Open a Malaysian Business for Selling Coffee, Tea and Spices

Updated on Tuesday 26th March 2019

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Investors who establish a business for selling coffee, tea and spices need to follow the general regulatory and standard requirements for these types of products and will need to open a Malaysian registered company.
The coffee culture has evolved in Asian and Malaysian buyers, especially younger ones, are no strangers to buying different types of coffee assortments, especially when they originate from a trusted source and are of good quality. 
The prerequisites to opening a coffee, tea and spices business include obtaining the relevant licenses for the import and sale of the said products. Below, our team of attorneys in Malaysia describes the conditions for obtaining a coffee license and upon request, our agents can detail the process for other types of licensed products. 

What are the import requirements for businesses in Malaysia?

Malaysia is an established trading center and the import and export business is an important contributor to the country’s economy. When running a business that imports coffee, tea, and spices, investors will need to comply with the requirements for obtaining import licenses. Foodstuffs are some of the most important categories of products that require special licensing. 
A coffee buyer’s license is needed in Malaysia and it is mandatory for any buyers of coffee fruit or coffee bean (which is non-fried) from coffee farmers in selected areas. The conditions for applying for this license include the following:
  • age and residency: the applicant needs to be over 18 years of age and a citizen or a permanent resident.
  • company: the applicant is either the owner of a company registered with the Companies Commission or he has a percentage of shares in an existing, registered company.
  • validity: the license for coffee buyers is valid for one year from its issuance date.
  • fee: upon application, individuals need to consider the license fee, which is approximately 10.00 RMN per year.
  • other conditions: when applying for this permit, the applicant is required to not be considered bankrupt.
When the company is controlled by a foreign entrepreneur, the one submitting the application needs to be a Malaysian citizen or resident and he needs to have at least 30% of the company shareholding. 
Import tariffs and taxes apply in Malaysia and entrepreneurs will also need to take these customs duties into consideration when starting a business that relies on imported products. 
One of our lawyers in Malaysia can give you more detailed information on the licensing process, the requirements set forth by the Federal Agricultural Marketing Authority, as well as the requirements in case of foreign company owners. 

What are the company formation steps in Malaysia?

Companies applying for the needed licenses to open a coffee, tea and spices business need to first be registered with the Companies Commission. Below, our lawyers in Malaysia describe the main steps for company formation:
  1. Company name reservation: the founders need to submit the name reservation to the Companies Commission.
  2. The incorporation documents: the next step is to draw up the company’s documents, the Articles of Association and Memorandum.
  3. The preparation of the documents: in order to be submitted for registration, the incorporation documents need to be signed by all of the company directors and shareholders. 
  4. The submission: the documents, once prepared, are submitted for registration with the Companies Commission.
  5. The bank account and capital: the founders need to open a bank account in Malaysia and deposit the minimum share capital.
The company needs to be registered for the Goods and Services Tax and must comply with the ongoing taxation requirements. One of our attorneys in Malaysia can detail all of these steps and help investors open a company. Apart from the startup costs that involve the registration fees, the costs for buying or renting a space and those for equipping the shop or store, investors who open this type of business will need to add the recurrent costs for renewing licenses and the import tariffs and taxes. The costs for hiring employees in the store, including the monthly remuneration and the social security contributions, can also be included in the company costs.
A coffee, tea and spices business can generate the desired revenue, especially when advertised properly and when located in an area where the products will be accessible to both locals and tourists.
Investors who wish to start this type of business can contact our law firm in Malaysia for complete details about the registration and licensing requirements.