Whether it’s a roadside ayam penyet stall or a high-end steakhouse, the processes and licenses required to open an F&B outlet in Malaysia are pretty much the same.
Now for the not-so-good-news.
Knowing this, we’ve written this guide to equip you with a high-level understanding of the ins and outs of setting up any F&B outlet in Malaysia both as a local and foreigner.
Here’s how we’ll break it down:
- Business entities
- Mandatory licenses
- An overview of the application process
- A general business plan template you can use
- A shameless pitch to engage our help!
Let’s begin.
Choosing a business entity
We’ve written this guide to cater to even the most inexperienced of entrepreneurs, so readers already familiar with this topic are free to skip to the section on F&B licenses.
For readers new to business, you need a business entity to apply for licenses and operate your restaurant.
SMEs in Malaysia can choose from four types of structures:
- Enterprises
- Conventional partnerships
- Limited Liability Partnerships (LLP), and
- Sendirian Berhads (Sdn Bhd)
Foreigners are limited to LLPs and Sdn Bhds, but locals can choose any of the four options.
We won’t go into too much detail, so here’s a quick side-by-side comparison of key details for each entity.
:
| Criteria | Sdn Bhd | LLP | Conventional Partnership | Sole Proprietorship |
| Formation Costs | Highest | High | Low | Low |
| Owner(s) | Shareholders own ‘shares’ in the company | Partners own shares in LLP profits | Partners directly own business | Sole owner directly own business |
| Number of Owners | Minimum 2, maximum 50 | Minimum 2, no maximum limit | 2 to 20 partners (except certain industries) | One |
| Liability for Business Debts | Business entity | Business entity | Owners | Owner |
| Tax on Profits | Corporate tax (15-24%) | Corporate tax (15-24%) | Personal income tax (0-30%) | Personal income tax (0-30%) |
| Compliance Requirements | Highest | High | Lower | Lowest |
Here are the most important takeaways:
- Sdn Bhds and LLPs cost more but grant owners protection from business debts.
- Conventional Partnerships and Enterprises cost less but owners are personally liable for business debts (meaning your personal assets can be seized to pay creditors).
- The corporate income tax rates of Sdn Bhds and LLPs means greater tax obligations at lower profit levels but lower tax obligations at higher profit levels.
We’ve got dedicated guides on these topics for those interested:
- Comparing four main business entities for SMEs in Malaysia
- The Sole Proprietor’s guide to Income tax in Malaysia
- 5 top signs it’s time to upgrade your Enterprise to a Sdn Bhd
In general, we always recommend Sdn Bhds for the invaluable protection from debts, and we’d be happy to chat and advise you on the best choice in your specific situation.
Now let’s check out the mandatory restaurant licenses.
Mandatory F&B business licenses
Here are the various licenses your business will need to apply for before operating as a restaurant.
:
| License Type | Issuing Body | Requirements | Validity | Wait Time |
| Premise & Signboard License | Local Authority (Pihak Berkuasa Tempatan – PBT) | Business registration (SSM), MOH-certified food handling course, typhoid injections, premise inspection by Local Authority | 1 year | 2–4 weeks |
| Public House Liquor License | Local Authority | Police interview, premises distance from mosques, schools, and Muslim areas | 1 year | Varies |
| Halal Certification | Department of Islamic Development Malaysia (JAKIM) | Premise inspection, lab testing of samples (if needed), no alcohol allowed on premises | 2 years | Varies |
| Music and Entertainment Licenses | Music Authors Copyright Protection (MACP) Berhad | License for playing copyrighted music (MACP License) and separate license for live performances (Public Performance License) | 1 year | Varies |
| Wholesale, Retail, & Trade (WRT) License | Ministry of Domestic Trade (KPDN) | Foreign-owned businesses (over 50%) | 2 years | 1–3 months |
| Private Car Park License | Local Authority | Parking arrangement plan, inspection of the car park | Varies | Varies |
| Food Handling Certification | Accredited training provider | Per individual food handler | Lifetime | Seven working days |
Let’s address common questions we get on this topic, starting with the most frequent 🙂
How much do these licenses cost?
We chose not to include costs in our table as premise and signage license fees can vary widely between areas, and we don’t know where you’re from!
We can say that in our experience, regardless of location:
- licensing costs for a locally owned restaurant will be well under RM10,000
- fr foreign-owned restaurants it will be just over RM10,000 because of the WRT license
What’s a Local Authority?
The local council of a district that sets their own guidelines for hygiene, spacing, and safety standards that businesses (including restaurants) must meet to qualify for a permit.
Local Authorities will be responsible for issuing:
- Premise and signboard permits
- Alcohol licenses (if applicable), and
- Private car park permits
Unfortunately, most Local Authority guides are only available in Bahasa Melayu, but we’re working on translating popular ones. Kuala Lumpur or Subang Jaya residents, you’re in luck!
What music can I play in my restaurant without a license?
The short answer is not much besides royalty-free stock music.
Otherwise, a music license is required whenever you control the playlist or have a set list of music to be played in your store.
If you play music in your establishment, you need to have a music license.
Extra reading: 8 FAQs about music licenses In Malaysia
Any requirements for foreigners opening restaurants?
Yes! Foreign-owned F&B outlets must obtain a WRT license which in turn requires:
- paid-up capital of at least RM1,000,000, and
- a restaurant concept that does not compete with local businesses
Alternatively, some foreigners partner with a local Malaysian so the business is technically locally-owned. The risks are obvious, so make sure you do this with someone you trust.
Extra reading: 12 FAQs on company registration In Malaysia for foreigners
3 steps to setting up a restaurant
While wait times will differ slightly between Local Authorities, this is how it works across Malaysia:
| Step | Time Taken | Necessary Documents / Fees |
| 1. Company Incorporation | 3 – 5 working days | Register on MyCoID and provide: 1. Proposed company name 2. Status (private/public) 3. Type of business 4. Registered/business address 5. Director/promoter details 6. Declarations Fee: RM1,010 |
| 2. Apply for Composite License (Premise + Signboard) | 15 – 30 working days | Submit to Local Authority: 1. SSM documents 2. Sale/tenancy agreement 3. Applicant’s ID photo 4. Office layout/photos 5. Fire Department letter 6. Signboard details Undergo premise inspection. Fee: Varies by municipality |
| 3. Food Handler Training | 7 working days | Minimum three hour course, can be both online and offline. Fee: Minimum RM50 / participant |
All licenses issued by the Local Authorities can usually be applied for simultaneously, so if you plan to serve alcohol, you can apply for your Public House license at the same time.
All in all, expect it to take about 6 – 7 months to go from zero to a fully operational restaurant, considering you will also need to find suitable premises, make renovations, and hire staff (a whole new source of headaches).
So now that you have a better idea of the technical aspects, let’s finish up with a more entrepreneurial topic.
Create a business plan for your restaurant
Ever heard of a business model canvas?
It’s an established framework used to determine the viability of a business idea, allowing entrepreneurs to filter out ones that lack potential.
It applies to all sectors, and you can use it to list nine key areas of your theoretical restaurant:
- Customer segments
- Value propositions
- Channels
- Customer relationships
- Revenue streams
- Key resources
- Key activities
- Key partnerships, and
- Cost structure
Use our free editable template below!
Ideally, your restaurant idea should have:
- a unique value proposition
- a clear path to revenue generation, and
- a clearly defined audience segment
If it looks good on paper and you’d like to take it to the next step, the MISHU team is always here to help you with the paperwork – for a price!
Let MISHU help register your restaurant
We’ve assisted literally hundreds of local and foreign business owners with setting up their F&B outlets in Malaysia, and we’re always hungry for more, if you’ll pardon the pun!