Local government is the third ranked government in the Malaysian government system after the

state and federal governments. According to Malcolm W. Norris (1989), the local government of
the Malaysian Peninsula refers to an urban, rural, or combination of two regions, and is
subordinate to the state government. In the administration of local authorities, local authorities
play an important role. "City Council, Municipal Council/District Council, as the case may be,
and with relation to the Federal Territory, the Mayor of Kuala Lumpur appointed under Section 3
of the Federal Capital Act, 1960," that was according to the Local Government Act 1976 (Act
171).

The first criteria status of municipal council in Malaysia has population minimum of 150,000 and
gained income at least RM20 Million revenue per annum and has the ability to arrange services
at a proper and comfortable level in accordance with the quality of life in a specific city. The
criteria for a municipal council in Malaysia role to be a city or administrative centre for any State
or district. As an example, since 1993, there has been discussion about establishing a
Malaysian government administrative centre outside of Kuala Lumpur. One of the key reasons
for relocating the administrative centre away from Kuala Lumpur was to ensure that the new
administrative centre will have a good quality of life and environment. The relocation of the
Federal Government's administrative functions out of the already congested capital city of Kuala
Lumpur not only helped to relieve pressure on the city's overburdened infrastructure, but it also
helped to resolve a severe shortage of government land to meet increased demand for office
space.

Secondly, municipal council has the capacity to provide opportunity to businesses by promoting
growth investment activity. Capacity to provide space and opportunities to a large number of
dealers in order to encourage growth in investment activity, business, and commercial activity.
As an example, getting information of business location and premise like when it comes to
enhancing your chances of success, having a decent location for your business is crucial.
Hence, to make informed selections, you must conduct thorough study before selecting the
ideal location for your business. There is also a lot of agencies that offer retail space for rent
such as Kajang Municipal Council, MARA, Ampang Jaya Municipal Council, Selayang Municipal
Council and Perbadanan Usahawan Berhad (PUNB).
Thirdly, the criteria for a municipal council also have industrial activity, business tourism and
major housing development that have been identified as possible contributors to expansion hold
may be charged and create job opportunities in a variety of sectors. One of the examples that
can be stated is about the business tourism in municipal council following the government's plan
to promote rural areas and diversify the economy, the tourist industry has risen to become the
second most important sector after petroleum and the tourism development in Malaysia began
since 1960s. As a result, the tourism industry can grow by proposing additional attractions and
infrastructure in each state, encouraging more interstate travellers and developing more tourist
sites and infrastructure along the major road for domestic and international tourists.

Lastly, municipal council have an infrastructural facility and a well-connected highway system
and a steady notion of town planning (sustainable) that complies with providing a safe and
comfortable environment to live in. In addition, it also has programmers who can inspire local
citizens to build communities through effective city administration, such as the Local Agenda 21
(LA 21) implementation programme or citizen involvement committee. As an example, the
electricity supply in Malaysia is adequate, consistent and has high quality, and is compatible
with other utilities in the region and globally. Tenaga Nasional Berhad, a national utility
corporation, provides power to West Malaysia, whereas Sabah Electricity Sendirian Berhad
(SESB) and Sarawak Energy Berhad (SEB).

In conclusion, if a local authority fails to record the required minimum total annual revenue,
consideration may be given if the local authority has the capacity and ability to generate
additional revenue from various sources that have been certified until the total minimum as set
for the purpose of upgrading status to City Council, Municipal Council and District Council.