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restaurant business licenses Malaysia

Business Licenses Needed for a Restaurant in Malaysia

Introduction

We wish opening a restaurant in Malaysia was as simple as cooking delicious food and serving it to paying customers, but the reality is that specific business licenses must be secured to operate legally.

On top of the usual mandatory permits, you may want additional licenses depending on your target audience and the ambiance you want to provide (in general, the fancier you get, the more it’s going to cost you).

fancy restaurant
Doesn’t get fancier than this.

This article provides a brief overview of the mandatory and common optional licenses needed to setup an F&B outlet in Malaysia. As we go over each license, we’ll address:

  • wait time
  • issuing governing body, and
  • best practices or considerations

Do note that we assume you have registered an SSM enterprise or Sdn Bhd, as those registration documents will be necessary to apply for business licenses. If you’re not familiar, don’t worry, contnue reading and there’ll be a link to our incorporation guide at the end. 🙌

Also, while we’ll provide the cost of licenses issued by federal bodies, locally issued licenses are priced at the discretion of Local Authorities, and there are too many of them to list!

Let’s go!

Key Takeaways:

  • A Premise and Signboard License is mandatory for every restaurant in Malaysia. The validity of the license is usually for one year and is issued by Local Authorities
  • On top of the mandatory license, business owners may need to apply for Halal Certification, Liquor Licenses, Wholesale, Retail, and Trade Licenses and Music and Performance Licenses
  • Halal Certification requires the food served in the restaurant be prepared and served in compliance with Islamic law.
  • Music Authors’ Copyright Protection Berhad License (MACP) is a mandatory license for restaurants that play copyrighted music. MACP determines the price of the licensing fee based on the type and size of the eatery. The application process for obtaining the license involves filling out a form and submitting necessary documentation.
  • licenses are a total headache – hire us to do it for you instead!

Mandatory License

Whether you plan to serve budget fried rice or wagyu steaks, every restaurant needs a valid premise and signboard license.

Overview of Premise & Signboard License

These licenses are issued by the Local Authorities (also known as Pihak Berkuasa Tempatan or PBT) that govern your jurisdiction. Together, the licenses acknowledge your premises meet required health and safety standards, and that your signboard is an honest representation of your business.

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It’s only dishonest if you have a dirty mind.

Requirements

To obtain the premise license as an F&B outlet, here are some requirements you need to meet:

  • Have your business registration documents from SSM
  • Undergo a Ministry of Health-certified food handling course
  • Receive typhoid injections for yourself and staff
  • Pass a premise inspection by officers from the Local Authorities

Different Local Authorities (MBP, DBKL, etc) will have different specifications for F&B premises concerning safety, pest control, customer facilities, location and even interior design. For example, some municipalities require different floor materials depending on whether or not the space is air-conditioned!

Your best bet is to pass a premise inspection to speak to a business consultant, call the Local Authority in question, or track down a checklist from an official online source.

Wait time, length of validity, and cost

Expect it to take anywhere from 2 to 4 weeks from the date of application for the Local Authorities to issue your premise and signboard license. In general, they are valid for one year from the date of issuance and can be renewed for another 12 months upon renewal application.

Some local authorities prorate the application based on the calendar year. This means it expires on 31 December regardless of when it is granted, though you are only charged for the number of months the license is active.

As far as pricing, not only does it differ by jurisdiction, but also by restaurant size and location. We’ll just use DBKL as an example here:

  1. Restaurants, coffee shops, eateries, milk bars, snack bars, bars, public houses, canteens and cafeterias:
    • (a) dining floor area does not exceed 90 square meters (RM200 per year)
    • (b) dining floor area does not exceed 120 square meters (RM300 per year)
    • (c) dining floor area exceeding 120 square meters (RM400 per year)
  2. Food courts (RM200 per year)
  3. Food stall within licensed premises (RM100 per year)

You can find DBKL’s official guidelines here, but be warned, it is in Bahasa Melayu and of course only applies to those whose premises are within DBKL’s jurisdiction.

Optional Licenses

Here’s where budget fried rice or wagyu steaks will influence what additional permits you may need. These licenses are not necessary by default and depends on the type of restaurant you want to operate in Malaysia.

1. Public House Liquor License

Issuing body: Local Authority

If you intend to serve alcohol strictly for on-premises consumption, then you’ll need to apply for a Public House Liquor License from your Local Authorities. You will need to obey certain restrictions, such as pass an interview with the police (just in case you were thinking of selling bootleg alcohol) and ensure your premises are a certain distance from mosques, schools, or any majority Muslim residential areas.

2. Halal Certification

Issuing body: Department of Islamic Development Malaysia (JAKIM)

If your main target audience are Muslims, getting Halal certification could give you a competitive edge. Just bear in mind that Malaysia is one of the strictest countries when it comes to Halal regulations and you cannot serve any alcohol on the premises.

After applying, JAKIM officials will inspect your premises and may take samples for lab testing (kindly sponsored by you). The fee for restaurants is RM200 per premise, and certification is valid for 2 years.

3. Music and Entertainment Licenses

Two related activities that need separate licenses here:

Music Authors’ Copyright Protection (MACP) License

Issuing body: Music Authors Copyright Protection (MACP) Berhad

If you blast K-pop hits nonstop in your restaurant to attract customers, you are profiting from the artists’ work and need to purchase a license from MACP. For restaurants, it will cost anywhere from RM 847 to RM1,376 and the license will be valid for one year.

Recordings of songs and live performances (by DJs or drunken patrons on karaoke nights) are charged differently.

Public Performance License

Issuing body: Music Authors Copyright Protection (MACP) Berhad

Live performances of copyrighted songs will need an additional Public Performance License, also valid for one year at the price of RM1,200 – RM27,000 depending on the number of patrons and whether or not the performance is the main draw of the business.

4. Wholesale, Retail, & Trade (WRT) License

Issuing body: Ministry of Domestic Trade (KPDN)

If you are a foreigner and plan to open the restaurant as a foreign-owned business (over 50% foreign ownership) you will need a WRT License which is designed to regulate foreign involvement in distributive trade in Malaysia. It costs RM3000, takes 1 – 3 months to be approved, and will be valid for two years.

Alternatively, consider partnering up with a local shareholder or director to avoid the hassle of applying for this license, and enjoy the benefits of being legally recognised as a local business.

5. Private Car Park License

Issuing body: Local Authority

Say your restaurant is in a busy area where parking is scarce and there is open land nearby that can be used as a dedicated parking lot. You’ll need to plan out the arrangement of the parking lot just like you would for the floorspace in your restaurant and submit these to your Local Authorities. And just like with a restaurant, officials will come to inspect that the car park is up to standards.

Tell MISHU your business license needs

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If you plan to apply for businesses licenses for your restaurant, consider engaging MISHU to do it on your behalf. Government officials melt at our smile – see above for a free preview!

As promised, here’s our in-depth guide to incorporating a Sdn Bhd in Malaysia.

FAQs about licenses needed to open a restaurant in Malaysia:

  • What business licenses are required to open a restaurant in Malaysia?
    💡At the very least, any restaurant operating physically needs a valid premise and signboard license issued by their Local Authorities.

  • What is a Signboard License in Malaysia and what are the necessary documents?
    💡It is a license acknowledging that your signboard is an honest representation of your business and meets the safety requirements set by the Local Authorities. A full list of required documents can be found here.

  • What are other licenses needed to open a restaurant in Malaysia?
    💡Other licenses are optional, and include Halal Certification, Liquor Licenses, Car Park Licenses, WRT Licenses, and various Music and Performance Licenses

  • What are the standard requirements of a WRT license?
    💡The business applying for a WRT license must be incorporated in compliance with the Company Act 2016, have RM1,000,000 in paid-up capital, and already have prior approval from Local Authorities.

  • Should I apply for all the business licenses stated?
    💡No, a better approach would be to determine your needs and then map them to necessary licenses. At any rate, a premise cannot have both Halal Certification AND a Liquor License in Malaysia.

4 thoughts on “Business Licenses Needed for a Restaurant in Malaysia

  1. Hi, I have reached out on your WhatsApp regarding licenses. I am opening a restaurant in December, it’d be great if you can reach out to me on the necessary licenses required for my premises. Thanks!

    Best regards,
    Tristan Chai

    1. Hi Tristan,

      Thanks for getting in touch.

      Yup, we have confirmed your message has gone through to our client servicing team. Don’t forget to invite us to your grand opening!

    1. Hi Paudzi,

      Thanks for getting in touch.

      Yes, we do, and would be happy to assist you. Our client servicing team will be getting in touch shortly.

      Take care and we wish you a smooth application!

      The MISHU Editorial Team

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