🇲🇾 Malaysia · reviewed 2026-10-09
Can foreigners own a business or franchise in Malaysia?
Two regimes apply to a foreign brand that wants its own stores in Malaysia: the Franchise Act for franchising, and KPDN's distributive trade guidelines for owning outlets. The second decides whether a foreign-owned company may run restaurants, and at what capital.
Food and beverage outlets
- Foreign-owned restaurants fall under the 'specialty store' category of KPDN's Guidelines on Foreign Participation in the Distributive Trade Services. The company must be incorporated in Malaysia and hold shareholders' funds of at least RM1 million per outlet. No fixed Bumiputera equity is required, but Bumiputera director(s) must be appointed. Official · MIDA, Distributive Trade booklet, 2023-11-01
- 'Non-exclusive' restaurants and bistros are on the list of activities closed to foreign participation, so full foreign ownership is open to single-brand concepts only. Official · MIDA, Distributive Trade booklet, 2023-11-01
- Every foreign involvement in distributive trade, including each new outlet, relocation or expansion, needs KPDN approval, issued after the Wholesale and Retail Trade Committee approves it. A company more than 51% foreign-owned needs at least RM1 million in capital. Official · MIDA, Distributive Trade booklet, 2023-11-01Secondary · New Straits Times, 2026-01-22
Rules under review
- On 22 January 2026 the deputy domestic trade minister told Parliament that KPDN is reviewing the 2020 distributive trade guidelines, including outlet-size thresholds for foreign F&B outlets, after a rush of foreign specialty-store brands in 2024. No date was given for new rules. Secondary · New Straits Times, 2026-01-22
Structures franchisors use
- Master franchise to a Malaysian company: the franchisor still needs section 54 approval and registration, but owns no outlets and avoids the distributive trade capital rules.
- Foreign-owned specialty-store company for flagship outlets, with RM1 million per outlet and KPDN approval for each.
- Joint venture with a Malaysian partner, where the partner brings sites, Bumiputera directors and local operations.
More on Malaysia
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