Tips tricks and trades on opening up a small cafe in in Malaysia

You cant open a small cafe against the law. Foreigners cant own small restaurants/cafes.

You would have to trust a local business partner with all your cash. Rather like trusting your manhood in a Crocodiles mouth. Very unwise!

What nemodot has to say is iunfortunately true. Malasia does not support small business in F & B owned by foreigners. So unless you hve RM1 million and a big plan, Malaysia is not the place to expand your business.

The issue is about the size of the premises. The rule for 100% owned foreign F&B is that they should have a unique concept and a floor area of not less than 1500 square feet. 

You can potentially open a smaller business with one or more Malaysian nationals as your partners (they have to own at least 51%) but there again, the capital required in the company that needs to be set up is RM350,000.

This website provides some information:

http://malaysiabizadvisory.com/incorpor … y-sdn-bhd/

Gravitas, cant he take my company with everything already grandfathered in from the time before all these changes? Its approved as a food/restaurant Sdn Bhd and ready to go. No capital infusion problem because it exists under old rules.

Jade I will send you a Message since I cant say much in this thread. I think I can solve your problem.

cvci - you are very naitive. Of course the new owner would need a business registration to run the establishment.  So many people are not reading between the line and loosing oodles of money by trusting people who say they can make anything happen.  Actually, that is what I admire about Malaysia. They kick arse and don't apologise.  Afterall, it's their country and they decide what happens. So any whingers should check out that they are guests and have no rights.

Gravitas wrote:

cvci - you are very naitive. Of course the new owner would need a business registration to run the establishment.  So many people are not reading between the line and loosing oodles of money by trusting people who say they can make anything happen.  Actually, that is what I admire about Malaysia. They kick arse and don't apologise.  Afterall, it's their country and they decide what happens. So any whingers should check out that they are guests and have no rights.

Yes, when the company is NEW. According to our company secretary and chartered accountant, we can sell our existing company which is going to involve changing directors on a piece of paper, not any new registration, capital, mission plans because those already exist in the existing company.

Such a sale does not include workpasses for directors as those go to the individual, not the company, and have to be applied for separately. But we are only talking about the company itself, not any promise or takeover of location permits, sales/income and business opportunity, workpasses and the like.

Our Sdn Bhd was organized under the rules of 2005 which are far different than rules today and those remain unchanged. Someone buying our company, yes it solves most of a newcomers problems, especially one that wants to be in the restaurant business since of our three mission approvals, food/restaurant is one of them.

I am afraid there are some misleading statements in what you have written.  The Director's work permit "belongs" to being a director of the company. If that person is no longer in that role, at least they wont be able to renew it. It should be relinquished at the time of the sale and the company secretary is legally bound to take care of things like that to keep within the law. It just needs the passport sending in to immigration and the pass is cancelled.  The work passes are only now given if the company has a certain level of capital and immigration rules change and apply on a day to day basis and are not "back dated" arrangements.

Buying a shell company costs practically nothing and anyone can buy one. Its just a concept and a name. However to operate a business it needs to have paid up capital these days and that is how the rules have changed (the capital has to be returned to the balance sheet for each report and accounts i.e. annually).

There are so many failed F&B businesses it is amazing. They come and go even more quickly now. I saw one last only 4 months just lately and then close down.  The cost of raw materials has gone up I guess, and the amount of foreign workers has gone down and the illegals are being rounded up.  So  I guess the clientelle has changed drastically in numbers and requirements.

Suggest the details of business handover are checked out thoroughly to avoid any surprises. Business owners I know have had to up their paid up capital from RM500k to RM1m just recently, so that tends to suggest old rules no longer apply and requirements do change. However, it only came to light when they wanted to renew their employment pass. No dosh - No pass.

Gravitas,

Nothing is misleading at all. Read my post, i said workpasses were not included because they go with the individual, not the company. So whats misleading? Read the post.

The company is far more than a shell. It includes directors (at this time anyway), bank account, company address, company secretary, chartered accountant, all filings and taxes up to date and is already a seasoned company.  Shells dont include those. You get what you pay for. Besides, it operated AS a restaurant, how can it be a shell?

Three points, among others:
1) A newcomer has to find a bank to accept them and today its not so easy. Go and try.
2) A newcomer has to find a company secretary and im told by my own secretary they often turn down newcomers because of liability issues. And thats the same with accountants too. WHO would vouch for and support the recommendation of a newcomer? Would you?
3) Our company has an excellent one-word name. This is not a big deal until a person considers what they want for a name. I dare someone to attempt a one-word company name. All are taken, as are sensible sounding names. Try it and see. We went through 84 different name submissions before one was approved that took 8 months. 8 months! And during those 8 months we could not operate. Shell company names that are for sale are things like Happy Garden Gesture Sdn Bhd, or Sandy Bottom Synergy Sdn Bhd. Really, one wants to go through life with that? Embarrassing. And after you buy that name and shell, you still have to do all the above. Good luck and all the best.

As for paid up capital and shares, in our case we went with the minimum required but took the pre-authorization to double it without further filings or submissions for approvals. If the company mission is modified into a new mission involving higher capital requirements, a company or director has to add. If a company is not food now but wants to be, yes, they have to add capital to top up current requirements. But we are already approved. And when the buyer-director is added to the company roster and goes out as director and signs a lease for commercial space and chops it with the company stamp and pays with a company check, tell me who is going to challenge that? Its done! Yes, as to the government they need a workpass sure, but we are talking about the company. Workpasses are separate and have no part in this particular discussion. Save Visa issues for Part B.

Furthermore, and this is important for anyone, Malaysia is pressing restaurant operators to be Halal and that means getting JAKIM certification. Malaysia wants to become a Halal hub and favors such operations, applications and company leadership. I regard it as important for the directors to be Muslim. We have two.

I can only say what the status of the company is. I dont speak for the changing government in the future or more particularly, a particular government clerk responsible for chopping approvals. Most expats know (those who have done it) you can walk up to a counter in a government office and be told a set of answers. You can move to another counter station and be told a different set of answers. Which is the truth? One doesnt know the truth until there is a final chop by someone, somewhere--or no chop--thats the final result and outcome to a situation and then you know which clerk told you the right thing--or not the right thing. You submit something on a Monday and its declined; you submit on Tuesday with a different set of clerks and its approved. Go figure.

Meantime, it really doesnt matter what I say because its all going to be verified with our independent staff, with government itself like LHDN, and books and records are open to inspection by a buyer or their own independent practitioners. Anything found not correct or to a buyers particular needs and desires, then they wouldnt take the company and no harm is done. There is no "one size fits all" in any case but of course i hope our company does fit.

The trouble in ASEAN is that foreigners who are expecting exactness are in for a big surprise. Nothing is cut-dried-precise as some may be used to. Im not sure, maybe Germans have the hardest time here which I mean as compliment because i too appreciate a precise set of rules to follow and once followed, the expectation of a precise result. Not true of Malaysia or anywhere nearby. All we can do is keep chipping at the block and find the ways to solve problems which may involve all sorts of processes we are not used to. Starting a company in Malaysia is/was a huge headache, one I hope never to repeat.

Im writing the advert now to be posted in the Business section and we dont have to further discuss this here which is the right thing to do in the forum unless the discussion is general.