The vessel, reportedly carrying undocumented migrant workers heading for Aceh in Indonesia, capsized after leaving Carey Island in Malaysia's Selangor state on Wednesday morning, the Indonesian Ministry of Foreign Affairs told CNN.
Malaysian Maritime Enforcement Agency said 60 people have been rescued so far, and five bodies have been recovered.
However, authorities say the rescue effort is being hampered by low tides.
Indonesia's Deputy Ambassador to Malaysia is en route to the scene near Banting in the Strait of Malacca.