GUIDE · DOING BUSINESS IN SABAH

Doing business in Sabah: what’s different

Sabah is part of Malaysia, but it joined on agreed terms in 1963, and some of its rules still differ from the rest of the country. If you are investing, building, hiring or buying land here, these are the differences that matter.

General information, last reviewed November 2026.

“Sabah works a little differently. Let’s plan for it.”

SEVEN THINGS TO KNOW

What’s different in Sabah

  1. NOTE01 Its own immigration controlSabah controls entry into the state. Malaysians from outside Sabah can visit with their MyKad, but generally need a work pass to work here, and foreign employees need passes approved for Sabah. Build the time into your plans.
  2. NOTE02 A licence to hire from outside SabahSince 15 February 2026, employers need a Licence to Employ Non-Resident Employee from the Director of Labour, Sabah, before hiring anyone who does not belong to Sabah. Employment here is governed by the Sabah Labour Ordinance, not the Employment Act 1955.
  3. NOTE03 Its own land lawLand is governed by the Sabah Land Ordinance, not the National Land Code. Title types are different, such as Country Lease, Town Lease, Native Title and Field Register, and searches are made at the Lands and Surveys Department.
  4. NOTE04 Native title and customary rightsNative Title and Field Register land is generally reserved for natives of Sabah, and dealings between natives and non-natives need state approval. Native customary rights can also exist over land with no title, so check before you buy, lease or develop.
  5. NOTE05 Approval for foreign buyersForeign individuals and companies, including Malaysian companies with majority foreign voting rights, need state approval to acquire property in Sabah, and minimum purchase prices apply. The thresholds are set by state guidelines and change from time to time.
  6. NOTE06 Its own BarOnly advocates admitted in Sabah may practise law here, including conveyancing and court work. Lawyers from elsewhere need ad hoc admission for a particular case, which is why clients from outside Sabah work with a Sabah firm.
  7. NOTE07 Federal law still appliesCompany registration with SSM, tax, trademarks with MyIPO and construction payment claims under CIPAA work as they do elsewhere in Malaysia. A company incorporated anywhere in Malaysia can operate in Sabah, subject to local business licences.
YOUR FIRM ON THE GROUND IN SABAH

How we help

We have advised businesses in Sabah since 1976, from offices in Kota Kinabalu, Sandakan and Tawau. Our partners and consultant bring experience from the bench, state government and regional arbitration, and our clients include multinationals, banks and investors from across Malaysia and abroad.

  • Land and title due diligence, including native title and customary rights
  • Company set-up, joint ventures with local partners and business licences
  • Licences to employ non-residents and immigration passes
  • Property acquisitions, including state approval for foreign buyers
  • Construction contracts and CIPAA payment claims
  • Disputes in court, in arbitration (including at BICAM, Borneo’s own arbitration centre) and in mediation

Planning a move into Sabah?

Talk to us Read our Sabah essentials comics

This guide is general information, not legal advice. Rules, thresholds and procedures change, so speak to us about your own situation before you act.

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