The Industrial Co-ordination Act 1975 (ICA) was introduced with the aim to maintain an orderly development and growth in the country’s manufacturing sector. The ICA requires manufacturing companies with shareholders’ funds of RM2.5 million and above or engaging 75 or more full-time paid employees to apply for a Manufacturing License (ML) for approval by the Ministry of International Trade and Industry (MITI).

The ICA defines:

• “Manufacturing activity” as the making, altering, blending, ornamenting, finishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal; and includes the assembly of parts and ship repairing but shall not include any activity normally associated with retail or wholesale trade.
• “Shareholders’ funds” as the aggregate amount of a company’s paid-up capital, reserves, balance of share premium account and balance of profit and loss appropriation account.
• “Full-time paid employees” as all persons normally working in the establishment for at least six hours a day and at least 20 days a month for 12 months during the year and who receive a salary.