Trust me you wouldn’t want to face legal issues while trying to run your restaurant business. What do you think are the important laws that you need to follow before you set up your restaurant? How much do you think you need to spend to get each of them?

The 9 licenses/ permits that you need to have initially to open your restaurant are – business registration, premise license, food handling license, halal certification, liquor license, signboard license, fire department approval, environmental health approval, and music license. 

Read more to find out in detail about each of these licenses and how much cost you would have to bear to get them. 

1. Business Registration

Before opening any type of business, including a restaurant business, you must first register your company with the Companies Commission of Malaysia (SSM). You can choose to register as a sole proprietorship, partnership, or private limited company (Sdn Bhd). The type of registration depends on your business structure and goals.

• Sole Proprietorship or Partnership: Ideal for small businesses or family-owned restaurants.
• Private Limited (Sdn Bhd): More suitable for larger restaurants or if you plan to scale your business.

For a sole proprietorship, the registration cost is around RM30 to RM60 per year, while for a private limited company, expect to spend about RM1,000 to RM5,000 depending on professional fees.

In 2023, over 1.2 million businesses were registered with SSM, with many being small restaurant operators (source: SSM Annual Report 2023).

2. Premise License

Once your business is registered, the next step is applying for a Premise License from your local city council. This license allows you to use a specific premise as a restaurant. Each state in Malaysia may have its process and costs, so it’s crucial to check with your local council.

The application requires:

• Business registration certificate
• Layout plan of the premises
• Fire safety approval (discussed later)

The cost of the application to get a premise license is RM3,000, depending on the size and location of your restaurant.

3. Food Handling License

In Malaysia, if you are operating a restaurant business, all food handlers must undergo training and possess a Food Handling Certificate. This is required under the Food Hygiene Regulations 2009.

To get the certificate, food handlers must attend a course by an accredited food handling training provider. The cost is typically RM50 to RM80 per person, and the certificate is valid for life. However, regular refreshers are recommended.

Also, ensure that your staff gets their Typhoid Vaccination, as required by Malaysian law for all food handlers. This vaccination typically costs RM50 to RM80 per person and needs to be renewed every three years.

4. Halal Certification

If you plan to serve Halal food, you need to apply for Halal Certification from Jabatan Kemajuan Islam Malaysia (JAKIM). The certification process ensures that your food, ingredients, and preparation methods comply with Islamic dietary laws. Though it’s not compulsory but its better to have it to attract hygiene-conscious customers. 

The application can be quite detailed and requires:

• Details of food ingredients and suppliers
• Cleanliness standards for food preparation
• Separate storage and utensils for Halal food

The cost of Halal certification depends on the size of your business. For small restaurants, expect to pay around RM100 for the application. However, there might be other costs associated with getting the halal certificate. 

According to JAKIM, over 8,500 Halal-certified restaurants were operating in Malaysia in 2023, a testament to the growing demand for Halal dining (source: JAKIM Halal Statistics 2023).

5. Liquor License

If you plan to sell alcoholic beverages, you must apply for a Liquor License from your local council. The requirements for this license can vary depending on the state. Some states are stricter due to religious and cultural sensitivities, so you need to understand the local regulations carefully.

To get this license, you will need:

• Business registration documents
• Premise layout and location
• Approval from the police and fire department

The cost of a liquor license can be RM 1000 per year depending on the type and volume of alcohol you plan to sell. You need to renew it every year. 

6. Signboard License

In Malaysia, even the signboard of your restaurant requires approval. You must apply for a Signboard License from the local council, and the design must follow certain rules. For example, if your signboard contains Bahasa Malaysia, it must be prominent, and any other language must be in smaller fonts.

The price of a signboard license in Malaysia ranges between RM 1200-1500. 

7. Fire Department Approval

Fire safety is a critical requirement when setting up a restaurant. You need to get approval from the Fire and Rescue Department of Malaysia (BOMBA) before opening your business to the public. BOMBA will inspect your premises to ensure they meet fire safety regulations, such as having adequate fire extinguishers, fire exits, and fire alarms.

The inspection and approval fee can range from RM100 to RM500 depending on the size of your restaurant. If you fail to meet the fire safety standards, you’ll need to make the necessary adjustments before getting approval.

8. Environmental Health Approval

Your restaurant must also comply with Environmental Health Regulations to ensure that it meets hygiene and sanitation standards. Local health officers will inspect your kitchen, food storage areas, and waste disposal systems. They will assess whether your restaurant complies with hygiene requirements to avoid any potential health risks to customers.

The cost for health inspections is typically around RM200 to RM500.

9. Music License

If you plan to play music in your restaurant, whether recorded or live, you’ll need a Public Performance License (PPL). This license is required by Music Rights Malaysia (MRM) to ensure that musicians and songwriters are compensated for the use of their music.

The annual fee for a music license depends on the size of your establishment and the type of music played, usually ranging from RM300 to RM1,000.

How Much Do These Licenses Cost Altogether?

The total cost to acquire all the necessary licenses and permits to open a restaurant in Malaysia can range from RM8,000 to RM30,000, depending on your restaurant’s size and location. For small restaurant operators, the cost will likely be on the lower end, but for larger establishments, these costs can add up quickly.

In 2022, the Malaysian restaurant industry generated over RM32 billion in revenue, highlighting the growth and potential of the sector (source: Statista, 2023). Starting your restaurant business with the right licenses and permits will ensure you stay compliant and can focus on growing your restaurant.

Setting up a restaurant business in Malaysia involves securing multiple licenses and permits, but each one is vital for operating legally and safely. While the process can seem overwhelming, getting the proper approvals will protect your business from legal issues in the future. Make sure you research local regulations and stay on top of renewals to keep everything running smoothly.

By taking care of these important details, you can focus on what matters—serving great food and providing excellent service to your customers!