How Do I register a Hotel in Malaysia?

Before COVID-19, Malaysia’s hotel and tourism industry was one of the most thriving sectors among ASEAN countries. Its reputation as one of the world’s leading tourism countries that proven by thousands of tourists flocking to its shores each year. To start a hotel business in Malaysia, the entrepreneurs need to apply its relevant hotel licenses.

Process to Acquire Hotel License in Malaysia

The regulating authority which is responsible for the implementation of provisions and enforcement in the tourism sector is the Ministry of Tourism and Culture. They ensure that the requirements of the Tourism Industry Act and Tourism Vehicles Licensing Act can adhere to.

To start the business, there are four (4) stages the entrepreneur needs to go through:

1. Company incorporation
   

   The entrepreneur is to appoint a Company Secretary to kick-start the Company incorporation.

2. Employer/ Employee Registration
   

   Once the Company is incorporated, the business may initiate bank account opening as well as proceed to register its file with the Employees Provident Fund (EPF), Social Security Organisation (SOCSO) as well as Inland Revenue Board – Lembaga Hasil Dalam Negeri (LHDN).

3. Pre-operational approvals
   

   Once the business is set up, the Company will need to acquire an accommodation unit license from the Tourism Industry Act and the Tourism Vehicles Licensing Act. Another license is the signboard/advertisement licensing which normally needs from the City Hall of each state.

4. Additional license approvals
   

   It is common for hotels to have parking lots, hair salons, souvenir shops, restaurants, and many other units within the building. Hence, all these units need to have separate licensing to start operating.

In terms of the legal aspect of starting up a hotel business in Malaysia (assuming the building is completed and ready to be occupied), the Company is required to have at least a minimum of 12 approvals to start up the business smoothly. However, depending on the business activities the hotel provides, there may be up to 22 license approvals the Company is required to have.

Any entrepreneur who intends to operate a hotel establishment in Malaysia will be required by the law to have their business registered and licensed. This must be done before operations can commence. The types of licensing that will be required include:

• Tourist Accommodation Premises License (issued by the Ministry of Tourism and Culture)
• Signboard and Premise License
• A Halal License
• License to sell alcoholic beverages in your hotel’s bars, restaurants, and coffee shops
• License for the use of advertisements and commercials on the hotel’s premise
• License to create a swimming pool and parking lot on the hotel’s premises
• License for indoor facilities and entertainment
• License to open a beauty salon within the hotel (if applicable)

Things to consider before operating hotels in Malaysia

• Hiring foreign workers requires necessary visas
• The cost of starting your business and the available source of funding that you have
• The competition is high within Malaysia’s tourism sector, and it is important to survey who your competitors are before you set up your business. This can easily go through a market evaluation.
• You will need to source highly qualified individuals to fill the roles within your business. Working with an employment agency in Malaysia can help with sourcing employees who will be the right fit.
• Choosing the right location is going to determine the volume of business that you receive throughout the year.

Hotel operators who intend to hire foreign workers in their hotel establishments will need to get the necessary Malaysian work permit visas. The hotel management industry is all about providing great customer service and experience to your guests, so hiring the right staff makes a difference!