Getting Started-Hypermarket Business in Malaysia

Getting Started

Hypermarket Business in Malaysia

Order custom essay Getting Started-Hypermarket Business in Malaysia with free plagiarism report

450+ experts on 30 subjects Starting from 3 hours delivery

Get Essay Help
• Stage 1 - Company Registration Approval of Company’s Name Certificate of Incorporation Approval for Establishment of Distributive Trade (Foreign Equity)
• Stage 2 Employer/Employee Registration - Employer Registration with EPF Member Registration with EPF Employer Registration with SOCSO Employee Registration with SOCSO Employer Registration with IRB Registration as Corporate Payer with IRB
• Stage 3 Pre-operational Approvals Premise & Advertisement Licence for Hypermarket Registration Certificate for Electric Installation Retail Licence for Rice Wholesale/Retail Licence for Chicken
• Stage 4 Additional Approvals

Overview

Distributive trade has been identified as one of the key industries in the services sector under the 9th Malaysian Plan. It is due to the fact that distributive trade as a whole grew from RM59. 6 billion in the year 2000 to RM205. 6 billion in 2005. The growth in distributive trade is visible with the emergence of modern and large departmental stores, shopping complexes and warehouse stores not only in the city centres but also in the suburbs, particularly near urban residential areas.

The Government policy of modernising distributive trade has resulted in an increase in the number of supermarkets and department stores as well as the emergence of large area retail outlets called hypermarket. Hypermarkets are stores larger than 8,000 square meters (86,000 square feet) that sell a wide range of household grocery products ranging from frozen goods and fresh products to textiles, garments and shoes, as well as electrical goods such as home kitchen items and audio-visual appliances.

Hypermarket is regarded as a convenient one-stop shopping centre that caters to a mix of consumers from housewives to students and working professionals. Due to the wide range of products offered, the hypermarket operator is required to obtain approvals from various Government agencies to sell certain products or conduct certain activities in his business premise. Information of those required approvals are compiled in this guidebook and it is hoped that it would provides a comprehensive reference to hypermarket operators in running their businesses.

Stages of Approvals in Starting Hypermarket Business

On the assumption that the hypermarket building is completed and ready to be occupied, the operator is required to apply a minimum of 14 approvals to start the business. However, he may also apply for a maximum of 29 approvals, depending on products sold as well as activities that are carried out in the premise. The 29 approvals can be categorised into 4 stages as follows:

• Stage 1: Company Registration
• Stage 2: Employer/Employee Registration
• Stage 3: Pre-Operational Approvals
• Stage 4: Additional Approvals

Approvals include licences, permits, registrations and authorisation letters. The minimum 14 approvals involved approvals needed in Stage 1 to Stage 3. Stage 4 comprised of 15 additional approvals that may be applied individually if the operator intends to sell certain product or involves in certain activities that require permission from Government authorities.

Stage 1: Company registration

For the purpose of conducting business in Malaysia, the most common type of company incorporated under the Companies Act 1965 (CA) is a company limited by shares. It may be incorporated as a private company or public company. The requirements to form a company are:

1. A minimum of two subscribers to the shares of the company (Section 14 CA);
2. A minimum of two directors (Section 122 CA);
3. A company secretary who can either:
4. An individual who is a member of a professional body prescribed by the Minister of Domestic Trade and Consumer Affairs;
5. An individual licensed by Companies Commission of Malaysia.

Both the director and company secretary shall have their principal or only place of residence within Malaysia. For starting the hypermarket business, this Guidebook shall outline the incorporation procedures of a local company limited by shares . A hypermarket operator has to apply for two approvals namely the Approval of Company’s Name followed by the Certificate of Incorporation.

Getting Started

The steps involved are

• Completion and submission of Form 13A Company Act (Request For Availability of Name) to CCM; and
• Payment of a RM30. 00 fee for each name applied. When the proposed company’s name is approved by SSM, it shall be valid for three months from the date of approval. Approving Time The approving time for application for name is 1 day.
• Lodgement of Incorporation Documents The following documents must be submitted to CCM within three months from the date of approval of the company’s name:

Memorandum and Articles of Association

•  An original copy of the Memorandum and Articles of Association shall each be stamped at RM100. 00. Stamps are affixed at the Inland Revenue Board’s stamp office.
• The directors and secretaries shall be named in the Memorandum and Articles of Association.
• The subscribers to the company’s shares shall sign the 5 Getting Started: Hypermarket Business in Malaysia Memorandum and Articles of Association in front of a witness

Additional documents

• Original Form 13A;
• A copy of the letter from CCM approving the name of the company; and
• A copy of the identity card of each director and company secretary.

Registration Fees

Each application for the incorporation of a company shall be accompanied with payment as per schedule below:

Stage 2: employer/employee registration

Hypermarket operator has to make both employer and employee registration with 3 agencies as follows:

1. Employees Provident Fund (EPF);
2. Social Security Organisation (SOCSO); and
3. Inland Revenue Board (IRB).

Application to the above agencies can be applied concurrently and approvals can be obtained in one day. As an employer, hypermarket operator must register with EPF within 7 days from the date the company becomes liable to contribute, that is as soon as an employee is hired. Employer is then required to make EPF contributions, both for the Employee and Employer portions, at the prevailing rates spelt out in the Third Schedule of the EPF Act 1991.

Currently, contribution rates are 11% for the employee and 12% for the employer. However, employer is advised to keep abreast with changes which may take place from time to time. Hypermarket operator is required to complete Form EPF 1 and forward it together with the following documents:

1. Photocopy of Identity Card (IC) of the person who signs the application form. Photocopy of IC must have the company chop and certified by the company secretary; and
2. Company Registration documents (Form 49 and Form 9) Validity Period One-off registration. Approving Time Employer’s Registration will be processed within 1 day from the date of submission of complete application. Hypermarket operator as employer is also responsible to register an employee with the EPF, if he works for the first time.
3. Photocopy of Birth Certificate (if do not have IC); and
4. Photocopy of Passport/Work Permit and complete Form 16B (Foreigners). Validity Period One-off registration. Approving Time Members’ Registration will be processed within 1 day from the date of submission of complete application.

All employees who have been employed by an employer under a contract of service of apprenticeship are liable under Social Security Act 1969. Contribution under Employment Injury Insurance Scheme:

1. Employer - 1. 25% of the employee' wages
2. Employee - Nil Contribution under the Invalidity Pension Scheme:
3. Employer - 0. 5% of the employee’s wages
4. Employee - 0. 5% of the employee’s wages Employer's

Registration

Hypermarket operator who employs employees is required to register and contribute monthly to SOCSO.

Employee’s Registration All employees eligible for coverage under the Act must register and contribute to SOCSO irrespective of the employment status whether it is permanent, temporary or casual in nature.

Getting Started

Approving Authority Social Security Organisation Law & Regulations Social Security Act 1969 Application Process Hypermarket operator is required to submit Form 1 (Employer Registration Form) and Form 2 (Employee Registration Form) to the relevant Local Office with the following documents:

1. Form 9 – Certificate of Incorporation of Company;
2. Form 49 - Return Giving Particulars in Register of Directors, Managers and Changes of Particulars;
3. Form 13 - for change of name of company. Validity Period One-off registration. Approving Time The approving time for both registrations is 1 day. For further details, please contact: Sosial Security Organisation (SOCSO)

Hypermarket operator is required to register as an employer with IRB for the purpose of payment of Scheduled Tax Deductions pursuant to the Income Tax (deduction From Remuneration) Rules 1994. Approving Authority Inland Revenue Board Law & Regulations Income Tax (Deduction From Remuneration) Rules 1994 Application Process Registration can be made by using the Return Form of an Employer (Form E) which must be furnished to the IRB branch with the following documents:

1. Form 9 - Certificate of Incorporation of Company.
2. Form 49 - Return Giving Particulars in Register of Directors, Managers and Changes of Particulars.
3. Validity Period One-off registration. Approving Time The approving time for registration is 1 day.

These approvals can be applied concurrently. Hypermarket operator is required to apply Business Licence to carry out his business activities. The application can be simultaneously applied with Advertisement Licence. Approving Authority Respective Local Authorities Laws & Regulation

1. Trades, Businesses and Industries By-Laws
2. Advertisements By-Laws Application Process Application can be made using the forms that are available on the website or can be obtained at the counter of respective local authorities. Completed application form must be accompanied by the following documents:
3. A copy of the company’s Memorandum and Articles of Association;
4. A copy of Form 9 – Certificate of Incorporation of Company;
5. A copy of Form 49 - Return Giving Particulars in Register of Directors, Managers and Changes of Particulars;
6. A copy of the premise’s location plan;
7. A drawing indicating the design of each proposed signboard;

Validity Period The business and advertisement licence is valid between 1 to 3 years depending on the option by the applicant. The date of the validity period shall start from the application date and expire on the same date next year or the following years. Approving Time The hypermarket operator may commence his business upon receiving an acknowledgement for licence application from local authority. Business licence will be issued within 7 days from the date of application. 60 days reprieve time is given to the hypermarket operator to fulfil the requirements imposed by the local authority.

Law & Regulations

• Electricity Supply Act 1990
• Electricity Regulations 1994

Application Process

• Application for the registration of installation must be made by using Form ST(KE)9 which can be obtained from EC Regional Offices.
• The form can also be downloaded from EC website at www. st. gov. my. The application must be submitted with the following documents:
• Form A (First Schedule in Electricity Regulations 1994) which is signed by the owner or management of the installation themselves;
• Plan, schematic drawing and specification which is signed by Professional Electrical Engineer;
• Form G (Supervision and Completion Certificate) which is made out and signed by registered wiremen whereby the wiremen must be employed on a full-time basis by a registered Electrical Contractor; and
• Form H (Test Certificate),which is made out and signed by wiremen/Electrical Services Engineer.

Approving Authority Ministry of Agriculture and Agro-based Industry Law And Regulations Paddy and Rice Control Act 1994 (Act 522) Application Process Application for the licence must be made by using the BP/D form which is available at the Paddy and Rice Division, Ministry of Agriculture and Agro- Based Industry and all its 19 branch offices in the country. The application must be submitted with the following documents:

1. A copy of the company’s Memorandum and Articles of Association;
2. A copy of Form 9 – Certificate of Incorporation of Company;
3. A copy of Form 24 – Return of Allotment of Shares;
4. A copy of Form 49 - Return Giving Particulars in Register of Directors, Managers and Changes of Particulars; and
5. Approval and verification for business operation document from the Local Authority. Validity Period The Retail Licence for Rice is valid for 3 months, 1 year or 3 years depending on the option by the applicant

Stage 4: Additional approvals

Hypermarket operator may apply for additional approvals if he intends to sell more products or involve in more business activities that require permission from Government authorities. 15 Hypermarket operator intending to import fish or fish-based products is required to apply for import licence from Fisheries Development Authority of Malaysia (LKIM).

Pursuant to that, LKIM State Office will conduct a premise inspection and applicant is required to provide the following documents during the inspection:

1. A copy of identity card and one identity card size coloured photograph of the applicant;
2. A copy of the company’s Memorandum and Articles of Association;
3. A copy of Form 24 – Return of Allotment of Shares; 29 Getting Started: Hypermarket Business in Malaysia
4. A copy of Form 49 - Return Giving Particulars in Register of Directors, Managers and Changes of Particulars;
5. A copy of Bank Statement for the last 3 months; f. A copy of sale and purchase agreement or tenancy agreement or ownership certificate of trading facilities. Validity Period The LKIM Licence is valid for 1 year.

Don't let plagiarism ruin your grade

Run a free check or have your essay done for you

Check my essay Hire Writer