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Malaysia Companies Register Sdn Bhd Audit Tax Accounting Business Licenses, 29-4-2, Block G, Cheras Business Centre, Jalan 3/101C, Jalan Cheras Cheras, Kuala Lumpur (2026)

27/10/2026

Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services
CONVENIENCE STORE
Fresh, perishable, refrigerated and frozen products produced in proper and systematic packaging are allowed.

Under the Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services, convenience stores are permitted to sell fresh, perishable, refrigerated and frozen products, provided that such products are properly and systematically packaged.

Product Categories

The permitted product categories include:

Fresh Products: Fresh food items that are appropriately packaged for retail sale.

Perishable Products: Food products with a limited shelf life that require appropriate handling and storage.

Refrigerated Products: Products that require controlled chilled storage temperatures to maintain their quality and safety.

Frozen Products: Products that require frozen storage conditions to preserve their quality and suitability for consumption.

Packaging and Handling Requirements

To comply with the stated provision, operators should ensure that:

Proper Packaging: Products are packaged appropriately to protect their quality, hygiene and safety.

Systematic Packaging: Packaging follows consistent, organised and suitable procedures for retail distribution.

Appropriate Storage: Refrigerated and frozen products are maintained under suitable temperature-controlled conditions.

Food Safety Compliance: Products comply with applicable Malaysian food safety, hygiene, labelling and other relevant regulatory requirements.

Important Regulatory Considerations

Permission to sell these product categories does not automatically exempt convenience store operators from other applicable requirements.

Operators must ensure compliance with relevant food safety regulations, local authority licensing conditions and any additional requirements applicable to the products being sold.

Conclusion

Convenience stores involving foreign participation may sell fresh, perishable, refrigerated and frozen products, provided that these products are properly and systematically packaged and comply with applicable Malaysian regulatory requirements.

27/10/2026

Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services

Location Criteria — Metropolitan and Urban Areas with a Minimum Population of 10,000
Under the cited Guidelines, convenience stores involving foreign participation should operate within metropolitan or urban areas with a population of at least 10,000, based on the definitions established by the Department of Statistics Malaysia (DOSM) in the Population and Housing Census 2000, Malaysia.

When assessing a proposed location, operators should verify both its metropolitan or urban classification and whether it satisfies the minimum population threshold specified in the Guidelines. These criteria should be checked before committing to a lease or investing in the premises.

Meeting the location criteria alone does not establish full eligibility to operate. The Guidelines also provide for approval by the Distributive Trade Committee and compliance with applicable local authority requirements.

22/10/2026

Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services

CONVENIENCE STORE
Maximum Sales Floor Area – 180 Square Metres (Approximately 2,000 Square Feet)
Under the Guidelines, the sales floor area of a convenience store must not exceed 180 square metres, which is described as approximately one shop lot or 2,000 square feet.
This requirement establishes the maximum permitted retail sales floor area for convenience stores under the relevant foreign participation framework.
1. Maximum Permitted Sales Floor Area
Maximum Sales Floor Area: 180 Square Metres
The Guidelines specify the following:
Maximum Area: 180 square metres.
Approximate Equivalent: 1,938 square feet, commonly rounded to approximately 2,000 square feet.
Illustrative Premises Size: One shop lot.
Regulatory Condition: The convenience store's sales floor area must not exceed the prescribed limit.

2. Understanding Sales Floor Area
Sales floor area generally refers to the portion of a retail establishment used for displaying and selling products to customers.
It may include areas such as:
Product display shelves and retail aisles.
Customer shopping and circulation areas.
Refrigerated display sections.
Checkout counters and cashier areas.
Other spaces directly associated with retail sales activities.
Areas such as storerooms, staff offices, toilets and other non-sales facilities may be treated differently depending on the applicable measurement rules.
The precise method of calculating sales floor area should be confirmed with KPDN and the relevant Local Authority.

3. Shop Lot Size vs. Sales Floor Area
A distinction should be made between the total premises area and the sales floor area.
(a) Total Premises Area
The total physical area of the business premises, which may include sales areas, storerooms, staff facilities and other operational spaces.
(b) Sales Floor Area
The portion of the premises used for retail sales activities, as determined under the applicable measurement criteria.

22/10/2026

Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services

CONVENIENCE STORE

Operating Hours – Mandatory 24-Hour Operations and Premises-Specific Conditions

Under the Guidelines, convenience stores are required to operate 24 hours a day.
However, convenience stores located within certain premises, including shopping complexes, hospitals, factories, educational institutions and public areas, are subject to the operating conditions specified by the respective premises management.
This provision recognises that convenience stores operating within managed premises may be subject to additional restrictions or arrangements imposed by the management of those premises.
1. General Operating Hours Requirement – 24 Hours Daily
Standard Operating Requirement: 24 Hours Per Day
Convenience stores are generally required to remain operational throughout the day and night.
This means:
Continuous Daily Operations: The store is expected to operate 24 hours a day.
Daytime and Nighttime Services: Customers may access the store during both daytime and nighttime hours.
Consistent Retail Availability: The business is expected to provide continuous access to fast-moving consumer items.
The 24-hour operating requirement is a defining characteristic of a convenience store under the Guidelines.
2. Special Conditions for Convenience Stores Located Within Managed Premises
The Guidelines recognise that convenience stores operating within certain premises are subject to the conditions established by the respective premises management.
These premises include:
(a) Shopping Complexes
Convenience stores located within shopping malls or commercial complexes may be subject to operating-hour restrictions and access arrangements established by the shopping complex management.
(b) Hospitals
Convenience stores located within hospitals may be subject to conditions relating to operating hours, security, visitor access and hospital management policies.
(c) Factories
Convenience stores situated within factory premises may be required to observe operating conditions established by factory management, including workplace access and security arrangements.
(d) Educational Institutions
Convenience stores operating within schools, colleges, universities or other educational institutions may be subject to operating schedules and campus management policies.
(e) Public Areas
Convenience stores situated within managed public facilities or areas may be subject to the conditions imposed by the relevant premises management or responsible authority.

3. Practical Example – Convenience Store Inside a Shopping Mall
A convenience store intends to operate inside a shopping complex.
The shopping complex management permits retail tenants to operate only between 10:00 AM and 10:00 PM.
Regulatory Consideration:
Although convenience stores are generally required to operate 24 hours daily, the quoted Guidelines expressly recognise that stores located within shopping complexes are subject to the conditions specified by the premises management.
Accordingly, the operator should confirm the permitted operating hours with the shopping complex management and, where necessary, clarify the arrangement with KPDN and the relevant licensing authority.

22/10/2026

Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services

CONVENIENCE STORE

Equity Structure – Maximum 30% Foreign Equity and Minimum 30% Bumiputera or Malay Equity

Under the Guidelines, convenience store companies with foreign interests are subject to specific equity participation requirements.
The prescribed equity structure provides that:

(a) Foreign Equity Participation: A foreign interest is permitted to hold a maximum of 30% of the company's total equity.

(b) Bumiputera or Malay Equity Participation: A minimum of 30% of the company's total equity must be reserved for Bumiputera or Malay shareholders.

(c) Timing of Compliance: These equity structure conditions must be fulfilled at the time the application is submitted to the Distributive Trade Committee of KPDN.

Maximum Foreign Equity Participation – 30%
Maximum Permitted Foreign Ownership: 30%

Under the stated condition, foreign interests may collectively hold no more than 30% of the company's equity.

22/10/2026

Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services

CONVENIENCE STORE

Minimum Capital Requirement – RM1 Million Shareholders’ Funds
Under the Guidelines, the minimum capital investment for a convenience store company with foreign interests is RM1 million in shareholders’ funds, which includes paid-up capital.
This requirement establishes the minimum financial capital threshold for convenience store companies falling within the relevant foreign participation framework.
Importantly, the RM1 million requirement refers to shareholders’ funds, not necessarily RM1 million in paid-up share capital alone.
1. Minimum Shareholders’ Funds Requirement
Minimum Required Capital: RM1,000,000
Shareholders’ funds generally represent the company's total equity, which may comprise:
• Paid-Up Share Capital: Capital contributed by shareholders for shares issued by the company.
• Retained Earnings: Accumulated profits retained in the company after accounting for distributions and accumulated losses.
• Other Equity Reserves: Reserves recognised as part of shareholders’ equity, subject to applicable accounting standards and regulatory acceptance.
The company's qualifying shareholders’ funds must meet the minimum RM1 million threshold.
2. Difference Between Paid-Up Capital and Shareholders’ Funds
It is important to distinguish between these two financial concepts.
(a) Paid-Up Capital
Paid-up capital refers to the amount paid by shareholders for shares issued by the company.
(b) Shareholders’ Funds
Shareholders’ funds represent the company's net equity position, including paid-up capital, retained earnings or accumulated losses, and other recognised equity balances.
Therefore, a company may have paid-up capital below RM1 million but still have shareholders’ funds of RM1 million or more if it has sufficient qualifying retained earnings or reserves.
Conversely, a company with RM1 million in paid-up capital may fall below the minimum shareholders’ funds requirement if it has accumulated losses.

3. Important Accounting and Capital Considerations
(a) Accumulated Losses Reduce Shareholders’ Funds
Where a company incurs losses, its total shareholders’ equity may decrease.
Example:
Paid-up capital: RM1,000,000
Accumulated losses: RM250,000
Total Shareholders’ Funds: RM750,000
In this example, the company would fall below the RM1 million threshold, assuming no other equity balances.
(b) Shareholder Loans Are Not Automatically Shareholders’ Funds
Money advanced by shareholders as loans is generally classified as a liability rather than equity.
Therefore, a shareholder loan of RM1 million does not automatically satisfy the shareholders’ funds requirement.
(c) Bank Balance Is Not the Same as Shareholders’ Funds
The company's bank balance alone does not determine whether the capital requirement is satisfied.
For example, a company may have RM1 million in its bank account but also have liabilities that reduce its net equity below RM1 million.
(d) Supporting Financial Records
The company should maintain appropriate documentation supporting its equity position, including:
• Share capital and allotment records.
• Evidence of capital contributions.
• Financial statements.
• Relevant accounting records.
• Documentation supporting reserves or other equity balances.
4. Practical Considerations for Newly Incorporated Companies
For a newly incorporated convenience store company that has not yet generated profits or accumulated reserves, shareholders’ funds will generally depend primarily on the capital contributed by shareholders.
Accordingly, RM1 million in paid-up capital may be a practical initial capital structure where the company intends to satisfy the shareholders’ funds threshold entirely through share capital.
However, this should not be interpreted as a separate statutory requirement to maintain RM1 million in paid-up capital in every circumstance.
The proposed capital structure should be confirmed against the applicable KPDN requirements.
5. Relationship with Other Foreign Participation Conditions
Meeting the RM1 million shareholders’ funds requirement does not automatically establish eligibility to operate a convenience store with foreign interests.
The operator must also consider the other relevant conditions under the Guidelines, including:
• Local Incorporation: Incorporation in Malaysia under the Companies Act 2016 [Act 777].
• Franchise Format: Operation through a franchise system under the Franchise Act 1998 [Act 590], as specified in the Guidelines.
• Equity Structure: Compliance with any applicable foreign participation and shareholding conditions.
• Business Licensing: Compliance with relevant local authority and other regulatory requirements.
7. Important Compliance Note
The quoted provision specifies a minimum of RM1 million in shareholders’ funds, including paid-up capital.
It does not expressly state that the full RM1 million must consist exclusively of paid-up capital.
Therefore, the financial assessment should distinguish between:
• Registered or paid-up share capital
• Qualifying reserves and retained earnings
• Accumulated losses
• Shareholder loans and other liabilities
The precise calculation and supporting documentation should be confirmed with KPDN.

22/10/2026

Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services

CONVENIENCE STORE
Incorporation of Company, Paid-up Capital and Equity Structure Conditions Any foreign involvement in convenience store is recommended to be in compliance

Franchise Format For Convenience Stores Of Foreign Interest

The convenience store companies with foreign interest must operate through franchise system provided under the Franchise Act 1998 [Act 590].

Franchise Format for Convenience Stores with Foreign Interests
Under the Guidelines, convenience store companies with foreign interests must operate through a franchise system in accordance with the Franchise Act 1998 [Act 590].
This means that foreign participation in convenience store businesses is subject to the prescribed franchise business structure, rather than being assessed solely on the basis of company incorporation or share ownership.
The franchise arrangement must comply with the applicable provisions of Malaysia's Franchise Act 1998 [Act 590], including relevant registration and operational requirements.
1. Mandatory Franchise Business Structure
Required Business Format: Franchise System
The Guidelines specify that convenience store companies involving foreign interests must adopt a franchise system.
This requirement is relevant to businesses involving foreign distribution companies through arrangements such as:
• Foreign equity participation.
• Malaysian–foreign joint ventures.
• Commercial cooperation with foreign distribution companies.
• Foreign distribution company representation in the business.
• Franchise, trademark or other relevant contractual arrangements.
Whether a particular arrangement constitutes foreign interest must be assessed according to the applicable definition under the Guidelines.
2. Understanding the Franchise System
A franchise is a business arrangement under which one party, generally known as the franchisor, grants another party, known as the franchisee, the right to operate a business using an established business system, subject to the terms of a franchise agreement.
A franchise arrangement may involve:
(a) Franchisor
The party granting the relevant franchise rights, which may include rights relating to its business system, trademark, operational methods and commercial identity.
(b) Franchisee
The party authorised to operate the business under the franchise arrangement.
(c) Franchise Agreement
A formal agreement governing the rights, responsibilities and obligations of the franchisor and franchisee.
(d) Business Operating System
An established framework for operating the convenience store, which may include product sourcing, inventory management, store layout, operational procedures and service standards.
The arrangement must satisfy the applicable legal definition and requirements of a franchise under Malaysian law. Merely

3. Application to Foreign-Participated Convenience Stores
Example A: Foreign Convenience Store Brand Entering Malaysia
A foreign convenience store operator intends to establish a retail network in Malaysia using its established brand and operating system.
Regulatory Consideration:
The proposed business structure must be assessed against the franchise format requirement under the Guidelines and the applicable provisions of the Franchise Act 1998.
Example B: Malaysian Company Cooperating with a Foreign Distribution Company
A Malaysian-incorporated company enters into a business cooperation arrangement with a foreign distribution company to operate convenience stores.
Regulatory Consideration:
If the arrangement falls within the foreign-interest provisions, the operator must address the franchise format requirement.
The contractual arrangement should be reviewed to determine whether it satisfies the applicable franchise legislation.
Example C: Foreign Equity Participation Without a Franchise Arrangement
A foreign distribution company acquires shares in a Malaysian convenience store operator, but the business is not structured under a franchise system.
Regulatory Consideration:
Where the company falls within the foreign-interest provisions, the absence of a qualifying franchise arrangement may raise a compliance issue under the stated requirement.
The operator should seek clarification from KPDN before proceeding.

4. Franchise Act 1998 [Act 590] – Regulatory Considerations
Convenience store operators should consider the relevant requirements under the Franchise Act 1998, including, where applicable:
• Franchise Registration: Determining the applicable registration obligations for the franchisor, franchisee or other relevant parties.
• Franchise Agreement: Preparing a legally compliant franchise agreement.
• Trademark and Intellectual Property Rights: Establishing appropriate rights to use the relevant brand and business identity.
• Franchise Disclosure: Addressing applicable disclosure and documentation requirements.
• Operational Responsibilities: Defining the rights and obligations of the franchisor and franchisee.
• Ongoing Compliance: Maintaining compliance with applicable franchise legislation and regulatory conditions.
The precise registration requirements may differ depending on the parties' status, the structure of the arrangement and the applicable statutory provisions.

22/10/2026

Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services

CONVENIENCE STORE
Incorporation of Company, Paid-up Capital and Equity Structure Conditions Any foreign involvement in convenience store is recommended to be in compliance

Local Incorporation

The convenience store companies must be locally incorporated under the Companies Act 2016 [Act 777].

This means that convenience store businesses falling within the relevant foreign participation provisions should operate through a company incorporated in Malaysia.
1. Local Incorporation Requirement
Required Corporate Structure: Malaysian-Incorporated Company
The Guidelines specify that convenience store companies must be incorporated locally in accordance with the Companies Act 2016 [Act 777].
Local incorporation involves establishing a company registered with the Companies Commission of Malaysia (SSM) under Malaysian company law.
A locally incorporated company is a separate legal entity established in Malaysia, regardless of whether its shareholders are Malaysian or foreign persons.
2. Application to Convenience Stores with Foreign Involvement
The provision should be considered by convenience store businesses involving foreign participation, which may include:
(a) Foreign Equity Participation
A foreign distribution company holds shares in a Malaysian convenience store company.
(b) Malaysian–Foreign Joint Venture
Malaysian and foreign investors jointly establish a convenience store business.
(c) Foreign Distribution Company Cooperation
A Malaysian convenience store operator enters into commercial cooperation arrangements with a foreign distribution company, where those arrangements fall within the foreign-interest criteria under the Guidelines.
(d) Foreign Corporate Participation
A foreign distribution company participates in the convenience store business through relevant shareholding or board representation arrangements.
Important: Whether a particular contractual relationship or corporate arrangement constitutes foreign involvement must be assessed against the applicable definition under the Guidelines.

3. Practical Examples
Example A: Foreign-Owned Convenience Store Company
A foreign investor intends to establish a convenience store business in Malaysia.
The investor incorporates a Malaysian private limited company (Sdn. Bhd.) under the Companies Act 2016.
Assessment:
The company satisfies the local incorporation element, subject to compliance with other applicable conditions.
However, incorporation alone does not establish that the proposed foreign ownership structure is permitted.
Example B: Malaysian–Foreign Joint Venture
A Malaysian investor and a foreign distribution company establish a Malaysian-incorporated company to operate convenience stores.
Assessment:
The locally incorporated company satisfies the incorporation element.
The proposed equity structure and other foreign participation conditions must be assessed separately.
Example C: Foreign Company Branch
A foreign distribution company registers a branch in Malaysia and proposes to operate convenience stores through that branch.
Assessment:
A registered foreign branch is not a locally incorporated Malaysian company.
Accordingly, the proposed arrangement does not, by itself, satisfy the local incorporation condition stated in the quoted provision.

21/10/2026

Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services

CONVENIENCE STORE

Definition and Characteristics of Fast-Moving Items
Under the Guidelines, fast-moving items refer to products with a high stock turnover rate, meaning goods that are sold frequently and replenished regularly due to consistent consumer demand.
The Guidelines specifically identify ci******es, newspapers, magazines and bread as examples of fast-moving items commonly associated with convenience store operations.
1. Understanding Fast-Moving Items
Fast-moving items are generally characterised by:
High Stock Turnover: Products are sold relatively quickly compared with slower-moving merchandise.
Frequent Consumer Purchases: Customers purchase these products regularly or as part of their daily routines.
Regular Inventory Replenishment: Retailers need to replenish stock frequently to maintain product availability.
Everyday Consumer Demand: Products typically serve routine, immediate or recurring consumer needs.
Important Distinction:
Fast-moving items are identified primarily by their stock turnover rate, rather than their selling price, physical size or product category alone.
A product is not necessarily fast-moving simply because it is inexpensive.
3. Other Illustrative Fast-Moving Consumer Products
Depending on consumer demand and the nature of the retail business, other products may include:
Bottled drinking water.
Packaged beverages.
Biscuits, snacks and confectionery.
Ready-to-eat packaged food.
Milk and selected dairy products.
Personal hygiene products.
Tissue paper and household necessities.
Basic daily-use consumer products.
These are additional commercial examples and are not specifically listed in the quoted provision.
4. Stock Turnover and Inventory Management
The stock turnover rate measures how frequently inventory is sold and replaced during a particular period.
A commonly used accounting formula is:
Inventory Turnover Ratio = Cost of Goods Sold ÷ Average Inventory
For example, a convenience store records:
Annual cost of goods sold: RM600,000
Average inventory: RM50,000
Inventory Turnover Ratio = RM600,000 ÷ RM50,000 = 12 times per year
This indicates that the store's inventory turns over approximately 12 times annually.
However, actual turnover rates differ between product categories, and the Guidelines do not specify a numerical inventory turnover threshold for defining fast-moving items.
5. Important Regulatory Considerations
Convenience store operators should consider the following:
(a) Nature of Merchandise
The products offered should be consistent with the fast-moving retail concept described in the Guidelines.
(b) Inventory Replenishment
Appropriate stock monitoring and replenishment procedures should be maintained to support product availability and minimise expired or obsolete inventory.
(c) Product-Specific Regulatory Requirements
Certain products may be subject to additional laws, restrictions or licensing requirements.
For example, the inclusion of ci******es in the Guidelines as an illustration does not override Malaysian to***co control laws, including applicable restrictions on sales, display, advertising and other regulated activities.
(d) Business Classification
A retailer's business classification should be assessed against the complete convenience store definition and other applicable conditions under the Guidelines.
Selling fast-moving items alone does not necessarily mean that an establishment qualifies as a convenience store.

21/10/2026

Guidelines on Foreign Participation in Malaysia’s Distributive Trade Services

CONVENIENCE STORE

Foreign Interest, Business Cooperation and Corporate Participation Requirements

Under the Guidelines, convenience store companies with foreign interests include companies that cooperate with a foreign distribution company through commercial arrangements, business relationships or corporate participation.
The provision identifies several forms of involvement through which a convenience store business may be regarded as having foreign interests.
These arrangements may involve contractual relationships, the use or non-use of foreign trademarks, foreign equity participation or representation on the board of directors.
1. Commercial Agreements and Business Cooperation
A convenience store company may have foreign interests where it maintains a business relationship with a foreign distribution company through arrangements such as:
Commercial Agreements: Formal agreements governing business cooperation between the convenience store operator and a foreign distribution company.
Partnership Arrangements: Business partnerships involving foreign distribution companies.
Agency Agreements: Arrangements under which the local company acts as an agent or representative of a foreign distribution company.
Service Contracts: Agreements under which a foreign distribution company provides operational, technical, management or other business services.
Supply Agreements: Commercial arrangements involving the supply of goods or products by a foreign distribution company.
Important Consideration:
Foreign participation may involve more than direct ownership of shares.
A convenience store company may have a commercial relationship with a foreign distribution company even where the foreign company does not directly hold shares in the Malaysian business.
Whether a particular contractual relationship falls within the Guidelines should be confirmed with KPDN.
2. Use or Non-Use of Foreign Distribution Trademarks
The Guidelines refer to convenience store companies that use or do not use the trademark of a foreign distribution company as the name of their convenience stores.
This means that the presence or absence of a foreign distribution company's trademark is not necessarily decisive in determining whether a convenience store company has foreign interests.
Example A: Convenience Store Using a Foreign Trademark
A Malaysian convenience store operator enters into a business cooperation agreement with a foreign distribution company and operates under the foreign company's retail brand.
The relationship may be relevant when assessing foreign interests under the Guidelines.
Example B: Convenience Store Using a Malaysian Brand
A Malaysian convenience store operator cooperates with a foreign distribution company but operates under its own Malaysian brand name.
The absence of the foreign trademark does not, by itself, exclude the business from consideration under the foreign interest provisions.
3. Foreign Equity Holders and Board Representation
The Guidelines also refer to convenience store companies that have equity holders and/or members of the board of directors from a foreign distribution company.
This may involve:
(a) Foreign Equity Participation
A foreign distribution company holds shares or an ownership interest in the convenience store company.
(b) Foreign Board Representation
A person associated with a foreign distribution company serves on the board of directors of the convenience store company.
(c) Combined Equity and Board Participation
A foreign distribution company participates through both share ownership and board representation.
The expression “and/or” indicates that equity participation, board representation or both may be relevant.
Key Compliance Message
Foreign Interest in a Convenience Store Is Not Necessarily Limited to Foreign Share Ownership.
Foreign involvement may also arise through commercial cooperation, contractual arrangements or corporate participation involving a foreign distribution company.
A Malaysian-incorporated convenience store company should not assume that it falls outside the foreign interest provisions merely because it uses a local brand or has no direct foreign shareholding.