— Regulator & Legal Basis
Regulator and Legal Basis
Malaysia's construction industry is regulated by the Construction Industry Development Board Malaysia (Lembaga Pembangunan Industri Pembinaan Malaysia, “CIDB”). Under Section 25 of the Construction Industry Development Board Malaysia Act 1994 (Act 520, as amended in 2011), since 20 July 1995 every local or foreign contractor must register with the CIDB before undertaking, tendering for or completing any construction works in Malaysia (unless the Act provides an exemption). Contravening Section 25 is punishable, upon conviction, by a fine of not less than RM10,000 and not more than RM100,000 (Section 29); the CIDB may also, under Section 30, issue a written notice requiring the contractor to stop or to continue the construction works concerned.
01 · SECTION 25
Mandatory Registration
Register with the CIDB before undertaking, tendering for or completing works
From 20 July 1995
02 · SECTION 29
Penalty for Breach
Upon conviction
RM10,000 – RM100,000
03 · SECTION 30
Written Notice
The CIDB may require works to stop or to continue
Issued by the CIDB
— Definition
What Counts as “Construction Works”
This covers the construction, extension, installation, repair, renovation and demolition of buildings, structures, roads, wharves, bridges, water works, and electrical, mechanical and telecommunications lines and services. It also includes works directly related to these (such as site clearance, geotechnical investigation and foundation works) and ancillary matters such as the procurement of construction materials.
— Registration Types
Types of Registration
The main registrations and certificates issued by the CIDB are as follows:
Local Contractor Registration Certificate
Perakuan Pendaftaran Kontraktor, PPK
The basic registration certificate for companies incorporated in Malaysia with more than 70% local equity that carry out construction works; it is a prerequisite for undertaking general construction works
A newly approved PPK is valid for 2 years; after renewal, the validity period depends on the contractor's accumulated CCD (Continuing Construction Development) points and may range from 1 to 3 years.
Government Works Procurement Certificate
Sijil Perolehan Kerja Kerajaan, SPKK
Contractors wishing to tender for government projects must apply for this certificate separately, in addition to holding a PPK
Joint Venture / Consortium Registration
Pendaftaran Kontraktor Usahasama / Konsortium
Applies where two or more companies undertake works together as a joint venture or consortium
Overseas Registration for Local Contractors
Pendaftaran Kontraktor Antarabangsa
Applies to local contractors already registered with the CIDB that intend to undertake works overseas
Foreign Contractor Registration
Pendaftaran Kontraktor Asing
Applies to companies with more than 30% foreign equity, which must first complete “pre-registration” and then apply for a “temporary registration certificate”; only after being awarded a contract may they apply for the “formal foreign contractor registration certificate”
Foreign contractor registration has three stages:
01 · STEP 1
Pre-Registration
Must be completed first
Entry requirement
02 · STEP 2
Temporary Certificate
Issued for a specific tender; valid for the tender and evaluation period
Tender stage
03 · AFTER AWARD
Formal Certificate
Valid for that specific project only; not transferable and not usable for other projects or tenders
Non-transferable
— Contractor Grades
Contractor Grades: G1 to G7
The CIDB classifies local contractors into seven grades, G1 to G7, according to their financial standing and capacity. The grade determines the maximum value of works a contractor may undertake and the paid-up or accumulated capital required:
— Contractor Categories
Contractor Categories
The CIDB groups contractors into four categories:
CE
Civil Engineering
Civil Engineering Construction
B
Building
Building Construction
ME
M&E Works
Mechanical and Electrical
F
Facilities
Facility
— Default Scope
Works Approved by Default for New Applicants
When a new company registers, it is generally approved for one core default specialisation under each of the B, CE and ME categories:
B04
Building Construction Works
Building Construction
Covers construction works for all kinds of buildings and factories
CE21
Civil Engineering Works
Civil Engineering Construction
Covers the construction of all kinds of civil engineering structures
M15
General Mechanical Works
Mechanical Equipment Installation
Covers all kinds of mechanical assembly works (e.g. installation, testing, servicing and repair of industrial machinery, pumps and lifting equipment)
In other words, a new company is not granted all specialisations under the B and CE categories across the board; it first obtains eligibility for the three core specialisations B04, CE21 and M15. If the company later wishes to undertake other specialisations or to apply for the F (Facility) category, it must apply separately for an extension in accordance with CIDB requirements, and may need to provide the relevant technical personnel qualifications or professional certificates.
— Scope by Category
Scope of Works by Category
Building Construction29 sub-specialisations
Building construction works, piling works, concrete structure repair, interior fit-out, waterproofing installation, roof installation, swimming pool works, building maintenance, refurbishment works and healthcare building works, as well as IBS (Industrialised Building System) works, including precast concrete, steel structure, formwork, block and timber systems
Civil Engineering43 sub-specialisations
Road and pavement works, bridge and wharf construction, dam works, underground tunnelling and support, drainage and flood mitigation, railway track works, slope protection, airport works, land reclamation, water supply and sewerage systems, civil engineering construction (CE21), earthworks, precast concrete installation and more
Mechanical23 sub-specialisations
Air-conditioning and air distribution systems, fire prevention and protection systems, lifts and escalators, building automation systems, medical equipment systems, boiler and pressure equipment systems, general mechanical assembly works (M15), tower cranes, pump systems, SCADA and telemetry systems and more
— How We Help
How We Can Help
Yingke Malaysia can help clients understand the contractor grade, category and specialisation scope that apply to their business; prepare and organise the company documents, proof of capital and technical personnel information required for CIDB registration; submit the registration application on the client's behalf; and follow up on the CIDB's review and any requests for supplementary information.
※Disclaimer: The above is a general compilation of information, based mainly on the Construction Industry Development Board Malaysia Act 1994 (Act 520) and the contractor registration requirements published by the CIDB. It is intended to help readers gain a preliminary understanding of the general framework of contractor registration in Malaysia, and does not constitute formal legal, tax or compliance advice, nor should it be relied upon as the sole basis for any investment or application decision. The CIDB's rules and approval policies on contractor registration may change at any time; fees, grade thresholds, capital requirements and technical personnel qualification requirements are subject to the latest rules officially published by the CIDB. Whether an individual application is approved, and the grade, category and specialisations granted, are determined by the CIDB based on the circumstances of the application. Before making an actual application, companies are advised to confirm the latest rules and specific requirements with Yingke Malaysia or the relevant authority.