Open a Travel Agency in Malaysia

Updated on Thursday 28th March 2019

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Those who are interested in setting up a company in Asia in the field of tourism can choose Malaysia as it offers very good conditions in this sense, due to a large number of tourists attracted to its sightseeing locations and tourist packages. As such, it is advisable to open a travel agency here, following the general incorporation procedure available for companies operating in other business fields.

The Malaysian government has liberalized in the last years many of its rules referring to foreign investments, but it is recommended to receive assistance from our team of company incorporation representatives in Malaysia in order to verify if there are special conditions for this field. Our representatives can assist with in-depth information on any type of business permit that can be required for this business activity. 

How can one register a company in Malaysia?

Malaysia has become a more liberalized market, allowing foreign ownership, under several conditions (for example, only a part of the business fields available here allow the incorporation of a company with 100% foreign ownership). Our team of specialists in company formation in Malaysia can provide assistance on the legislation concerning the registration of a local business by foreign investors.

The video below provides a short description on the procedures applicable when setting up a travel agency in Malaysia:

The registration process begins at the Companies Commission, the main institution regulating the activity of companies with operations on this market. There are few legal entities available for incorporation for foreigners and, as a general rule, the local legislation requires that each new company registered here to have two directors who are currently living in Malaysia. They can only be appointed if they are at least 18 years old. 

It is necessary to receive the assistance of a specialist with a legal background for drafting the company’s statutory documents. Our team of company incorporation consultants in Malaysia can assist in other steps of the process, such as the registration for tax purposes or opening a bank account for the newly-formed business. 

Licenses for businesses in the tourism industry in Malaysia  

Almost all of the companies registered in Malaysia require the issuance of a business permit, which is established in accordance with the business field in which the company operates. Companies set up in the tourism industry in Malaysia will need several business permits, issued by the local town council. It is important to know that the investor is required to apply for the following permits: the inbound ticketing license, the outbound ticketing license and the car rental license (for businesses which offer this type of service). 

What institution regulates Malaysian travel agencies? 

Local or foreign businessmen who want to open a company in Malaysia as a travel agency or as a tour operator must know that the main institution which regulates the activity of any business set up with the purpose of providing tourism services is the Ministry of Tourism and Culture. The institution is in charge with implementing the provisions of the rules of law addressed to the tourism sector, which are represented by the Tourism Industry Act and the Tourism Vehicles Licensing Act, to name a few. Investors must know that the following regulations also apply to this sector (the year next to each legislation refers to the moment when each law was adopted): 
  • Tourism Industry (Tour Operating Business and Travel Agency Business) Regulations 1992;
  • Tourism Industry (Licensing and Control of Tourist Guides) Regulations 1992;
  • Tourism Vehicles (Licensing and Control of Tourism Vehicles) Regulations 2000;
  • Tourism Industry (Licensing of Tourism Training Institutions) Regulations 1994

Which are the main documents necessary for opening a travel agency in Malaysia? 

When opening a travel agency in Malaysia, it is necessary to submit a set of company documents and specific forms required by the local institutions. Due to the fact that this process implies the submission of a wide set of documents, we highly advise investors to request for legal assistance in preparing such documents from our team of consultants in company formation in Malaysia
The number of documents will also depend based on the types of licenses needed by the travel agency set up in Malaysia. For example, provided that the investors have applied for an outbound license, it will be necessary to submit a letter of business cooperation with a specific foreign tourism travel agency. At the same time, when applying for this license, the company’s representatives also have to offer a list of the tour packages that will be used by the company for its clients (this is also necessary when applying for a inbound license). 
In the case of foreign companies or for those with foreign shareholders, it is legally required to provide a business plan, an estimated number of tourists that is expected to use the services of the travel agency, as well as an estimate on the revenue of the company. 
Besides the above mentioned documents, other documents have to be submitted. In the case of a company with foreign ownership, one of the required papers for company formation in Malaysia as a travel agency is the certificate of registration of the respective legal entity (a copied document). This document needs to be verified by the Malaysia Tourism Promotion Board. Other compulsory documents are the following: 
  • the company’s statutory documents (the articles of association and the memorandum);
  • the identity documents of the company’s representatives (in the case of foreign persons, the passports are necessary); 
  • information on the company’s directors and shareholders and, if applicable, data of other companies in which they hold the same functions;
  • Form 44 – Notice of Situation of Registered Office and Office Hours. 

What forms are necessary when applying for tourism licenses in Malaysia? 

As presented above, a business registered in Malaysia as a travel agency will need to obtain specific business licenses. These documents can be obtained by completing specific forms, which will also incur the payment of a small fee. For example, businessmen must fill in the Form 1 – Application for License to Carry on or Operate a Tour Operating Business and Travel Agency Business, in which case, it is necessary to pay a fee of RM 100. 

If the company’s activities also include the transportation of the company’s clients by bus or by car, it is legally required to apply for further licenses, such as the New Application for Excursion Bus License or the New Application for Hire and Drive Car License. It is also necessary to know that a foreign travel agency performing tourism activities in Malaysia needs to apply for a license when entering this country by using an excursion bus.  

Investors who need further information on the incorporation of a travel agency in Malaysia or the business permits necessary for this activity can address to our team of company formation agents in MalaysiaOur representatives can also provide in-depth assistance on the main taxes applicable to a Malaysian travel agency, as well as on the accounting principles that must be respected when developing a business activity here.