The Malaysian food service market is currently estimated at USD 13.11 billion and is expected to reach 23.95 billion by 2029, representing significant growth potential. However, if you are planning to open a restaurant in Malaysia, you must comply with several regulations and secure approvals from relevant authorities.
Therefore, in this article, we will walk you through the legal requirements and process of opening a restaurant in Malaysia.
Can Foreigners Open a Restaurant in Malaysia?
Yes, foreigners can open a restaurant or start an F&B business in Malaysia. However, there are specific requirements and considerations for foreign investors.
First of all, foreign-owned restaurants must obtain a Wholesale and Retail Trade (WRT) License from the Ministry of Domestic Trade (KPDN). This license is only granted to restaurants with a "unique" concept. For instance, foreigners can open authentic French cuisine or specialized Arabic restaurants.
Additionally, foreign-owned restaurants must have a minimum paid-up capital of RM1,000,000 (Approximately USD 233,000).
Types of Restaurant Licenses in Malaysia
When opening a restaurant in Malaysia, you must secure several licenses and permits depending on your planned activities. These licenses can be divided into two categories; mandatory licenses and restaurant-specific licenses.
Mandatory Licenses for Opening a Restaurant
The mandatory licenses to open a restaurant in Malaysia include:
- Business Premise License / Business License: The business license for a restaurant in Malaysia is known as Food & Beverages Restaurant License (Kedai Makanan). This license is issued by the Local Authorities (Pihak Berkuasa Tempatan – PBT) and certifies that your premises conform to relevant health and safety requirements.
- Signboard License: This license is also issued by the PBT and verifies that your signboard provides a truthful representation of your business and meets local regulations.
Restaurant-Specific Licenses in Malaysia
Restaurant-specific licenses are the ones that depend on certain activities. For example, whether you plan to serve alcoholic beverages, play music, or host live performances, etc. There are three main licenses under this category:
- Liquor License: If you plan to serve alcohol, you'll need to obtain a Public House Liquor License from the Local Authority.
- Music and Entertainment Licenses: If you want to play music or host live performances at your restaurant, you'll need licenses from Music Authors' Copyright Protection (MACP) Berhad.
- Halal Certification: For restaurants to cater to Muslim customers, they need to obtain the Jakim Halal Certification. Otherwise, you cannot claim your food to be halal.
It is important to note that you can’t have both the liquor license and the halal certification for your restaurant simultaneously. Obtaining a liquor license automatically disqualifies your restaurant from getting the halal certification in Malaysia.
On the other hand, if you don’t have halal certification, that does not mean you can’t serve food to customers. You can’t just claim that your food is Halal.
Legal Requirements to Open a Restaurant in Malaysia
To ensure your restaurant complies with all the local regulations in Malaysia, you must meet the following legal requirements for opening a restaurant:
- Business registration
- Premise and Signboard Licenses
- Additional Licenses depending on the restaurant concept such as liquor license or halal certification from Jakim
- Food Handler Certification and Typhoid Vaccination for Food Handlers
- Valid tenancy agreement for business premises
In case the restaurant is foreign-owned, you must also secure the WRT license in addition to the requirements mentioned above.
Steps to Open a Restaurant in Malaysia
1. Choose a Legal Entity and Register Your Company
To open a restaurant, you need to choose an appropriate legal entity based on your specific goals and circumstances.
Though there are several legal entities available in Malaysia, a Private Limited Company (Sdn Bhd) is often the best choice for restaurants. Other options include a limited liability partnership (LLP), sole proprietorship, and partnership.
In case of foreigners, they can only open either an Sdn Bhd or LLP.
Once you decide on a suitable business entity, you can reserve the business name and register your company with the Companies Commission of Malaysia.
Refer to our article for details on how to register a company in Malaysia.
Additionally, you will need to register for corporate taxes, SST, and social security contributions.
It is advisable to consult Emerhub’s local experts who will handle the entire process on your behalf to ensure that all legal requirements are met in line with your goals.
2. Ensure Your Food Handlers Have Food Handler Certification
The Food Handler Certification is mandatory for all employees involved in food preparation and handling. Therefore, you need to find an accredited training provider approved by the Ministry of Health.
This is a 3 hours+ training and can be completed both online and onsite.
Additionally, you must ensure that the staff has received the Typhoid Vaccination.
3. Apply for the Business Premise and Signboard License (Composite License)
The business premise license and the signboard license are mandatory for all restaurants in Malaysia. Since both of these permits are obtained from the relevant local authority (Pihak Berkuasa Tempatan – PBT), they are often applied together.
After the application, the local authorities will conduct a premise inspection to ensure your restaurant meets the necessary requirements.
Emerhub’s experts handle these submissions on your behalf to avoid unnecessary delays. This helps to ensure that you have the mandatory permits as soon as possible.
4. Obtain Additional Licenses such as Halal Certification
Depending on your restaurant concept and activities, you might need to obtain additional licenses as mentioned before. These additional licenses include Halal Certification from Jakim, Liquor License, and the Music and Entertainment License.
Note that these licenses are only needed if you are planning any of the activities that are related to these licenses.
For example, a french bakery specializing in authentic French pastries and bread, and without alcohol, music, or entertainment might only need the basic Premise and Signboard License, assuming it doesn't seek official Halal certification.
Once you secure these licenses, you are set to start operations.
5. Restaurant Operations and Ongoing Compliance
Once your restaurant is up and running, it is crucial to maintain compliance with Malaysian regulations.
This includes maintaining proper financial records, filing tax returns, ensuring timely payments for taxes and social contributions for employees, and license renewals.
For instance, the business premise license is valid for one year and you must renew it before it expires. Otherwise, it may result in fines and even business closure depending on severity.
Open Your Restaurant in Malaysia with Emerhub
Ready to open your restaurant in Malaysia? Emerhub’s local experts will gather the necessary documents and handle all the submissions on your behalf from company registration to licenses and compliance.
Our Emerhub App allows our clients to manage the registration and compliance processes online. Moreover, with tracking and timely reminders, we keep you on top of all the necessary renewals and tax payments, so your business can operate smoothly.
Feel free to book a free consultation with our local experts by filling out the form below.