Registering and Licensing a Business in Sabah

Every national guide to registering a business in Malaysia tells you to open EzBiz and pay RM60. In Sabah that advice is not merely incomplete. It is wrong, and following it leaves you trading unlawfully while holding a certificate that means nothing where you are standing.

The provision that decides everything

Section 1(2) of the Registration of Businesses Act 1956:

This Act shall apply to Peninsular Malaysia only.

The commencement note confirms the reach: Peninsular Malaysia from 1 January 1957, and the Federal Territory of Labuan from 15 March 1996 by P.U. (A) 121/1996. Sabah is not in that list and never has been.

There is therefore no Registrar of Businesses with jurisdiction over Sabah, no ROB number for a Sabah sole proprietorship, and nothing for EzBiz to register. SSM’s own guideline describes registrable businesses as those “operating in West Malaysia which includes Peninsular Malaysia and the Federal Territory” — the exclusion is by omission, but s.1(2) states it directly.

What Sabah requires instead

The Trades Licensing Ordinance (Sabah Cap. 144), in force since 1 January 1949 and originally Ordinance No. 16 of 1948.

Section 3(1) is the operative prohibition:

No person shall carry on in Sabah, whether as principal or agent, any business in respect of which a valid trading licence is not for the time being in force or carry on any such business in any place other than that specified in such licence.

Section 3(2) adds that a separate trading licence is required for each place of business. Three shops means three licences, not one licence with three branches noted on it — a structural difference from the RM5-per-branch model used under ROBA.

“Business” is defined in s.2 as any trade or industry not exempted under the Ordinance, but does not include the practice of a profession. Professional practices sit outside Cap. 144 and are governed by their own professional statutes.

The trading licence is not “business registration” in the SSM sense — it is a permission to trade at a place. But because there is no separate business-names register in Sabah, it is functionally the document that makes an unincorporated business lawful and identifiable.

Who issues it

Section 4(1): trading licences are issued by the administrative officer, or the assistant, in charge of the district where the premises are situated. Section 4(2) lets the Minister appoint any other person as licensing authority for an area — which is how city and municipal councils came to run the process:

• Dewan Bandaraya Kota Kinabalu (DBKK) — Jabatan Pelesenan, ground level, DBKK HQ, Jalan Bandaran
• Majlis Perbandaran Sandakan and Majlis Perbandaran Tawau
• District offices elsewhere — Kudat, Keningau and others now route applicants to the statewide Portal Digital Sabah e-Lesen, which handles both new applications and renewals for Pejabat Daerah jurisdictions (the city and municipal councils run their own separate systems)

So there is no single Sabah-wide counter and no single fee. Your licensing authority is determined by where your premises are.

What it costs, honestly

DBKK publishes RM25.00 per year plus a RM10.00 processing charge for a Kota Kinabalu trading licence. The application form itself is sold at RM1.00.

The statutory schedule points the same way once you read it correctly. The First Schedule to Cap. 144 (headed Section 7(3)), as published by the Sabah State Attorney-General’s Chambers, sets a flat annual fee of $25.00 for the listed trades — building contractor, trader with or without importation, shipping and air transport agents, and the rest. Those are decimal Malayan/North Borneo dollars, not pre-decimal currency. Because the dollar was redenominated as ringgit at par ($1 = RM1) in 1975, the statutory $25.00 reads as RM25.00 — exactly DBKK’s published rate. No separate ringgit-conversion order was located, and none appears to exist; s.16 lets the Minister amend the Schedules, but no such amending instrument is published, and DBKK’s own form refers to the schedule “as amended to date” without reproducing it.

If you are outside Kota Kinabalu, ask your council or district office for its rate. Do not assume DBKK’s figure travels.

Section 7(2) does give a useful pro-rating rule that survives the currency problem: a licence issued after 30 June costs two-thirds of the fee, and after 30 September, one-third.

The 31 December rule

Section 6:

A trading licence shall continue in force until the thirty-first day of December next following the date of commencement.

Every licence in Sabah expires on the same day, regardless of when it was issued. A licence taken out in November lasts about six weeks. That is what the s.7(2) pro-rating is for, and it is why renewal season is a fixed statewide event — DBKK opens renewals from November, and its e-services portal accepts renewal where the licence has been expired for no more than two years.

At the time of writing, DBKK’s own FAQ states that new applications cannot yet be made through e-services; renewals can.

Applying

Section 5 prescribes the form. DBKK’s version is the statutory Section 5 form headed Ordinan Perlesenan Perdagangan, 1948, filed with the Majlis Perbandaran or Pejabat Daerah.

Section 5(3) requires the names, former names, age where under 21, nationality and residence of all proprietors, partners, agents, managers and anyone holding a financial interest. That is a wider disclosure than an SSM Form A asks for. Section 5(4) then requires changes to be filed within 14 days.

The same form serves every entity type — the applicant declares whether it is an individual proprietorship, partnership, Sdn Bhd, public company, co-operative or other. Supporting documents for a sole proprietor or partnership: the tenancy or sale and purchase agreement (or a landlord’s or existing licensee’s consent letter for shared premises), a copy of the identity card, and the latest assessment rate bill (bil cukai kadaran). Copies must be certified by a Commissioner for Oaths, magistrate, JP or licensing clerk.

DBKK maintains a separate document list for village sundry shops (kedai runcit kampung): a JKKK support letter, Ketua Kampung confirmation, land grant copy and location plan.

Sdn Bhd and LLP are still federal

Neither the Companies Act 2016 nor the Limited Liability Partnerships Act 2012 contains a territorial limitation clause of the kind ROBA 1956 has in s.1(2). Both run nationwide.

DBKK’s application form settles the practical question: a Sdn Bhd applicant attaches its Companies Act 2016 documents, and an LLP applicant attaches its Certificate of Registration PLT (Act 743) and LLP profile. The trading licence sits on top of federal incorporation. It does not replace it, and incorporating with SSM does not excuse you from s.3(1).

The other Sabah layers

Work passes. DBKK’s licensing guidance requires the applicant to be a local or permanent resident of Sabah, or to hold a work pass if they are from Sarawak or Peninsular Malaysia; foreign nationals must go through a registered company and hold a pass. The form repeats this for company directors named as licence managers, and its census block distinguishes Warganegara Negeri Sabah from Bukan Warganegara Negeri Sabah. This flows from Sabah’s immigration autonomy under Article 161E of the Federal Constitution and Part VII of the Immigration Act 1959/63.

Other DBKK licences. The trading licence is one of many. DBKK separately issues a composite licence, hawker licence, advertising licence under the 1983 signboard by-laws, beauty and health centre licence, public entertainment licence under the Public Entertainments Ordinance 1958, and petroleum licence under the Petroleum Ordinance 1960, plus by-laws covering food premises, hotels and lodging houses, offensive trades, hairdressers, laundries and five-foot ways.

Sabah State Sales Tax — probably not you. The State Sales Tax Enactment 1998 charges tax on prescribed goods sold or provided by a person carrying on business in Sabah. The current rate orders prescribe a narrow commodity list: 5% on crude petroleum oil, condensate, LNG, natural gas, ammonia, urea and methanol from 1 February 2025, and 5% on gold and silver mined in Sabah from 1 January 2025. An ordinary Sabah shop, café or consultancy is outside it entirely.

Labuan is not Sabah. Labuan was excluded from the State of Sabah on 16 April 1984 by the Federal Territory of Labuan Enactment 1984, and ROBA 1956 was extended to it on 15 March 1996. A Labuan sole proprietor therefore does register with SSM. Cap. 144’s Second Schedule still names Labuan as a town board area — that is a historical artefact predating the 1984 excision, not a live jurisdiction.

Common mistakes

• Registering on EzBiz for a Sabah business. ROBA 1956 does not reach Sabah; the certificate is not the instrument your licensing authority is looking for.
• One licence for several outlets. Section 3(2) requires one per place of business.
• Assuming a 12-month licence. Section 6 ends every licence on 31 December.
• Budgeting DBKK’s RM25 plus RM10 outside Kota Kinabalu. Each licensing authority sets its own rate and most do not publish one.
• Thinking SSM incorporation is enough. A Sdn Bhd trading in Sabah without a trading licence still breaches s.3(1).
• Forgetting the 14-day change notification under s.5(4) after a partner, manager or address changes.
• Not displaying the licence. Section 12(1) requires it exhibited conspicuously on the premises, and s.12(2) lets administrative and police officers enter to inspect.
• Sending a Peninsular director to manage the licensed premises without a work pass.

What’s next

Identify your licensing authority by the address of your premises, then ask that authority for its current fee and document list rather than working from any national article, this one included. If you are incorporating, do the SSM step and the Cap. 144 step as two separate projects with two separate owners — they are not sequential stages of one process, and only one of them makes it lawful to open the door.