How to Start a Restaurant in Malaysia
- Chow Ping
- 2 days ago
- 6 min read
Half of all F&B businesses in Malaysia don't survive past their fifth year.
You won’t be one of them.
But those guys that failed? Usually, it wasn’t the food (although sometimes it was). They failed because the owner didn't build a firm foundation first.
So before you start hunting for a shophouse or obsessing over your logo, read this first.
How to start a restaurant in 10 steps
Step 1: Nail your concept before anything else
What kind of restaurant are you opening?
Quick-service (think mamak, fast food, grab-and-go)? Midscale (casual dining, set lunch crowd)? Upscale (tasting menus, white tablecloths, Instagram-worthy plating)?
Pick one. Then get specific about who you're serving.
A restaurant that tries to please everyone ends up pleasing no one. Define your customer — and build everything around them.
One more thing: don't chase trends. Mochi donuts and Korean corn dogs have their moment, then they don't. Build a concept that outlasts the hype.
Jeff Bezos once said he gets asked all the time what's going to change in the next ten years — but almost never what's going to stay the same. His answer: that second question is actually the more important one, because you can build a business around things that are stable over time.
The same logic applies to your restaurant. People will always want food that's affordable, convenient, and familiar. People will always celebrate milestones over a good meal. Build your concept around those constants — not around whatever's trending on TikTok this month.
Step 2: Write a business plan
Not the most glamorous step. But skipping it is how people end up burning through their savings before the third month.
Your business plan should cover:
Your concept and target market
Menu and pricing
Startup costs and funding sources
Monthly operating expenses (rent, salaries, utilities, ingredients)
Financial projections — when do you expect to break even?
Staffing plan
Marketing strategy
Restaurant margins are thin. Every cost counts — down to your napkins, your cooking oil, and your POS subscription. Map it all out on paper before you spend a single ringgit.
Step 3: Choose your business entity
You need a registered business entity before you can apply for any licence or open a corporate bank account.
In Malaysia, you have four options:
Sole Proprietorship / Conventional Partnership — cheap and easy to set up, but you're personally liable for business debts. If the restaurant goes under, creditors can come after your personal assets.
Limited Liability Partnership (LLP) — offers some liability protection at a lower setup cost than an Sdn Bhd.
Sdn Bhd — the recommended option for most restaurant owners. It separates your personal assets from your business, looks more credible to banks and suppliers, and gives you room to grow.
Foreigners can only set up an LLP or Sdn Bhd. Sole proprietorships and conventional partnerships are for Malaysian citizens only.
Not sure if you should register as a Sole Prop of a Sdn Bhd? Take our Should you register your company as a Sole Prop or Sdn Bhd? quiz here.
Step 4: Register with SSM
Once you've decided on your entity, register with the Companies Commission of Malaysia (SSM).
Sdn Bhd → register via MyCOID (mycoid2016.ssm.com.my). Incorporation fee starts from RM1,010.
Sole Prop / Partnership → register via Ezbiz (ezbiz.ssm.com.my). Fees from RM30–RM60.
You'll need your proposed business name, registered address, director and shareholder details, and your business nature (F&B / restaurant).
After incorporation, register for corporate tax with LHDN, and SST if your annual revenue hits RM500,000 or above.
Need help with choosing your business entity or your SSM registration?
Step 5: Find and secure your location
Your location will make or break your restaurant. Before you fall in love with a shophouse, check these:
Zoning — not every commercial lot is approved for F&B operations. Verify with the local authority (PBT) before signing anything.
Practical requirements — does the space support exhaust systems, grease traps, and adequate ventilation? These are non-negotiable for kitchen operations.
Layout — a well-designed restaurant typically allocates 45–65% of space to the dining area, around 35% to the kitchen and prep area, and the rest to storage. Don't squeeze your kitchen because a cramped kitchen kills service speed.
Lease terms — read everything. Check for restrictions, permitted use clauses, and renovation rights. Get a minimum 12-month tenancy agreement; you'll need it for your licence applications.
Other things to consider: foot traffic, parking availability, proximity to competitors, and signage visibility.
Step 6: The mandatory licences
Once you have your premises locked in, here's a list of licences and permits you’ll need before you can legally open your doors.
Premise & Signboard Licence (Composite Licence)
Issued by your local authority (PBT) — DBKL if you're in KL, MBPJ if you're in Petaling Jaya, and so on. They'll inspect your premises to make sure it meets hygiene and safety requirements. Processing takes roughly two to four weeks if your documents are complete. Valid for one year; renew annually.
Food Handler Certification + Typhoid Vaccination
Every staff member who handles food must complete a Ministry of Health-approved food handler training course (minimum three hours, available online and onsite). Cost: around RM50 per person. They also need a typhoid vaccination from a registered medical practitioner. Keep digital copies of all certificates — health inspectors will ask for them.
Fire Certificate (BOMBA) Required for designated premises under the Fire Services Act. BOMBA will check for proper fire extinguishing equipment, clear emergency exits, and functional emergency lighting. Renew annually.
Step 7: The optional-but-maybe-not licences
Depending on your concept, you may need some or all of these.
Halal Certification (JAKIM)
If you want to use the word "Halal" in your branding or marketing, this is mandatory. It requires strict sourcing from JAKIM-recognised suppliers, kitchen segregation, and documented SOPs. Budget three to six months for the process, and at least three months of purchase records before you even apply. Note: you cannot hold a Halal certification and a liquor licence simultaneously.
Liquor Licence
Applied for through your local authority. Before signing your lease, check whether your PBT approves liquor licences for that location. Some areas have distance restrictions from schools or places of worship.
Music & Entertainment Licence
If you're playing background music — even Spotify through a speaker — you need licences from MACP (Music Authors' Copyright Protection) and PPM (Public Performance Malaysia). Fees depend on your floor area. Contact them with your floor plan to confirm your annual cost.
Step 8: Special requirements for foreigners
Foreign-owned F&B businesses face additional requirements on top of everything above.
You must apply for a Wholesale and Retail Trade (WRT) Licence from the Ministry of Domestic Trade (KPDN). This requires:
A minimum paid-up capital of RM1,000,000
A restaurant concept that is "unique" and does not directly compete with local businesses (think authentic French cuisine, specialist Arabic food, and so on)
Budget one to three months for WRT approval. Engage a professional services firm (like us!) to help navigate the process. The paperwork is substantial.
Step 9: The practical stuff
Licences sorted. Now let's talk about actually running a restaurant.
Fit out your space
Renovations are typically your largest startup cost. Get multiple contractor quotes, and make sure your fit-out meets BOMBA's fire safety requirements from day one; retrofitting later is expensive.
Buy your kitchen equipment
Stoves, ovens, fryers, refrigerators, prep surfaces, utensils. Consider buying quality used equipment to manage costs early on.
Build your supplier relationships
Your food is only as good as your ingredients. Find reliable suppliers who can deliver consistently and at the right volume. Maintain close contact — last-minute supply issues are inevitable, and a good relationship is your buffer.
Design your menu
Keep it tight. A shorter menu means fewer ingredients to source, less waste, and a faster kitchen. Describe dishes clearly, include photos where you can, and flag dietary options (Halal, vegetarian, vegan).
Hire your team
At minimum, you'll need a manager, a head cook or chef, line cooks, and front-of-house staff. Hire your manager at least a month before opening — they'll help you set up operations. Your kitchen team sets the standard for consistency, so invest in the right people here.
Set up your POS system
A good POS system handles orders, payments, table management, inventory tracking, and sales reporting. It also makes your life significantly easier during LHDN audits and compliance checks. Research your options before opening day because switching systems mid-operation is a headache.
Market before you open
Don't wait until opening day to tell people you exist. Build your social media presence early. Post your concept, your space taking shape, your menu previews. Invite food bloggers and micro-influencers to your soft launch. Create buzz before the doors open — not after.
Step 10: Ongoing compliance
Opening day is not the finish line. Every year, your restaurant must stay compliant with:
SSM — annual registration renewal (sole prop / partnership)
PBT — annual premise and signboard licence renewal
BOMBA — annual fire certificate renewal
LHDN — annual tax returns and CP204 tax estimate submissions
EPF, SOCSO, PCB — monthly contributions if you have employees
SST — bi-monthly filing if your revenue exceeds RM500,000
Starting a restaurant in Malaysia is genuinely exciting. It's also genuinely complex. The food part — the part you're probably passionate about — is only part of it. The legal, financial, and operational groundwork is what keeps the whole thing standing.
Get that right, and you give your restaurant a fighting chance.
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