Retail Sector in Malaysia
Retailing is a commercial transaction in which a buyer intends to consume the good or services through personal, family or household use. Retailers are business firms engaged in offering goods and services directly to consumers.
In Malaysia, the supervision of the wholesale and retail sector falls under the supervision of the Ministry of Domestic Trade and Consumer Affairs (MDTCA) through the Committee on Wholesale and Retail Trade. The Committee was set up in 1995 to regulate and supervise the industry, including foreign participation in the sector. Approval from the Committee is needed for foreign companies wanting to set up wholesale or retail operations locally and for the opening and relocation of branches.
FIC and MDTCA show flexibility on the shareholder structure. But exceptions are examined on a case by case basis. The other conditions on foreign investment in the industry include: •
Incorporation of their wholesale and retail operations locally •
Minimum capital requirements of Malaysian Ringgit (MYR) 1 million for specialty outlets, MYR5 million for supermarkets and MYR50 million for hypermarkets and FIC guidelines on purchase of property by Malaysians and foreign interests. Guidelines for New Hypermarkets
Effective from April 2002, the government has approved a new set of guidelines for applications to open new hypermarkets in Malaysia: •
The minimum capital requirement has increased from MYR10 million to MYR50 million. •
Applications to build outlets should be submitted two years in advance. •
New hypermarkets cannot be built within a 3.5 kilometer radius of a housing area or a city center. •
Operations should be free-standing, which means hypermarkets must operate in their own buildings and not as part of any other complexes. •
A socio-economic impact study has to be conducted by the local authorities in the proposed area before any application is considered. The cost of the study would be borne by the...
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