Industrial Building Lease (Malaysia)
Agreement Header
INDUSTRIAL BUILDING LEASE AGREEMENT This Industrial Building Lease Agreement is made on [Lease Start Date] between: LANDLORD: [Landlord Name] Address: [Landlord Address] (hereinafter referred to as the "Landlord") TENANT: [Tenant Name] Address: [Tenant Address] (hereinafter referred to as the "Tenant")
Demised Premises
1. DEMISED PREMISES 1.1 The Landlord hereby leases to the Tenant the following industrial building (the "Premises"): Address: [Premises Address] Title Reference: [Title Reference] Gross Lettable Area: [Gross Area] Free Industrial Zone / Bonded Status: [Freiz Status] 1.2 Permitted Use: The Tenant shall use the Premises solely for the following industrial purpose: [Permitted Use] 1.3 The Tenant shall not use the Premises for any purpose other than the Permitted Use without the prior written consent of the Landlord. The Tenant shall ensure that its use of the Premises is consistent with the land title conditions (syarat nyata) and complies with the relevant local authority's (PBT) Development Order (Kebenaran Merancang) and all applicable laws.
Lease Term and Rent
2. LEASE TERM AND RENT 2.1 Term: The lease shall commence on [Lease Start Date] and shall continue for a period of [Lease Duration] years. A lease exceeding three years shall be registered as a registered lease under Section 213 of the National Land Code 1965 (Act 56) at the relevant state land registry. 2.2 Fitting-Out Period: The Landlord grants the Tenant a rent-free fitting-out period of [Fitting Out Period] days from the commencement date for the Tenant to carry out fitting-out works, during which time the Tenant shall not be required to pay monthly rent. 2.3 Monthly Rent: Following the fitting-out period, the Tenant shall pay to the Landlord a monthly rent of [Monthly Rent] ([Rent Per Sq Ft]), payable in advance on the first day of each calendar month. 2.4 Security Deposit: The Tenant shall pay to the Landlord a security deposit of [Security Deposit] upon execution of this Lease, to be held as security for the Tenant's performance of its obligations. The security deposit shall be refunded within 30 days after the expiry or earlier termination of this Lease, subject to deduction of any amounts owed by the Tenant. 2.5 Utility Deposit: The Tenant shall pay a utility deposit of [Utility Deposit] for electricity (TNB) and water supply connections. 2.6 Renewal Option: [Renewal Option]. The Tenant shall give written notice to the Landlord of its intention to renew at least three months before the expiry of the initial term.
Regulatory Compliance
3. REGULATORY COMPLIANCE 3.1 DOSH Compliance: The Tenant shall comply with the Factories and Machinery Act 1967 (Act 139) and the Occupational Safety and Health Act 1994 (Act 514) administered by the Department of Occupational Safety and Health (DOSH). The Tenant shall register all notifiable factories and machinery with DOSH, conduct regular risk assessments, and maintain all required records. 3.2 Manufacturing Licence: If required under the Industrial Co-ordination Act 1975 (Act 156), the Tenant shall obtain a Manufacturing Licence from the Malaysian Investment Development Authority (MIDA) prior to commencing operations. 3.3 Environmental Compliance: The Tenant shall comply with the Environmental Quality Act 1974 (Act 127) administered by the Department of Environment (DOE). The Tenant shall not discharge trade effluent, emit air pollutants, or store scheduled wastes in excess of the DOE's permitted limits without the appropriate DOE licence. 3.4 Business Licence: The Tenant shall obtain and maintain a valid Business Licence (Lesen Perniagaan) from the relevant local authority (PBT) under the Local Government Act 1976 (Act 171) for the duration of the lease. 3.5 Fire Safety: The Tenant shall comply with the Fire Services Act 1988 (Act 341) and all requirements of the Fire and Rescue Department (BOMBA), including maintaining fire extinguishers, sprinkler systems, and emergency exits in good working order.
Fit-Out and Reinstatement
4. FIT-OUT, ALTERATIONS AND REINSTATEMENT 4.1 Fit-Out Works: The Tenant may carry out fitting-out works during the fitting-out period with the Landlord's prior written approval. All structural works require the Landlord's written consent and, where applicable, submission to DOSH and the local authority. 4.2 Machinery and Racking: The Tenant shall not install machinery, racking, or equipment that exceeds the structural floor loading capacity of the Premises. The Tenant shall submit racking installation drawings to the Landlord for approval and register heavy machinery with DOSH under the Factories and Machinery Act 1967. 4.3 Reinstatement: Upon expiry or termination of this Lease, the Tenant shall at its own cost remove all fit-out works, machinery, and racking (unless the Landlord agrees otherwise in writing) and reinstate the Premises to their original condition. IN WITNESS WHEREOF the parties have executed this Industrial Building Lease on the date first written above. Signed for and on behalf of the LANDLORD: ___________________________ [Landlord Name] Authorised Signatory Date: _______________ Signed for and on behalf of the TENANT: ___________________________ [Tenant Name] Authorised Signatory Date: _______________
Landlord
________________
Signature
Tenant
________________
Signature
What Is a Industrial Building Lease (Malaysia)?
An Industrial Building Lease in Malaysia sets out the rental terms, deposit, duration, and obligations agreed between landlord and tenant.
Industrial properties in Malaysia are held under land titles with the land category designated as 'industry' (industri) under Section 52 of the National Land Code 1965. Industrial land titles typically carry conditions of title (syarat nyata) and restrictions in interest (sekatan kepentingan) limiting use to specified industrial activities. A tenant occupying an industrial building must use the premises in accordance with the land title's conditions and the relevant local authority's (PBT) Development Order (Kebenaran Merancang), and must obtain a Business Licence (Lesen Perniagaan) from the local authority under the Local Government Act 1976 (Act 171).
Industrial tenants in Malaysia are subject to a thorough regulatory framework. The Factories and Machinery Act 1967 (Act 139) — administered by the Department of Occupational Safety and Health (DOSH) — requires registration of factories using machinery with a motor aggregate exceeding 30 kilowatts and inspection of boilers, pressure vessels, and lifting equipment. The Occupational Safety and Health Act 1994 (Act 514) imposes duties on employers and occupiers of industrial premises to maintain a safe working environment. The Environmental Quality Act 1974 (Act 127) and the Department of Environment (DOE) regulate industrial effluent discharge, air emissions, and hazardous waste disposal by industrial occupiers.
The Industrial Master Plan and investment incentives administered by the Malaysian Investment Development Authority (MIDA) provide context for foreign and domestic manufacturers leasing industrial space in Malaysia's industrial estates — including those in Johor, Selangor, Penang, and Perak — which are developed by state industrial development corporations such as MIDA, PKNS (Selangor), PDC (Penang), and PKNP (Perak).
The legal framework governing the Industrial Building Lease (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 Industrial Building Lease (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The National Land Code 1965 (Act 56) sets the foundational requirements.
When Do You Need a Industrial Building Lease (Malaysia)?
An Industrial Building Lease in Malaysia is required whenever a manufacturing, processing, or warehousing business occupies an industrial building under a formal tenancy arrangement.
An Industrial Building Lease is needed when a manufacturer — whether a Malaysian company or a foreign-invested company approved by MIDA under the Promotion of Investments Act 1986 (Act 327) — leases a factory building in an industrial estate such as Shah Alam Industrial Area, Batu Caves Industrial Area, or Bayan Lepas Free Industrial Zone to set up a production facility.
An Industrial Building Lease is required when a logistics or third-party logistics (3PL) operator leases a purpose-built industrial warehouse or distribution centre in an industrial park — such as those in Selangor, Johor (Iskandar Malaysia), or Klang Valley logistics hubs — and the building is classified under the industrial land category.
An Industrial Building Lease is needed when an SME (small and medium enterprise) leases a light industrial unit in a flatted factory or multi-storey industrial complex — such as those developed in Puchong, Balakong, or Ara Damansara — for light manufacturing, assembly, or trade purposes.
An Industrial Building Lease is required when a foreign investor setting up operations in Malaysia leases industrial space as part of a Manufacturing Licence application to MIDA under the Industrial Co-ordination Act 1975 (Act 156).
An Industrial Building Lease is needed to define clearly the permitted use, tenant's obligations regarding DOSH compliance, environmental compliance, and reinstatement at the end of the lease — protecting both landlord and tenant from disputes about condition, compliance, and liability.
Parties in Malaysia should prepare a Industrial Building Lease (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 Industrial Building Lease (Malaysia)
A complete Industrial Building Lease for Malaysia must contain the following essential elements.
Parties: Full legal names, SSM registration numbers, registered addresses, and the names of authorised representatives of both the landlord company and the tenant company. Directors signing on behalf of a company must be authorised by board resolution under the Companies Act 2016 (Act 777).
Premises description: Full address, lot number, land title reference, GLA (gross lettable area) in square metres or square feet, and a floor plan or site plan attached as a schedule. For free industrial zone properties (Free Industrial Zones administered by Royal Malaysian Customs, JKDM), the FIZ status and customs zone designation must be stated.
Permitted use: A precise statement of the permitted industrial use — for example, 'light manufacturing and assembly of electronic components', 'food processing and packaging', or 'warehousing and distribution of consumer goods'. Use of the premises for any other purpose requires the landlord's written consent.
Lease term: The commencement date and expiry date, typically three to five years for industrial leases, with options to renew. Leases exceeding three years must be registered as a registered lease under Section 213 of the National Land Code 1965.
Rental and service charges: Monthly rent in Malaysian Ringgit (RM), the rent review mechanism (if any), and any service charges or maintenance fees payable. Industrial rents in Malaysia are typically quoted in RM per square foot per month.
Regulatory compliance: The tenant's obligation to comply with the Factories and Machinery Act 1967 (Act 139), the Occupational Safety and Health Act 1994 (Act 514), the Environmental Quality Act 1974 (Act 127), and all applicable laws and local authority requirements. The tenant must obtain all necessary operating licences and permits.
Fit-out and alterations: The scope of any fit-out works permitted, the process for obtaining landlord approval, and the reinstatement obligation at the end of the lease.
Insurance: The landlord's building insurance obligations and the tenant's obligation to maintain public liability, fire, and machinery breakdown insurance during the lease term.
Additional compliance elements for a Industrial Building Lease (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.
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Industrial Building Lease (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/real-estate/commercial/industrial-building-lease-malaysia
"Industrial Building Lease (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/real-estate/commercial/industrial-building-lease-malaysia.
@misc{formslegal-industrial-building-lease-malaysia,
author = {{Forms Legal}},
title = {Industrial Building Lease (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/real-estate/commercial/industrial-building-lease-malaysia}},
note = {Free legal document template. Based on National Land Code 1965 (Act 56)}
}Frequently Asked Questions
A factory tenant in Malaysia typically requires several licences and approvals to operate legally. Under the Factories and Machinery Act 1967 (Act 139), factories using machinery with a motor aggregate exceeding 30 kilowatts must be registered with the Department of Occupational Safety and Health (DOSH) under the Ministry of Human Resources. Under the Industrial Co-ordination Act 1975 (Act 156), manufacturers with shareholders' funds of RM 2,500,000 or more, or with 75 or more full-time paid employees, must obtain a Manufacturing Licence from the Malaysian Investment Development Authority (MIDA). A Business Licence (Lesen Perniagaan) is required from the relevant local authority (PBT) under the Local Government Act 1976 (Act 171). For food processing operations, a Food Premises Licence under the Food Act 1983 and Food Regulations 1985 is required. For operations involving scheduled wastes under the Environmental Quality (Scheduled Wastes) Regulations 2005, a Prescribed Premises Licence from the Department of Environment (DOE) under the Environmental Quality Act 1974 (Act 127) is required.
Industrial building leases in Malaysia are typically for a term of three years, with an option to renew for a further one, two, or three years. Some purpose-built facilities and larger industrial premises are leased for five to ten years. Under Section 213 of the National Land Code 1965, a tenancy or lease exceeding three years must be registered as a registered lease at the state land registry (Pejabat Tanah dan Galian) to be binding on third parties — including any purchaser of the industrial land. Unregistered leases exceeding three years are enforceable between the landlord and tenant but are not binding on a bona fide purchaser of the land who takes title without notice of the lease. Industrial tenants seeking long-term security — particularly manufacturers who have invested significantly in factory fit-out — should ensure their lease is registered if it exceeds three years, and should negotiate a sufficiently long initial term with renewal options to protect their operational continuity.
Under the Occupational Safety and Health Act 1994 (Act 514) and the Factories and Machinery Act 1967 (Act 139), responsibility for DOSH (Department of Occupational Safety and Health) compliance in a leased factory in Malaysia is shared between the building occupier (tenant) and, in some respects, the building owner (landlord). The tenant, as the occupier of the factory, bears primary responsibility for maintaining a safe workplace — conducting hazard identification, risk assessments, providing personal protective equipment, registering all notifiable machinery with DOSH, and ensuring compliance with the Factories and Machinery Act 1967. The landlord is responsible for the structural condition of the building and the safety of fixed plant and infrastructure forming part of the leased building. The industrial lease should expressly allocate DOSH compliance obligations between the parties to avoid ambiguity. DOSH may issue prohibition notices and improvement notices under Section 24 of the OSH Act 1994 directly to the occupier for non-compliance.
In Malaysian industrial property and planning terminology, light industrial refers to manufacturing, assembly, processing, or warehousing activities that have minimal environmental impact, generate limited noise and vibration, and do not involve hazardous chemicals or large-scale effluent discharge. Examples include electronics assembly, food packaging, garment manufacturing, and distribution. Light industrial buildings are typically permitted in mixed industrial zones by local authorities. Heavy industrial refers to activities involving large-scale manufacturing, chemical processing, steel fabrication, petroleum refining, shipbuilding, or other activities with significant noise, vibration, emissions, or environmental hazard. Heavy industrial activities typically require dedicated heavy industrial zones, environmental impact assessments (EIA) approved by the Department of Environment (DOE) under the Environmental Quality Act 1974 (Act 127), and specific DOSH approvals under the Control of Industrial Major Accident Hazards Regulations 1996. Industrial tenants must ensure that their intended use falls within the land title's approved land category and the local authority's planning approval for the building.
A Industrial Building Lease (Malaysia) does not legally require a lawyer in Malaysia, and individuals and businesses may draft and execute the document independently. The National Land Code 1965 (Act 56) 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
Found an error? Let us knowRelated Documents
You may also find these documents useful:
Warehouse Lease Agreement (Malaysia)
A formal warehouse lease agreement for Malaysia, covering standalone warehouses, logistics hubs, and cold storage facilities under the Contracts Act 1950 and National Land Code 1965. Covers permitted use, storage restrictions, fire safety compliance under BOMBA requirements, racking installation, and insurance obligations for logistics and distribution tenants.
Commercial Tenancy Agreement (Malaysia)
A Malaysia commercial tenancy agreement for office, warehouse, or retail premises under the National Land Code 1965, Contracts Act 1950, and Distress Act 1951. Covers permitted use, rent review, reinstatement, signage rights, and assignment provisions.
Sale of Land Agreement (Malaysia)
A comprehensive sale and purchase agreement for the sale of vacant land or agricultural land in Malaysia under the National Land Code 1965. Covers parties, land description, purchase price, conditions, completion obligations, RPGT compliance, and state authority consent under NLC 1965. Suitable for freehold and leasehold land sales outside the housing development regime.