Human Resource

While it’s well-known that foreign businesses must obtain a Wholesale, Retail & Trade (WRT) license to operate in Malaysia, most sources only mention a locally incorporated Sdn Bhd and RM1 million paid-up capital as application eligibility criteria.

In truth, these are baseline requirements and additional conditions often apply that make securing a WRT license less straightforward.

Below, we provide a breakdown of additional requirements for six common foreign businesses.

Note: Readers who prefer official sources can refer to the Malaysian Investment Development Authority’s (MIDA) guideline for foreign investors in distributive trade.

Let’s begin.

Baseline requirements

Let’s start with a quick recap of this for unfamiliar readers.

Regardless of industry, every WRT license applicant must:

• be incorporated as a Sdn Bhd under the Companies Act 2016, and
• have a minimum paid-up capital requirement of RM1 million per outlet

Beyond this baseline, different types of businesses must meet different additional requirements.

Restaurants / F&B outlets

In addition to baseline requirements, foreign-owned F&B businesses must demonstrate that their venture will not be in direct competition with small local food operators, ideally by introducing novel culinary items and experienced that don’t currently exist in the Malaysian market.

This is done through the additional supporting documents requested which consist of:

• a full menu

• photos of the premises and / or products

• documents certifying the chef’s or key employee’s qualifications and experience

In an ideal situation, the proposed F&B establishment will serve food from the applicant’s home country with decorations to match.

Specialty stores

Specialty stores are outlets that focus on selling a single primary product, which in addition to restaurants can include:

• household / personal goods

• furniture

• household appliances

• electrical appliances

• healthcare products

• optical goods

• footwear

• clothing and apparel

• sport goods

• books

• jewellery

• electronic goods

• motorcycles/motor vehicles

• small machinery

• pharmacies

In addition to baseline requirements, the foreign business must similarly demonstrate they will not be direct competitors with local equivalents, fill a market gap, offer unique / exclusive products, and transfer of technology or skills to Malaysians.

Convenience stores

Convenience stores are small-format retail outlets with a sales floor area typically below 180 square meters, and in addition to baseline requirements are subject to additional structural and equity restrictions:

• must operate under a franchise model in accordance with the Franchise Act 1998

• foreign equity is limited to 30%, with at least 30% reserved for Bumiputera or Malays

• only Malaysian citizens may act as franchisees

• the master franchisor may only operate up to 30% of total outlets as direct outlets

These measures ensure that convenience stores promote local participation (considering they are often close to residential areas) while maintaining regulatory oversight.

Hypermarkets

A hypermarket is defined as a self-service distribution store with a sales floor area of at least 5,000 square meters, and due to their immense socio-economic impact, are subject to extensive regulatory and operational controls:

• at least RM50 million paid-up capital

• 30% Bumiputera equity, or alternatively:

  • Contribution of 0.1% of annual revenue to a trust fund for 10 years

  • Limitation of non-Malaysians to 10% of management positions

• at least 30% of SKUs must be from Bumiputera or Malay SMEs

• at least 50 parking bays per 1,000 sqm of floor area

• feasibility and impact study involving at least 200 local retailers and residents

• operating 10am–10pm on weekdays and 10am–12 midnight on weekends and public holidays

• located within jurisdictions with at least 250,000 residents

• cannot operate within 1.6 km of residential areas

Superstores

These are defined as retail outlets with a sales floor area between 3,000 – 4,999 square meters, though they may operate with a minimum of 1,000 square meters within certain jurisdiction. As a smaller version of a hypermarket, superstores share many operational requirements on a smaller scale:

• at least RM25 million paid-up capital

• at least 30% of SKUs must be from Bumiputera or Malay SMEs

• at least 50 parking bays per 1,000 sqm of floor area

• feasibility and impact study involving at least 200 local retailers and residents

• operating 10am–10pm on weekdays and 10am–12 midnight on weekends and public holidays

• located within jurisdictions with at least 200,000 residents

Departmental stores

Departmental stores are retail outlets without a fixed sales floor area but are below the range of superstores, and additional requirements include:

• at least RM20 million paid-up capital

• at least 30% of SKUs must be from Bumiputera or Malay SMEs

• minimum 50 parking bays per 1,000 sqm of floor area

• feasibility and impact study involving at least 200 local retailers and residents

• operating hours of 10am–10pm on weekdays and 10am–12 midnight on weekends and public holidays

• located within jurisdictions with at least 150,000 residents

• Cannot operate within 3.5 km of residential areas

That’s it from us, and we wish you a smooth application 🙂

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