Retail Concession Agreement (Malaysia)
RETAIL CONCESSION AGREEMENT
Contracts Act 1950 (Act 136) | Trade Descriptions Act 2011 (Act 730) | Consumer Protection Act 1999 (Act 599)
THIS RETAIL CONCESSION AGREEMENT is entered into on [Agreement Date]
BETWEEN:
(1) [Grantor Name], of [Grantor Address] (hereinafter referred to as the "Grantor"); AND
(2) [Concessionaire Name], of [Concessionaire Address] (hereinafter referred to as the "Concessionaire").
1. GRANT OF CONCESSION
1.1 The Grantor hereby grants to the Concessionaire a non-exclusive, non-transferable contractual licence (not a tenancy or lease under the National Land Code 1965, Act 56) to operate a retail concession at [Concession Unit] (the "Concession Space"), comprising [Concession Area], for the Permitted Use only.
1.2 Type of concession: [Concession Type]
1.3 Permitted Use: [Permitted Use]. The Concessionaire shall not use the Concession Space for any other business activity without the prior written consent of the Grantor.
1.4 This Agreement creates a licence only. The Concessionaire shall not acquire any interest in land, exclusive possession, or tenancy rights. The Grantor retains full control over the premises.
2. CONCESSION PERIOD AND FEES
2.1 The concession period commences on [Commencement Date] and shall continue for [Concession Duration] months (the "Concession Period"), unless earlier terminated in accordance with this Agreement.
2.2 Fee Structure: [Fee Structure]
2.3 Monthly fee / minimum guarantee: [Monthly Fee], payable in advance on or before the 1st day of each calendar month.
2.4 Turnover rent: [Turnover Rate]% of gross monthly revenue, calculated and paid monthly within 7 days of month-end, with supporting sales statements.
2.5 Security deposit: [Deposit], payable upon execution. Refundable within 14 days of expiry, subject to deductions for outstanding fees and reinstatement costs.
2.6 Additional charges: [Service Charge Marketing]
2.7 Service tax at 8% under the Service Tax Act 2018 (Act 807) shall be added to the concession fees where applicable.
3. CONCESSIONAIRE OBLIGATIONS
3.1 The Concessionaire shall operate the Concession Space during the following hours: [Operating Hours], unless extended or reduced by the Grantor acting reasonably.
3.2 The Concessionaire shall obtain and maintain throughout the Concession Period all required licences and permits, including: [Licences Required]
3.3 The Concessionaire shall comply with: (a) all applicable Malaysian laws including the Trade Descriptions Act 2011 (Act 730) and the Consumer Protection Act 1999 (Act 599); (b) the Grantor's mall operational handbook and visual merchandising standards; (c) all health and hygiene requirements under the Food Act 1983 (Act 281) and Food Hygiene Regulations 2009 for food and beverage concessions; and (d) all applicable local authority requirements of [Governing Jurisdiction].
3.4 Fit-Out and Reinstatement: The Concessionaire shall fit out the Concession Space to the Grantor's approved design specifications at the Concessionaire's cost, and shall fully reinstate the Concession Space to its original condition at the end of the Concession Period.
4. TERMINATION
4.1 The Grantor may terminate this Agreement immediately upon: (a) failure by the Concessionaire to pay fees within 14 days of the due date; (b) the Concessionaire conducting business outside the Permitted Use; (c) the Concessionaire failing to maintain required licences; (d) the Concessionaire causing reputational damage to the mall; or (e) the Concessionaire's insolvency or winding-up.
4.2 The Grantor may terminate this Agreement without cause by giving 30 days' written notice to the Concessionaire. The Concessionaire shall not be entitled to renewal of the Concession Period as of right.
4.3 This Agreement is a licence and not a tenancy. On termination or expiry, the Concessionaire shall vacate the Concession Space immediately. The Sessions Court of Malaysia has jurisdiction over commercial concession disputes under the Courts of Judicature Act 1964 (Act 91).
5. GENERAL PROVISIONS
5.1 Stamp duty: this Agreement is subject to stamp duty under the Stamp Act 1949 (Act 378). A fixed duty of RM10 typically applies to a licence agreement under Item 4 of the First Schedule.
5.2 This Agreement is governed by the laws of [Governing Jurisdiction] and the Parties submit to the exclusive jurisdiction of the courts of [Governing Jurisdiction].
5.3 This Agreement constitutes the entire agreement between the Parties regarding the concession and supersedes all prior discussions and correspondence.
Grantor (Mall Operator / Landlord)
________________
Signature
Concessionaire
________________
Signature
What Is a Retail Concession Agreement (Malaysia)?
A Retail Concession Agreement in Malaysia fixes the respective duties and entitlements of the parties to the arrangement.
Malaysia's retail sector is governed by multiple regulatory frameworks. The Trade Descriptions Act 2011 (Act 730) requires that goods sold to Malaysian consumers comply with trade description standards enforced by the Ministry of Domestic Trade and Cost of Living (KPDN). The Consumer Protection Act 1999 (Act 599) protects consumers from unfair practices and defective goods, with enforcement by the Consumer Protection Tribunal for claims up to RM50,000. Food concessions at shopping malls must additionally comply with the Food Act 1983 (Act 281), the Food Hygiene Regulations 2009, and licensing requirements from the Ministry of Health Malaysia.
The Contracts Act 1950 (Act 136) governs the enforceability of Retail Concession Agreements in Malaysia. Key provisions include Section 74 (compensation for breach) and Section 75 (liquidated damages). The agreement is categorised as a licence rather than a lease, meaning the concessionaire does not have statutory protection under the Contracts Act 1950 equivalent to that afforded to tenants under the English Landlord and Tenant Act — which does not apply in Malaysia.
Mall operators in major Malaysian retail hubs — Pavilion KL, Sunway Pyramid, KLCC, 1Utama Shopping Centre, IOI City Mall, and Gurney Plaza Penang — typically impose detailed operational standards, fit-out guidelines, and brand criteria on concessionaires as conditions of the concession agreement. These standards are typically incorporated by reference into the Retail Concession Agreement as mall operating handbooks.
The legal framework governing the Retail Concession Agreement (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Retail Concession Agreement (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2016 (Act 777) sets the foundational requirements.
When Do You Need a Retail Concession Agreement (Malaysia)?
A Retail Concession Agreement in Malaysia is required whenever a retailer or brand operates a space within a third party's premises rather than under a direct tenancy.
A Retail Concession Agreement is needed when an international fashion brand or food and beverage operator sets up a kiosk or pop-up store in a Kuala Lumpur or Johor Bahru mall under a short-term concession arrangement, allowing the grantor to generate revenue from otherwise underutilised common areas without creating a long-term tenancy interest.
A Retail Concession Agreement is required when a Malaysian department store like Parkson or AEON grants a cosmetics, jewellery, or apparel brand the right to operate a shop-in-shop (concession counter) within the department store, with the brand's own staff selling the brand's products and the department store charging a commission or a combination of minimum guarantee and turnover rent.
A Retail Concession Agreement is needed when a food court operator manages individual food stalls within a mall food court, granting each stall operator a concession to sell specified food categories under the Food Act 1983 (Act 281) and local authority (DBKL, MBPJ, or MBJB) hawker licence requirements.
A Retail Concession Agreement is required when an airport retailer — operating within Kuala Lumpur International Airport (KLIA), klia2, or a regional airport under Malaysia Airports Holdings Berhad (MAHB) — is granted a duty-free or landside retail concession under MAHB's competitive tender process.
A Retail Concession Agreement is needed when a brand operator wants to test a new market in Malaysia without committing to a full tenancy, using a short-term concession to assess customer response before signing a multi-year lease.
Parties in Malaysia should prepare a Retail Concession Agreement (Malaysia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Retail Concession Agreement (Malaysia)
A Malaysia Retail Concession Agreement must include the following key components.
Parties: Identify the grantor (mall operator or landlord) and the concessionaire with SSM registration numbers. State the grantor's authority to grant the concession — either as property owner under the National Land Code 1965 (Act 56) or as a principal tenant with subletting rights.
Concession Space: Precisely describe the concession space — unit number, floor, area in square metres, and whether it includes a kiosk pod, inline unit, or shop-in-shop. Attach a floor plan as a schedule.
Concession Period: State the commencement date, end date, and renewal option. Concession agreements in Malaysia are typically shorter-term than tenancies — 6 to 24 months — with renewal at the grantor's discretion.
Fees: State the concession fee structure — fixed monthly fee in RM, turnover-based rent (percentage of gross revenue, typically 5-15%), or a combination of a guaranteed minimum and a turnover component. Specify service charge, utility reimbursement, and marketing fund contribution obligations.
Permitted Use: Restrict the concession to specified product categories or brand names. The concessionaire must obtain all relevant licences — business licence from the local authority (DBKL, MBPJ, MBSA), food business operator licence from the Ministry of Health under the Food Act 1983 (Act 281), and any import permit for foreign goods under the Customs Act 1967 (Act 235).
Fit-Out and Reinstatement: The grantor typically requires the concessionaire to fit out the space to approved design specifications and to reinstate the space to its original condition at the end of the concession, at the concessionaire's expense.
Operating Hours and Standards: The concessionaire must operate during the mall's prescribed operating hours and comply with the mall's operational handbook, including staffing, housekeeping, and visual merchandising standards.
Termination: Address immediate termination rights for breach of operational standards, non-payment of fees, or loss of required licences. The grantor typically retains a broader right to terminate without cause on short notice in a concession compared to a tenancy.
Governing Law: Malaysian law, Contracts Act 1950 (Act 136), with High Court of Malaya jurisdiction.
Additional compliance elements for a Retail Concession Agreement (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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Forms Legal. (2026). Retail Concession Agreement (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/business/services/retail-concession-agreement-malaysia
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author = {{Forms Legal}},
title = {Retail Concession Agreement (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/business/services/retail-concession-agreement-malaysia}},
note = {Free legal document template. Based on Companies Act 2016 (Act 777)}
}Frequently Asked Questions
A Retail Concession Agreement and a Tenancy Agreement in Malaysia differ fundamentally in legal character. A Tenancy Agreement under the National Land Code 1965 (Act 56) creates an interest in land — the tenant obtains a legal right to exclusive possession of the premises for the term of the tenancy. Tenancy agreements for periods exceeding 3 years must be registered at the Land Registry to bind third parties. A Retail Concession Agreement, by contrast, creates a contractual licence to occupy and use a defined space for a specific business purpose — it does not create an interest in land and does not confer the rights of exclusive possession that characterise a tenancy. Concession agreements are easier for the grantor to terminate (subject to their express terms) and are not registrable at the Land Registry. Mall operators in Malaysia prefer concession agreements for kiosks and short-term retail arrangements to retain operational flexibility over their common areas.
A concessionaire operating a retail outlet in Malaysia requires several licences depending on the nature of the business. A business premise licence (Lesen Premis Perniagaan) issued by the relevant local authority — Dewan Bandaraya Kuala Lumpur (DBKL) for Kuala Lumpur, Majlis Bandaraya Petaling Jaya (MBPJ) for Petaling Jaya, or the equivalent authority for other areas — is required under the Local Government Act 1976 (Act 171). Food and beverage concessionaires must hold a food business operator licence from the Ministry of Health Malaysia under the Food Act 1983 (Act 281) and comply with the Food Hygiene Regulations 2009. Retailers of controlled goods (including alcohol, tobacco, cosmetics, pharmaceuticals) require additional licences from KPDN, MOH, or the National Pharmaceutical Regulatory Agency (NPRA). Import licences for foreign goods are issued by the Ministry of International Trade and Industry (MITI) under the Customs Act 1967 (Act 235).
A grantor's right to terminate a Retail Concession Agreement in Malaysia without notice depends on the express terms of the agreement. In the absence of an express right, Malaysian courts apply the Contracts Act 1950 (Act 136) principle that an agreement may only be terminated for breach after reasonable notice to remedy. However, because a Retail Concession Agreement creates a licence (not a tenancy), the grantor generally has broader rights to terminate than a landlord, particularly if the agreement includes an express right of immediate termination for specified breaches — such as non-payment, operating outside permitted hours, selling unauthorised products, or causing reputational damage. Courts will enforce clearly drafted immediate termination clauses as agreed terms of the contract. The Sessions Court of Malaysia has jurisdiction over commercial concession disputes for claims up to RM5 million, and the High Court of Malaya for higher-value disputes.
A Retail Concession Agreement in Malaysia is generally subject to stamp duty under the Stamp Act 1949 (Act 378). If the agreement is characterised as a licence fee agreement (not a lease), the duty is typically the fixed RM10 rate under Item 4 of the First Schedule. However, if the agreement creates rights equivalent to a tenancy — through exclusive possession and a defined term — it may be characterised as a lease and attract ad valorem duty under Item 1 of the First Schedule to the Stamp Act 1949, calculated on the annual rental value and the lease term: RM1 for every RM250 of annual rent for terms up to 1 year, RM2 per RM250 for terms of 1-3 years, and higher rates for longer terms. Parties should seek legal advice from a Malaysian advocate and solicitor to determine the correct characterisation and applicable stamp duty for their specific Retail Concession Agreement.
A Retail Concession Agreement (Malaysia) does not legally require a lawyer in Malaysia, and individuals and businesses may draft and execute the document independently. The Companies Act 2016 (Act 777) does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified Malaysia lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Federal Court of Malaysia has jurisdiction over disputes arising from this type of document, and Companies Commission of Malaysia (SSM) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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