How to Set Up a Restaurant in Malaysia
Unless otherwise indicated, the Malaysia company stated in this article refers to a private company limited by share(s) (identified through the words ‘Sendirian Berhad?or ‘Sdn. Bhd.? formed and incorporated in Malaysia in accordance with the Malaysia Companies Act 2016.
Malaysians?love for food has created a large market in the food and beverage (F&B) industry. It is said there are more than 1,000 restaurants or caf?owned by foreigners in Kuala Lumpur alone.
Before a restaurant business can legally start operating, businesses are required to comply with some form of licensing, which could be general license, an industry/sector specific license or activity specific license which will be further elaborated in this article.
- Company Registration
While anybody can start a restaurant business in Malaysia, it is compulsory to first incorporate and register the business with the Company Commission of Malaysia (CCM) also known as Suruhanjaya Syarikat Malaysia (SSM) pursuant to the Companies Act 2016. The registration of a sole proprietorship and partnership in Malaysia is an option available for Malaysian citizens or Malaysian permanent resident holders only. Foreigners may choose to incorporate a company or register a limited liability partnership.
- Wholesale, Retail and Trade (WRT) License
Foreign-owned company intending to engage in distributive trade services in Malaysia, namely (1) retail, import & export, distributive trade; (2) restaurant; (3) franchise; (4) services & consultancy is encouraged and recommended to apply to the Ministry of Domestic Trade and Consumer Affairs (KPDNK) for the Wholesale, Retail and Trade License (WRT) license. Foreign-owned companies refer to companies in which more than 50% of its total shares are owned by non-Malaysians.
The WRT license is required by all the said business sectors before they can apply for a professional work permit. The minimum paid-up capital required for the application is RM1 million. The company must have a business premise license and a valid rental agreement and telephone line before it can apply for the WRT license. For newly incorporated company, you may be able to submit with a business plan and investment plan in Malaysia prior setting the office.
- Business Premises and Signboard License
If there is a need for a physical commercial premises for your restaurant business, you are required to apply for a business premises license with the relevant town council. To determine which town council has an authority over your premises, you are advised to provide us with a copy of an Assessment Receipt (Cukai Taksiran/Pintu) issued by the town council in respect of your premises. Typically, a business license granted by the local authority is valid for a period of one (1) year from the date of application approval/ renewal approval. Such license can be renewed every year by just paying the prescribed renewal fee.
Every registered business or company shall put up a signboard displaying the name and registration number outside the place of business. A signboard is essential as it represents a restaurant’s identity and plays a big role in branding your business. Under Malaysia law, it is compulsory to have a valid license for the signboard. A signboard license is typically valid for 1 year upon approval/renewal.
The requirements of the signboard are as follows:
(1) Clearly set out the nature of business in Malay Language (Bahasa Malaysia), together with your company name and business license number.
(2) Ensure that the signboard will not be mounted over any glass structure, window, façade or obstruct any view or walkway.
(3) Ensure there is no visuals of alcohol, cigarettes, or indecent photographs.
- Liquor License
If you are planning to sell alcohol of any kind in your restaurant, whether it is beer or hard liquor, it is mandatory under law to apply for a liquor license from the local town council. Liquor license is heavily emphasised by the government to ensure that only authorised establishments are selling alcohol.
There are different types of alcohol licenses available in Malaysia which you can apply depending on your business nature. If you were to open a business premise for real sale of alcoholic beverages for consumption within premises, you can opt for Public House License. For the consumption of alcohol within premises, the Beer House License in particular will be appropriate. If you are a restaurant operator, a Beer House License will be more appropriate for you.
- Halal License
In Malaysia, more than half the population practices Islam and eating Halal certified meals certified by Department of Islamic Development Malaysia (JAKIM).
If you are planning on opening a halal restaurant or you already have a restaurant and you are planning to offer halal food, you may contact the local Halal certification body for assistance and certification. You cannot simply just call your products “Halal?as you are required to follow the halal methods in preparing the food by meeting the requirements based on Islamic law that practiced in the state of processing, cooking foods and drinks.
It is of utmost importance for the restaurant owners to fully understand the concept of Halal Food. Using meat and ingredient vendors that are halal certified is of utmost importance to ensure complete Halal integrity. The authenticity of the certificate should also be checked out prior to deciding on a vendor. Application for the Halal Confirmation Certificate must be submitted directly to JAKIM (Jabatan Kemajuan Islam Malaysia) JAIN (Jabatan Agama Islam Negeri) or MAIN (Majlis Agama Islam Negeri), whichever one is relevant.
Only upon this certification will you be a certified Halal restaurant. As a business owner in Malaysia not looking to sell pork or alcohol related products, attaining a Halal License will be a wise choice to make.
- Food Handling Certificate
A food handling certificate is awarded to food handlers demonstrating that a person has the fundamental knowledge and skills required to handle food safely. Ministry of Health (MOH), Municipality Licensing, Majlis Perbandaran and Dewan Bandaraya in Malaysia require all food handlers to have food handling certificate Malaysia recognised by the MOH. To obtain this certificate, you are required to send the staffs to undergo food handling training and to ensure that your staffs are administered with anti-typhoid vaccination.
- Music Authors?Copyright Protection Berhad (MACP) License
Music plays a significant role in business and can contribute significantly to create a positive customer experience. If you intend to play music in your restaurant, this violates the “personal use?portion as it is now being use in a commercial setting. It is thus now illegal to play it without a music consensus or license. This is where the Music Authors?Copyright Protection Berhad (MACP) license comes into play. You will be required to apply for the MACP license depending on the category of your restaurant and type of music you will be playing, i.e. mechanical music, featured music or live music.
- Public Performance Malaysia (PPM) License
The Public Performance Malaysia (PPM) license is a specific license to get, as an added on from the MACP license. If your restaurant comes with live bands as part of what attracts your customer base, then you will be required to apply for the PPM license as well.
Kaizen, together with its associate firms in Malaysia, can help the clients to perform these compliances formalities so as to maintain the Malaysia company in good standing. Please call and talk to our professional accountants in Kaizen for further clarification.
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