the factors to consider in this step are the total storage capacity, cybersecurity, and the time it takes to set up the servers.
- The owner of an online store will also have to focus on designing a user-friendly website that can easily reach a wide audience and sell products.
- A variety of other aspects have to be considered to establish a successful online store, such as providing different payment and shipping options to cater to a large base of customers.
4. Apply for a local council license
Submit your application to DBKL, MBPJ, MBSA, or the local authority where your business operates.
5. Check industry-specific requirements
Apply for MOH, NPRA, MOF, or BNM approvals if your products/services require them.
6. Register with Inland Revenue Board - Update your records
The last step of the Malaysia company registration process is to register and declare your income with the Inland Revenue Board of Malaysia. You can easily do it by following the rules and regulations of the Board. You can also hire accounting services to get through this process.
Open a business bank account, prepare invoices, and keep accounting records for compliance.
Tip: Registering as a Sdn. Bhd. gives your business more credibility with customers, suppliers, and investors.
Business License Requirements for Online Stores in Malaysia
Depending on your business model, different licenses and registrations may apply.
1. SSM Registration (Compulsory)
All online sellers must register their business with SSM. You can choose between:
- Sole Proprietorship or Partnership (Enterprise) — Suitable for small sellers or individuals starting out.
- Private Limited Company (Sdn. Bhd.) — Recommended for businesses planning to scale and operate professionally.
Without this step, your business is considered illegal under Malaysian law.
2. Local Council Business Premise License
Even if your store operates online, you are still subject to local council regulations (e.g., DBKL, MBPJ, MBSA). Most councils require an e-commerce seller to apply for a business premise license, even if the business is home-based.
This applies to:
Home bakers selling via Instagram or Facebook.
Dropshipping businesses.
Service providers such as tutors, designers, and consultants.
3. Industry-Specific Licenses
Some industries require additional approvals:
Food & Beverage → Ministry of Health (MOH) permits.
Healthcare & Supplements → National Pharmaceutical Regulatory Agency (NPRA) license.
Financial or Investment Services → Ministry of Finance (MOF) or Bank Negara Malaysia (BNM) approval.
If your products fall under these categories, you must secure the proper permits before selling.
What Happens If You Don’t Register Your Online Business?
Many entrepreneurs assume that because they sell from home or on social media, registration isn’t necessary.
Unfortunately, this can lead to serious issues:
- ⚠️ Fines and penalties — SSM can impose penalties for unregistered businesses.
- ⚠️ Banking limitations — Without registration, you cannot open a business bank account.
- ⚠️ No legal protection — Unregistered businesses cannot enforce contracts in court.
- ⚠️ Risk of suspension — Platforms like Shopee, Lazada, and TikTok Shop may suspend your account if you fail to provide valid registration documents.
Takeaways
This is certainly the best time to start an online store in Malaysia because the e-commerce industry is rapidly growing. If you choose to establish your business now, you are likely to reach a larger audience and market your products and services.
Even if you have an existing store, you should consider expanding your reach with online platforms and starting an online store. The good thing is that the entire Malaysia company registration process is quite easy. You can easily complete it step by step.
- If your business is related to the telecommunication industry, you will have to register with MMC.
- Register with CCM.
- You will need a unique domain name, an account on a hosting platform, and a website to run an online business.
- You will have to register and declare your income with the Inland Revenue Board of Malaysia. Professional accounting services can also help you out in this process.
FAQs on Business License for Online Store in Malaysia
Yes. All sellers must be registered with SSM, even if they only sell on e-commerce platforms.
No. Even home businesses must register with SSM and, in some cases, obtain a local council license.
Sole proprietorship: From RM30 per year.
Partnership: From RM60 per year.
Sdn. Bhd.: From RM1,000+ (depending on professional fees).
Yes. Any business that sells products or services online must be registered.
SSM registration: 1–3 working days.
Local council license: 1–4 weeks depending on the council.
How ShineWing TY TEOH Can Help Your Online Business
Navigating licensing requirements can feel overwhelming, especially for first-time entrepreneurs.
At ShineWing TY TEOH, we support online businesses by:
Advising on the best business structure (enterprise vs. Sdn. Bhd.).
Handling SSM registration and local council license applications.
Ensuring tax compliance and proper accounting for e-commerce.
Guiding long-term growth with professional advisory services.
Contact us today to ensure your online store complies with all legal requirements and is set up for success.
In a Nutshell
Once you register your online business, all you have to do is focus on marketing your company by targeting various social media platforms and choosing a specific audience for your business.
If you are new in the business world, you can get help from accounting services in Malaysia to ensure you are making the best financial decisions for both the short and long-term success of your business.
For more information, feel free to get in touch with us.
