Doing Business in Sarawak — SCORE, State Licensing, State Immigration and the Land Code

Start with a number that tells you what kind of place this is. Sarawak runs two parallel chapter-numbering series, and both are live. Cap. 64 of the 1958 Edition is the Business Names Ordinance. Cap. 64 of the current series is the Regional Corridors Development Authorities Ordinance 2006 — the statute behind SCORE.

Same chapter number. One tells you how to register a sole proprietorship. The other creates the state’s flagship industrial corridor. Cite “Sarawak Cap. 64” without the edition and there is no way to tell which you meant.

That is not a curiosity. It is the shape of the whole problem. Sarawak is a separate legal system for most of what a business touches — registration, licensing, employment, immigration, land and electricity — and almost every national guide writes as though peninsular law extends across the South China Sea. It does not.

What SCORE is, and what RECODA cannot do for you

The Sarawak Corridor of Renewable Energy was launched in 2008. RECODA, the authority that administers it, was constituted earlier under the 2006 Ordinance — its existence is confirmed by RECODA’s own materials and by MIDA, though the constituting notification under s.4 of the Ordinance could not be located and its instrument number is not published (see the verification note). Do not conflate the two dates.

SCORE covers roughly 100,000 km², about 80 per cent of Sarawak’s land area. RECODA names five growth nodes — Samalaju, Tanjung Manis, Mukah, Baram and Tunoh — although a second passage on the same page adds Limbang and Lawas. The anchor is Samalaju Industrial Park: over 8,000 hectares, the largest industrial park in East Malaysia, 60 km from Bintulu, with a deep-sea port.

Now the part that matters commercially. The Ordinance contains no power to grant, waive or exempt any tax. Read ss.9 and 10 and what you find is:

• s.9(1)(c) — to promote, stimulate, facilitate and coordinate industrial and economic development within a regional corridor
• s.9(1)(h) — to make recommendations or proposals to the Government
• s.10(k) — subject to the provisions of any other written law, to grant or issue any licence, permit or authorization

That places RECODA in exactly the same position as NCIA under s.6(e) of Act 687 and IRDA under s.5(e) of Act 664. Corridor authorities recommend; the Minister of Finance grants.

Sarawak’s position is weaker still, because MIDA publishes no SCORE-specific incentive package at all. Its SCORE page lists only the generic national reliefs — Pioneer Status, investment tax allowance, infrastructure allowance — notes that specific incentives may vary by corridor, and sends you back to RECODA. MIDA does publish named packages for the Sabah Development Corridor and for NCER. There is no SCORE equivalent, and a sweep of MIDA’s forms-and-guidelines index returns nothing for SCORE, Sarawak or Samalaju.

So if you are choosing Sarawak, you are not choosing it for a tax rate.

The actual proposition is power, and the price is not published

Two provisions show what the state is really selling. Section 3(c) ties the corridor concept expressly to the water, hydropower and other natural resources of the State. And s.14 deems a Regional Corridor Development Authority to be a native of Sarawak for Land Code purposes — letting RECODA hold land that an ordinary company legally cannot.

Sarawak Energy publishes around 3,558 MW of available large hydro capacity: Batang Ai (94 MW, 1985), Bakun (2,520 MW available, 2011) and Murum (944 MW peak, 2015), with Baleh (1,285 MW) under construction. RECODA publishes 2,400 MW installed for Bakun and a 2028 date for Baleh, against Sarawak Energy’s 2030 — two official sources, two answers.

The published tariffs are checkable:

Tariff	Rate
I1 Industrial	24.0 to 26.0 sen per unit by band, minimum RM10 a month
I2 Industrial Demand	21.7 sen per unit, plus RM16.00 per kW maximum demand
I3 Peak / Off-Peak	22.9 sen peak, 13.9 sen off-peak, plus RM20.00 per kW peak demand

Any applied load above 1.5 MVA is pushed into I2 or I3.

But the number that decides a smelter is not on that page. Loads above 5 MW leave the published tariff entirely and move onto a power purchase agreement. Sarawak Energy’s investor material describes the structure — PPAs available at a discount to the published tariff, around 2.5 per cent annual indexation, terms up to 20 years, take-or-pay — and gives no rate. It gives a business development contact instead. Treat any specific SCORE tariff figure in a consultancy deck as unsourced; the negotiation is the deal.

One more thing follows: the Electricity Supply Act 1990 is suspended in Sarawak in its entirety, from 1 September 1990, by P.U.(A) 272/1990. Licensing for generation, supply, transmission and distribution comes from the Majlis Mesyuarat Kerajaan Negeri — the State Cabinet — under s.4 of the Electricity Ordinance Cap. 50, non-transferable without State Cabinet approval and with no right of renewal. If your project involves captive generation or selling power, your regulator is in Kuching, not Putrajaya.

Three registrations, and SSM issues only one of them

An unincorporated business in Sarawak does not touch SSM. ROBA 1956 s.1(2) applies the Act to Peninsular Malaysia only — the word “Sarawak” appears nowhere in Act 197. Three separate instruments replace it:

	Instrument	Statute	Authority
BNR	Business name registration	Cap. 64 (1958 Ed.)	District Officer, or LHDN in Kuching
TL	Trade licence	Cap. 33 (1958 Ed.)	The Collector — the Director of Inland Revenue
OL	Operating licence	By-laws under Cap. 20	The local council

Yes: the state trading licence is administered by LHDN, not SSM, because s.2 of Cap. 33 defines the Collector as the Director of Inland Revenue, with District Officers appointed Deputy Collectors under s.5(2). Section 3(4) confirms the three stack.

Incorporating a Sdn Bhd stays federal and stays with SSM — neither the Companies Act 2016 nor the LLP Act 2012 carries a territorial limitation clause. But a Sdn Bhd trading in Sarawak still needs the trade licence and the council licence on top. Deadlines, fees and penalties are in the companion article on registering a business in Sarawak.

Immigration is controlled by the Chief Minister

This is the one that surprises people mid-hire, and it is entrenched constitutionally. Article 161E(4) of the Federal Constitution, inserted by the Malaysia Act 1963, treats state rights over entry into and residence in the State as if they had been embodied in the Constitution. Immigration is otherwise a Federal List subject, which is exactly why the carve-out runs through Part VII of the Immigration Act 1959/63, headed Special Provisions for East Malaysia.

The operative sections are not what most summaries assume:

• s.62 — “State Authority” means the Chief Minister.
• s.64(3)–(4) — Sarawak is a separate immigration unit with its own Director. The Director General’s general entry power under s.9A and the repatriation power under s.46 do not apply.
• s.66 — a citizen is not entitled to enter an East Malaysian State without a permit or pass unless he belongs to that State. Section 66(3) then deals with a non-entitled citizen under the rest of the Act as if he were not a citizen, and s.66(4) puts the burden of proof on him.
• s.65 — the state Director shall comply with any directions given by the State Authority, including a direction not to issue a pass, to issue only on specified terms, or to cancel a pass and order removal from the State. On appeal, s.65(2) says the Minister shall not allow the appeal without the concurrence of the State Authority.

For foreign staff the practical consequence is blunt. MYXpats states that the Employment Pass is valid in Peninsular Malaysia only, and the Immigration Department states that Sabah and Sarawak applications are subject to the jurisdiction of the respective State Governments. Sarawak runs its own channel, the GENESIS portal, with a stated minimum salary of RM3,000 a month and validity of one to five years, approved by the state immigration office with labour gatekeeping through Jabatan Tenaga Kerja Sarawak.

For Malaysian staff sent from the peninsula the legal direction is equally clear — a social or business visit pass issued on arrival does not authorise employment, and s.65(1)(a) lets the State impose terms. What is not clear is the paperwork: no official page names the specific pass, its duration or its fee. Ask the state immigration office rather than relying on a figure from a blog.

The Land Code decides where you can build

Land in Sarawak is classified under Land Code Cap. 81 into five classes defined in s.2: Mixed Zone Land, Native Area Land, Native Customary Land, Interior Area Land and Reserved Land. Interior Area Land is the residual category.

Section 8 is the operative bar. A person who is not a native of Sarawak “may not acquire any rights or privileges whatever” over Native Area Land, Native Customary Land or Interior Area Land. An agreement to the contrary is void for illegal consideration, the breach is an offence, and the court may order eviction. A company is a non-native. In practice that confines corporate acquisition to Mixed Zone Land.

Then a second layer, keyed to foreign ownership. The section numbers here are frequently cited wrongly, partly because the consolidated PDF’s own arrangement-of-sections table is misaligned with the body text by one letter — cite the body, not the index:

• s.13A — an absolute bar on holding or acquiring any estate or interest by a person who is not a Malaysian citizen and not permanently resident in Sarawak, by a foreign company not registered in Malaysia, or by trustees for either.
• s.13B — the workable route: with the consent of the Minister, land may be acquired by a company registered in Malaysia whose shares carrying more than 50 per cent of the voting power are held by non-citizens.
• s.13C — the bar extends to any transfer, sublease or transmission, or any dealing other than a charge. A long industrial sublease to a foreign-controlled entity is caught.
• s.13E — and here the corridor reappears. The State Cabinet may gazette a Special Development (Exemption from Prohibition of Foreign Interests) Area, within which foreigners may acquire land despite ss.13A to 13C. The qualifying purposes expressly include development of any area within a regional development corridor established under the Regional Corridors Development Authorities Ordinance 2006, and separately industrial estates including free zones.
• s.13F — offending instruments are void, registration is cancelled, fine to RM50,000.

On tenure, rule 13 of the Land Rules gives 60 years for factory sites, shop lots and non-residential brick or concrete buildings. Read it carefully: that is the maximum issuable without the sanction of the Director, so it is a routine ceiling rather than a statutory cap.

Two more things that only exist here

A state sales tax. The State Sales Tax Ordinance 1998, Cap. 25 is charged under s.7(1), with rates set by the State Cabinet under s.13. Petroleum products carry 5 per cent — Swk. L.N. 239/2018, effective 1 January 2019 — and coal 8 to 10 per cent by calorific band. Both bite only on sale or delivery outside the State, so they are export taxes in substance, and they sit entirely outside federal SST.

A different employment statute. Section 1(2) of the Employment Act 1955 applies that Act to Peninsular Malaysia only. Sarawak runs on the Sarawak Labour Ordinance Cap. 76. The 2025 amending Act A1754 inserted a replacement First Schedule that disapplies the s.2 definitions of normal hours of work and overtime, among other provisions — there is no section-for-section mapping to Act 265, so a peninsular compliance matrix cannot be find-and-replaced into Sarawak. The LawNet consolidated Cap. 76 is current only to 2006; read it with A1754.

Common mistakes

• Citing Sarawak Cap. 64 without the edition. The 1958 Edition is business names; the current series is the corridor authorities ordinance.
• Expecting a SCORE tax incentive. RECODA has no power to grant one and MIDA publishes no SCORE package. The federal MIDA route is the only tax route, and it works everywhere.
• Quoting a SCORE power tariff. No bulk rate is published. The I2 rate of 21.7 sen is the reference point a PPA discounts from, not the deal.
• Assuming a federal Employment Pass covers a Kuching office. It does not, and that discovery usually costs weeks.
• Treating Native Customary Land as buyable with enough goodwill. Section 8 voids the agreement, criminalises it and permits eviction.
• Reading the Land Code’s arrangement-of-sections table. It is offset by one letter against the body text.
• Applying Employment Act 1955 thresholds to Sarawak staff, or filing on EzBiz. Both statutes stop at the peninsula.

What’s next

Sequence the state approvals first — they are the ones with no peninsular equivalent and therefore no adviser bandwidth. Confirm the land class of your site before signing anything, and establish whether it sits inside a gazetted s.13E area if any of your shareholding is foreign. Open the Sarawak Energy conversation early if your load will exceed 5 MW, because the PPA is where the economics live. Line up the GENESIS route before making an offer to anyone who is not from Sarawak.

Then run the federal track — SSM incorporation, the MIDA incentive application, the manufacturing licence — on ordinary national terms, because on that track Sarawak is like everywhere else. For how the five corridors compare on authority, statute and application route, see the corridor comparison.