The Ultimate Guide to CIDB Malaysia: Everything You Need to Know to Stay Compliant

A one-stop guide for contractors to navigate Act 520, the G1–G7 grading system, and Green Card applications. Learn how to stay compliant and get your business site-ready.
February 27, 2026 by
The Ultimate Guide to CIDB Malaysia: Everything You Need to Know to Stay Compliant
CONZLAB BERHAD 202301040401 (1534320P), Jeffrey Eh

Operating in Malaysia’s construction industry is as much about legal precision as it is about engineering excellence. At the heart of this landscape is the Construction Industry Development Board (CIDB).

Whether you are a newcomer starting a G1 renovation firm or a seasoned player aiming for G7 status, staying compliant with Act 520 is non-negotiable. This guide breaks down the essentials of CIDB Malaysia to ensure your business remains on the right side of the law.

What is CIDB Malaysia?

Established under the Construction Industry Development Board Act 1994 (Act 520), CIDB is the regulatory body tasked with overseeing the Malaysian construction sector. Its mission is simple: to ensure every project is safe, high-quality, and sustainable. For contractors, CIDB is the gatekeeper—you cannot legally undertake any construction work in Malaysia without being registered with them.

1. The Contractor Grading System (G1 to G7)

CIDB categorizes contractors based on their financial capability and technical expertise. Your grade determines the maximum value of projects you can bid for:

GradeProject Value LimitMinimum Capital Required
G1Up to RM200,000RM5,000
G2Up to RM500,000RM25,000
G3Up to RM1 millionRM50,000
G4Up to RM3 millionRM150,000
G5Up to RM5 millionRM250,000
G6Up to RM10 millionRM500,000
G7No LimitRM750,000

2. The CIDB Green Card: Your Site Safety Passport

Every individual stepping onto a construction site—from laborers to project managers—must hold a valid CIDB Green Card (Construction Personnel Registration Card).

  • Why it matters: It proves the holder has attended the mandatory Safety Induction Course (SICW).
  • The Penalty: Under Section 33(4), engaging personnel without a valid card can lead to a fine of up to RM5,000 per person.
  • Validity: Generally valid for 1 to 5 years, depending on the renewal fee paid (ranging from RM35 to RM135+).

3. Understanding the CIDB Levy

If your construction project is valued at RM500,000 or above, you are required to pay a mandatory levy to CIDB.

  • Rate: 0.125% of the total contract value.
  • Requirement: The main contractor must declare the project and pay the levy via the CIMS portal before work commences.
  • Example: For a RM1 million project, the levy would be RM1,250.

4. How to Register: A Quick Checklist

Registration is now fully digitized through the Centralised Information Management System (CIMS). Here is what you need to get started:

  1. Business Registration: Valid SSM (Companies Commission of Malaysia) or relevant authority docs.
  2. Financial Proof: Latest bank statements or audited accounts to meet the minimum capital requirement of your desired grade.
  3. Technical Personnel: For higher grades (G3 and above), you must employ qualified technical staff (diploma or degree holders in relevant fields).
  4. Online Application: Submit all documents via the CIDB’s website.

The Cost of Non-Compliance

CIDB does not take regulations lightly. Failure to register or pay the necessary levies can lead to:

  • Heavy Fines: Up to RM50,000 for failing to declare a project.
  • Suspension: Your license may be revoked, preventing you from completing current projects.
  • Blacklisting: Preventing your company from bidding on lucrative government tenders.

Conclusion

Staying compliant with CIDB Malaysia isn't just about avoiding fines—it's about building a reputation for professionalism and safety. By ensuring your grades are up to date, your workers are "Green Card" ready, and your levies are paid, you position your business for long-term growth in Malaysia's vibrant construction market.

Need Help Starting Your Construction Company in Malaysia?

Setting up a construction business can be complex. From choosing the right structure to handling CIDB registration and compliance, we provide end-to-end support for a hassle-free experience.

Let us handle the paperwork so you can focus on building.

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Jeffrey Eh Hao Yih , Director 

Jeffrey has been providing expert guidance for businesses dealing with ongoing challenges. With his expertise, he aids clients in strategic business planning, streamlining operations, and enhancing productivity. Additionally, Jeffrey offers diverse business technology services to help digitize traditional businesses effectively.

The Ultimate Guide to CIDB Malaysia: Everything You Need to Know to Stay Compliant
CONZLAB BERHAD 202301040401 (1534320P), Jeffrey Eh February 27, 2026
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