Starting a renovation company in Malaysia is an exciting venture, given the booming real estate and construction industry. However, establishing a successful business in this sector requires careful planning, compliance with legal requirements, and an understanding of the necessary permissions and clearances from government authorities. This article provides a detailed guide on how to form a renovation company in Malaysia, including the steps to register the business, obtain required permits, and navigate regulatory frameworks. Additionally, we address five frequently asked questions to clarify common concerns.

Step 1: Develop a Business Plan

Before diving into the legal and operational aspects, create a comprehensive business plan. This should outline your company’s vision, target market (e.g., residential, commercial, or both), services (e.g., home extensions, interior renovations, or factory refurbishments), pricing strategy, and financial projections. A well-structured plan helps attract investors and guides your operations. Consider Malaysia’s renovation market trends, such as demand for sustainable designs or budget-friendly refurbishments, to position your company competitively. Engaging with industry experts or platforms like Recommend.my can provide insights into customer preferences and contractor reliability.

Step 2: Register Your Business with SSM

In Malaysia, all businesses must be registered with the Companies Commission of Malaysia (SSM), also known as Suruhanjaya Syarikat Malaysia. This is a critical step to ensure your renovation company operates legally. Here’s how to proceed:

• Choose a Business Structure: Decide on a business entity, such as a sole proprietorship, partnership, or private limited company (Sdn. Bhd.). For a renovation company, a Sdn. Bhd. is often preferred due to its limited liability and professional image. You’ll need at least one director and shareholder, a registered business address, and a minimum paid-up capital of RM1.

• Select a Business Name: Choose a unique name that complies with SSM’s guidelines, avoiding prohibited or misleading words. Check name availability online via SSM’s EzBiz platform. For a trade name, submit Form PNA.42 or Form 13A for companies.

• Submit Required Documents: For a Sdn. Bhd., provide Form 13A (name availability), Form 6 (Declaration of Compliance), Form 48A (Director/Promoter Declaration), and the company’s Constitution. Appoint a company secretary, as required for companies. Sole proprietorships or partnerships require simpler forms, like Borang A.

• Pay Registration Fees: Fees vary by structure—RM30 for sole proprietorships using a personal name, RM60 for trade names, or higher for Sdn. Bhd. registrations. Upon approval, you’ll receive an SSM certificate, which serves as proof of your company’s legal status.

Registration must be completed within 30 days of business commencement. SSM’s certificate includes a unique number for tracking company details.

Step 3: Register with CIDB

The Construction Industry Development Board (CIDB) regulates construction and renovation activities in Malaysia under the CIDB Act 1994 (Act 520). All contractors, including those undertaking renovation work, must register with CIDB before starting projects, unless exempted under Section 40(1).

• Eligibility: Local or foreign contractors can register, but you must comply with CIDB’s requirements, such as holding a valid SSM registration and submitting project-related information within 14 days of contract awards.

• Application Process: Submit an application for a Perakuan Pendaftaran Kontraktor Tempatan (PPK) or other relevant certificates, depending on your company’s scope. Provide details like business registration, project capabilities, and compliance with Malaysian Standards (MS) for materials.

• Fees and Penalties: Registration fees vary by contractor grade and project size. Failure to register can result in fines ranging from RM10,000 to RM100,000, and CIDB may issue a stop-work order.

CIDB registration enhances your credibility and allows you to bid for government projects, which often require certified contractors.

Step 4: Obtain Necessary Permits and Clearances

Renovation work in Malaysia is subject to strict regulations under laws like the Street, Drainage and Building Act 1974 and Uniform Building By-Laws 1984 (UBBL 1984). Depending on the project scope, you’ll need various permits and approvals from local authorities (Pihak Berkuasa Tempatan, PBT) and other agencies.

• Renovation Permits: Most renovations, even minor ones, require a permit from the local authority. This includes internal layout changes, building extensions, wall demolitions, or changes in premise function (e.g., converting an office to a gym). Submit detailed plans, including architectural, structural, and mechanical drawings, endorsed by a registered architect or engineer.

• Borang B and CCC: Before starting work, submit Borang B to notify the local authority of renovation commencement. Upon completion, apply for a Certificate of Completion and Compliance (CCC) by submitting Form G (21 forms) and arranging a site inspection. For minor renovations, a completion letter from an architect may suffice.

• Strata Properties: For condos or apartments, obtain written authorization from the management corporation (MC) under the Strata Management Act 2013. A refundable deposit is often required to ensure compliance with building rules.

• Additional Approvals: Depending on the project, you may need clearances from agencies like the Fire and Rescue Department (BOMBA) for fire safety systems, Indah Water Konsortium for sewerage, or the Planning Department for extensions exceeding 50% of the original built-up area. Engage professionals like architects, structural engineers, or town planners for complex projects.

• Building Plan Approval: Submit five copies of building plans (four on paper, one on linen), including key plans, site plans, floor plans, elevation plans, and sanitary/plumbing layouts. Plans must follow a color scheme (e.g., red for new works, blue for demolition) and be endorsed by a registered professional.

Failure to obtain permits can lead to fines, demolition of unapproved structures, or legal liability for unsafe renovations. Always consult the local authority or a professional consultant to ensure compliance.

Step 5: Hire Qualified Professionals

A renovation company requires skilled professionals to deliver quality work and comply with regulations. Engage registered architects, structural engineers, mechanical and electrical (M&E) engineers, and town planners as needed. These professionals prepare drawings, ensure structural safety, and navigate approval processes. Additionally, ensure your contractors are CIDB-licensed and verify their qualifications through SSM and CIDB searches.

Step 6: Understand Tax Incentives

The Malaysian government offers tax deductions for renovation costs under the Income Tax (Costs of Renovation and Refurbishment of Business Premise) Rules 2020. Businesses can claim up to RM300,000 for costs incurred between March 1, 2020, and December 31, 2022, for business premises renovations. Ensure your company keeps detailed invoices and engages external auditors to verify claims.

Step 7: Market Your Services

Once registered and compliant, focus on marketing. Create a professional website, leverage platforms like Recommend.my for client reviews, and showcase past projects. Offer competitive quotations and highlight compliance with regulations to build trust. Networking with property developers and real estate agents can also generate leads.

FAQs

1. Do I need a permit for minor renovations?
   Minor renovations, like installing air conditioning or replacing countertops, may not require permits in some cases, but it’s best to check with your local authority. Even minor changes within a commercial or strata property often need approval to ensure compliance with safety and aesthetic standards.

2. What happens if I renovate without a permit?
   Unapproved renovations are illegal and can result in fines, demolition by the local authority, or liability for damages. You may also face issues when selling the property, as unapproved structures aren’t included in the official valuation.

3. How long does it take to get a renovation permit?
   The timeline varies by local authority and project complexity. Simple approvals may take a few weeks, while complex projects requiring multiple agency clearances can take months. Engage a professional consultant to streamline the process.

4. Is CIDB registration mandatory for all renovation work?
   Yes, under the CIDB Act 1994, contractors must register with CIDB for most renovation and construction projects, except for exempted cases. Non-compliance can lead to fines or project suspension.

5. Can I claim tax deductions for renovation projects?
   Yes, businesses can claim tax deductions up to RM300,000 for qualifying renovation costs incurred from March 1, 2020, to December 31, 2022. Ensure proper documentation and verification by auditors to qualify.

Conclusion

Forming a renovation company in Malaysia involves careful planning, legal compliance, and strategic marketing. By registering with SSM and CIDB, obtaining necessary permits, and hiring qualified professionals, you can establish a reputable business. Stay informed about regulations like the Street, Drainage and Building Act 1974 and UBBL 1984 to avoid penalties. With a solid foundation, your renovation company can thrive in Malaysia’s dynamic market.