A Quick Guide To Premise License Applications In Malaysia

Any business in Malaysia that requires physical location must apply for a premise license from their Local Council (PBT), and many activities are subject to activity-specific premise rules by PBT.

Failing to account for these can result in committing to a premise doomed to be rejected.

Drawing on our experience facilitating license applications across PBTs, this guide breaks down what business owners need to know about premise license applications.

Here’s how we’ve broken it down:

• location restrictions
• layout requirements
• signboard approval
• license fee estimates
• required documents, and
• steps in the application process

Let’s begin.

Premise location requirements

This is the very first step you should take when finding a suitable premise, as the last thing you want is to sink thousands into renovations only to learn it is impossible to operate here. 

The four most important considerations are whether your business activities:

• can operate from a residential premise
• cannot operate next to other types of businesses
• is restricted to ground floor premises, and
• is restricted to industrial zones

Operating from residential premises

Most councils have a list of permitted home-based businesses typically restricted to non-intrusive services like tuition centres and restaurants.

For example, Selangor permits a few different categories of small-scale businesses to be carried out from residential premises, and other states and areas will have a similar list.

While the approved activities may differ between PBTs, one common requirement across all are written agreements from neighbours consenting to your proposed commercial activiy.

If your business is not on the approved list, you will need to operate from a commercial premise.

Restriction of neighbouring businesses

If you’ve ever noticed how shoplots tend to consist of similar businesses, it’s not just a coincidence as it’s often due to PBT-imposed proximity rules to prevent hygiene risks, contamination, and noise pollution.

For example, in Selangor F&B outlets and clinics can’t operate next to pet shops and automotive workshops, and many PBTs have similar restrictions in their jurisdictions.

Restriction to ground floor premises

While it can be tempting to rent first floor premises due to lower rent, many PBTs restrict certain activities to the ground floor. For example, PBTs across Selangor generally restrict massage and relexology centres from operating upstairs, but it’s not the case in Perak.

You’ll usually find the list of restricted activities based on what the PBT calls their ‘high risk businesses’ or ‘perniagaan berisiko’ which means it’s dangerous or has a higher risk of supporting illegal activities.

Restriction to industrial zones

While this obviously applies to any manufacturing operation, some PBTs like MBPJ also restrict automotive repair shops to commercial premises in industrial areas, so if your business involves heavy machinery or produces a lot of noise, it would be wise to verify if your PBT requires it to operate in industrial zones.

Once you have a premise that complies with PBT location rules, time to address layout requirements.

Premise layout requirements

While many businesses are simply given general guidelines to ensure the floor layout is safe and exits are free from obstructions, many activities are subject to specific requirements. 

There are too many to list them all, so we’ll address two common use cases.

Restaurant outlet layout

Due to the high-risk of disease, F&B outlets face among the strictest and most thorough layout requirements for a ‘non technical’ business.

Here’s a simplified example of typical PBT requirements for a premise that wants to operate as a restaurant:

Dining area

• Flooring must be durable, non-slip, and easy to clean, especially for non-air-conditioned spaces
• Walls and ceilings should use smooth, washable materials
• Tables and surfaces must be non-porous and easy to maintain
• Adequate waste bins must be provided
• Cleanliness of the dining area and furniture must be maintained at all times

Kitchen and food preparation area

• Floors and walls must be water-resistant, easy to clean, and suitable for food preparation environments
• A clean water supply is required for food preparation and washing
• Dishwashing facilities must be sufficient for the scale of operations
• Hot water is typically required for cleaning
• Food preparation surfaces must be made of hygienic materials such as stainless steel
• Improper practices (e.g. washing utensils in unsuitable areas) are strictly prohibited

Restroom facilities

• Adequate toilet and washing facilities may be required depending on the business
• Surfaces must be easy to clean and maintain
• Handwashing facilities (e.g. soap and drying methods) must be provided
• Cleanliness and proper signage are mandatory

As a floor plan is a required supporting document and the premise is inspected by PBT officers, compliance is non-negotiable!

Renovations adding partitions

Regardless of business activity, renovation approval is often required before your application can proceed, especially if your plan includes additional partition walls not part of the building’s original structure.

This requires engaging a certified architect to draw a floor plan like the following example:

Signboard design rules

Many PBTs require business premise licenses to be applied for with a signboard license under a composite license application.

This means the business should also ensure their signboard complies with PBT requirements, and we do a full explanation of the topic in our guide to PBT signboard rules, but in summary, make sure your sign:

• prioritises Bahasa Melayu and has obtained Dewan Bahasa & Pustaka approval
• is of a suitable dimension so it doesn’t obstruct windows and facades
• is clear, accurate, and displays required business information

Yes, this includes where to display that all-important ‘dimiliki oleh’

Premise license fee estimates

This question is impossible to answer as each PBT has its own formula for calculating license price according to the business size and type, so price often varies per application even for the same license.

In our experience, annual licenses from PBTs tend to cost around:

1. RM200 – RM500 for office / retail outlets
2. RM500 for F&B outlets
3. RM1,000 for factories and industrial sectors

Supporting documents

These supporting documents are generally required for any business premise license application

• business registration documents
• copy of applicant’s photograph
• copy of the applicant’s MyKad or passport
• location plan (can be done with Google Maps screenshot)
• floor plan (A4 with measurements in metres)
• colour photographs of premise exterior, interior, and toilet
• copy of lease agreement
• latest paid assessment tax (cukai pintu) & land bill (cukai tanah)
• coloured visual of business signboard in A4 size
• verification from Dewan Bahasa dan Pustaka (DBP)
• letter of support from local BOMBA Department

Depending on your business activity, the PBT may require additional letters of support or licenses such as WRT / USS licenses for foreign-owned operations or MIDA manufacturing licenses for factories.

Steps in the application process

Applications are submitted either physically at the PBT offices, or through their respective online licensing portals.

From there, the steps are generally as follows.

1. PBT reviews documents
   • Incomplete → Rejected
   • Complete → Approved in principle
2. Make payment & print license (Applicant)
3. Inspection scheduled & conducted (PBT)
4. Inspection result
   • Not compliant → Fix issues → Re-inspection
   • Still not compliant → Rejected
   • Compliant → Proceed
5. Final approval issued

Once issued, premise licenses are valid for one year and must be prominently displayed on location.

And that’s it from us. We wish you all the best with your premise license application 😊

Let MISHU handle your premise license application

The MISHU licensing team has handled hundreds of PBT license applications and renewals for local and foreign businesses across different industries, and we’d love to help you too!