Suggestions for Restaurant Business in KL Suburbs

The whole country is oversupplied with food outlets, so profits will probably be limited.

You need RM1 million in paid in capital to the balance sheet of a 100% foreign-owned restaurant and it has to have a special concept and also a floor area of no less than 1500 sq. ft.

If you can find a Malaysian partner the paid in capital is RM350,000 but it would limit the concepts you could adopt.

Quite a lot of regulation around food handling now in Malaysia, as well as licensing and inspection.

Hi @Gravitas,

Thx for the rapid response and the important info that you provided. I agree with your point that the country is oversupplied with food. At the same time, it is a touristic location, so the demand is there abundantly too. To compete with quantity, quality seems to be the obvious solution.

The RM 1Mil/1500 sq ft criteria that you mentioned is mandatory for the KL city center or anywhere? As I mentioned, I am interested in the outskirts of city, or even smaller towns.

A few years ago I got a feasibility done for a cafeteria in a university campus. That required minimal capital. I am not sure if that stated having a Malaysian partner, but thank you for bringing it up. I will look into it.

Hopefully I will have it launched within this year. : )

Enjoy your day.

Gravitas wrote:

The whole country is oversupplied with food outlets, so profits will probably be limited.

You need RM1 million in paid in capital to the balance sheet of a 100% foreign-owned restaurant and it has to have a special concept and also a floor area of no less than 1500 sq. ft.

If you can find a Malaysian partner the paid in capital is RM350,000 but it would limit the concepts you could adopt.

Quite a lot of regulation around food handling now in Malaysia, as well as licensing and inspection.

Thanks for pointing out the halal certification Zoagnes. Though I have been told that would be covered in food licencing process.

zoagnes wrote:

Hi, as in any business you need the fund, for food industry, need the halal certificate.

The RM 1Mil/1500 sq ft criteria is mandatory for whole country for 100% foreign-owned restaurants. It is about requirements in the corporate formation process i.e. prevailing laws.

Tourism?  Well not as much these days, and not really outside KL in the Klang Valley. As Malaysia has become too expensive so tourists tend to go elsewhere. All restaurants are suffering now because of the 6% Goods and Services Tax which started 1 April 2015 has made COL more expensive i.e. less ready cash. Don't forget protection money in your running costs.

I think your idea about "quality" being the way to go is not going to cut it in Malaysia, because people are used to getting food cheaply and the average expenditure per dish is about RM35 per person in a restaurant. Hotels offer buffets from RM38 upwards, and these are extremely popular. If you were thinking of Arabic food, I would do some serious research on demand.

Getting an alcohol licence can be problematic for foreigners - i.e. you will need help from a Malaysian who will recommend you as having a good character etc. If you don't get one your profits will be very low. You cut your clientele as well by not offering alcohol.

Lower numbers of well-paid expats as well, because of immigration changes - more 30's and under who tend to live in flat shares. This has meant local population is having difficulties with unlet properties which they anticipated would be easy to rent out. So times have changed radically in Malaysia in the last 2-3 years.

It takes about 6 months to set up a restaurant in Malaysia as you have to get it to the going concern stage before you can get it licenced to open its doors. Its a bit of a nightmare, especially when losses are likely for at least the first year. Restaurants come and go so regularly, its almost amusing to watch.

There are franchises available. There are also rules about who gets tenders for say university canteens and its not foreigners.

Good Luck.

Great that you pointed out some major aspects that I wasn't aware of, or have been changed since I did my research which was a couple of years ago.

Will look into it thoroughly again. Thanks for the tips!

The main issue is the government doubled the paid in capital last year from RM500k to RM1million and that is hurting a lot of people. When immigration renewals come up, people cant afford the new capital requirements. What is happening is food businesses owned by foreigners are introducing more unsuspecting shareholders - who of course end up loosing their money because of losses. Difficult times at the moment.

Hmm.. I agree.

By the way, what do you exactly mean by 'limit the concept' when you talk about 'capital is RM350,000 but it would limit the concepts you could adopt.' in the first response?

Gravitas wrote:

The main issue is the government doubled the paid in capital last year from RM500k to RM1million and that is hurting a lot of people. When immigration renewals come up, people cant afford the new capital requirements. What is happening is food businesses owned by foreigners are introducing more unsuspecting shareholders - who of course end up loosing their money because of losses. Difficult times at the moment.

To be honest, there is nothing readily available about the rules when a Malaysian and a foreigner are involved in a service industry. I think there is a graduated paid in capital requirement which gives the right to the size of business, i.e. the more affluent/expensive the business set up, the more capital has to be injected. You would need to investigate this more thoroughly.

Yes, you do have a point. Lets see! 

Gravitas wrote:

To be honest, there is nothing readily available about the rules when a Malaysian and a foreigner are involved in a service industry. I think there is a graduated paid in capital requirement which gives the right to the size of business, i.e. the more affluent/expensive the business set up, the more capital has to be injected. You would need to investigate this more thoroughly.

Listen to gravitas.

Or lose lots of money!

Many places I see new restaurants every few months. Same location different sucker errrrr I mean foreign investor.

Big chains are dominating. I have a friend from a 1,500 chain of Japanese restaurants moving into Malaysia.

They have the funds, the lawyers, the connections and patience to do this.

But still risky but they know that and can afford to take the risk.

A one man band can't compete.

Also Malaysia is a nation of only 25million people. If every Indian Pakistan Bangladeshi Pinoy or Indonesian could just set up here the country would implode. Resistance to foreigners is high. They will take your money. But want to keep it and throw you back home.

Gravitas wrote:

To be honest, there is nothing readily available about the rules when a Malaysian and a foreigner are involved in a service industry. I think there is a graduated paid in capital requirement which gives the right to the size of business, i.e. the more affluent/expensive the business set up, the more capital has to be injected. You would need to investigate this more thoroughly.

There were I nearly invested in a restaurant once. May have changed as years ago. I decided to avoid and then saw loads of foreigners " cheated" What there are are unwritten rules to contend with as well.

Hi,

As you have mentioned that you are into supply chain management, I would like to check with you for openings in Supply chain management in Turkey for a 8 years well experienced professional. How good are the opportunities and is there any chance from your end o help me in finding one.I'm from India.

Please do the needful if you can do anything from your end.

thanks & regards
my email id...
[email protected]

Hi,

I'm not aware of your field of expertise so its not easy for me to guide you in the right direction. I am not aware of any openings but you can search them online.

However, in Turkey, it's a key factor that you should know the language. Not only is this sort of mandatory if you are looking for a job, but also, its impossible to interact with general public here without knowing Turkish.

Good luck with the job hunt.
Zeeshan

SrujanaBorra wrote:

Hi,

As you have mentioned that you are into supply chain management, I would like to check with you for openings in Supply chain management in Turkey for a 8 years well experienced professional. How good are the opportunities and is there any chance from your end o help me in finding one.I'm from India.

Please do the needful if you can do anything from your end.

thanks & regards
my email id...
[email protected]