{"id":79511,"date":"2024-02-23T14:47:10","date_gmt":"2024-02-23T06:47:10","guid":{"rendered":"https:\/\/iqiglobal.com\/blog\/?p=79511"},"modified":"2026-01-09T16:02:46","modified_gmt":"2026-01-09T08:02:46","slug":"running-airbnb-services-in-malaysia","status":"publish","type":"post","link":"https:\/\/iqiglobal.com\/blog\/running-airbnb-services-in-malaysia\/","title":{"rendered":"Is it Illegal to Run an Airbnb Service in Malaysia? We Have The Answer, Plus A Game-Changing Airbnb Hack"},"content":{"rendered":"\n

The contents of this article were contributed by Joyce Yeoh<\/mark><\/a><\/strong>, IQI Real Estate Negotiator & Head of Team<\/em>.<\/p>\n\n\n\n

Version: CN<\/a><\/strong><\/em><\/p>\n\n\n\n

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Did you know that it’s illegal to run an Airbnb in Penang?<\/strong><\/p>\n\n\n\n
You probably didn’t – that’s your fun fact of the day<\/strong> to tell your friends and family.<\/p>\n\n\n\n
However, there’s more to it than what’s on the surface. It can<\/em> be legal to run an Airbnb in Penang, if you follow these tips.<\/p>\n\n\n\n
Let’s break down this topic right here!<\/p>\n\n\n\n
\n\n\n\nRunning an Airbnb in Malaysia<\/h2>
1. How does the Airbnb service in Malaysia work?<\/a><\/li>
2. So, is it legal to run Airbnb services in Malaysia?<\/a>
1. Sabah<\/a><\/li>
2. Penang<\/a><\/li><\/ul><\/li>
3. Understood! But what’s the difference between residential title and commercial title?<\/a>
1. Residential Title<\/a><\/li>
2. Commercial Title<\/a><\/li><\/ul><\/li>
4. What is a leaseback agreement?<\/a>
What’s great about leaseback agreements?<\/a><\/li><\/ul><\/li>
Conclusion<\/a><\/li><\/ul><\/div>\n\n\n\n
\n\n\n\n
1. How does the Airbnb service in Malaysia work?<\/h2>\n\n\n\n
The first thing we should address is: How does Airbnb work in Malaysia, actually?<\/strong><\/p>\n\n\n\n
Two things to know:<\/p>\n\n\n\n
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The Urban Wellbeing, Housing, and Local Government Ministry<\/strong> defines Airbnb as an online transaction<\/strong> between a host and a traveler.<\/li>\n\n\n\n
Airbnb operates as an agreement<\/strong> between parties who connect via the platform to rent out or let<\/strong> residential properties for several days.<\/li>\n<\/ol>\n\n\n\n
2. So, is it legal to run Airbnb services in Malaysia?<\/h2>\n\n\n\n
There are no specific federal laws<\/strong> in Malaysia specifically addressing Airbnb. <\/p>\n\n\n\n
However, the regulation varies by state<\/strong> within Malaysia.<\/p>\n\n\n\n
Let’s explore these regulations together:<\/p>\n\n\n\n
1. Sabah<\/h3>\n\n\n\n
In 2017, the Sabah state government<\/strong> declared that operating Airbnb units in residential buildings<\/strong> is illegal<\/strong> to protect the hotel industry from the from the rapid growth of short-term rentals.<\/p>\n\n\n\n
However, owners of properties on lands zoned for commercial or commercial mixed-use<\/strong> can rent out their units as short-term rentals<\/strong>. <\/p>\n\n\n\n
They must apply for a lodging house license<\/strong> and comply with fire safety requirements<\/strong>.<\/p>\n\n\n\n
2. Penang<\/h3>\n\n\n\n
The Penang Local Government<\/strong> introduced guidelines in 2023 to regulate short-term stays<\/strong> in residential high-rises and landed properties<\/strong>.<\/p>\n\n\n\n
Similarly, you are allowed<\/strong> to run Airbnb services if your property is under a commercial title under the Housing Development Act (HDA)<\/strong> – but not<\/strong> if it’s under a residential title.<\/strong><\/p>\n\n\n\n
In conclusion: Airbnb is legal<\/strong> in Malaysia, but you should definitely have a look into the state regulations if you plan to rent out your property.<\/p>\n\n\n
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$\"\"$ <\/figure>\n<\/div>\n\n\n
3. Understood! But what’s the difference between residential title and commercial title?<\/h2>\n\n\n\n
Essentially, it’s quite easy to tell the difference between the two. It’s important to know so you can make the correct property decisions down the line.<\/p>\n\n\n\n
Let’s get into it:<\/p>\n\n\n\n
1. Residential Title<\/h3>\n\n\n\n
Comprises<\/strong> both landed<\/strong> and stratified developments<\/strong>.<\/p>\n\n\n\n
Landed developments<\/strong> are properties such as bungalows<\/strong>, semi-detached houses (semi-Ds)<\/strong>, terrace houses<\/strong>, townhouses<\/strong>, and cluster homes<\/strong>.<\/p>\n\n\n\n
Stratified developments<\/strong> are apartments<\/strong>, flats<\/strong>, condominiums<\/strong>, and other similar residential units.<\/p>\n\n\n\n
Basically, residential properties are primarily for residential purposes<\/strong>, where people live and stay.<\/p>\n\n\n\n
2. Commercial Title<\/h3>\n\n\n\n
Comprises<\/strong> various commercial components<\/strong> from mixed developments<\/strong>, such as office units, shop lots, retail lots and hotels.<\/p>\n\n\n\n
In sum, commercial properties that serve business, trade, and commercial activities<\/strong>.<\/p>\n\n\n\n
Office buildings, retail spaces, and hotel properties fall under the commercial title<\/strong>.<\/p>\n\n\n\n
The lines have been blurred these days, though…<\/strong><\/p>\n\n\n\n
In recent years, developers have become more creative. <\/p>\n\n\n\n
They’ve introduced properties that blend residential and commercial aspects<\/strong>. <\/p>\n\n\n\n
For instance: serviced apartments<\/strong>, Small Office, Home Office<\/strong> (SoHo), Small Office, Flexible Office<\/strong> (SoFo), and Small Office, Versatile Office<\/strong> (SoVo).<\/p>\n\n\n\n
It can be a bit more confusing these days to tell if your property is considered residential or commercial. So be sure to check first!<\/p>\n\n\n
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$\"\"$ <\/figure>\n<\/div>\n\n\n
Okay, got it! Is there an easier way to run Airbnb services legally, though?<\/strong><\/h4>\n\n\n\n
We hereby introduce you to the hidden world of ✨ <\/em>leaseback agreements<\/mark><\/a><\/strong> ✨<\/em><\/p>\n\n\n\n
4. What is a leaseback agreement?<\/h2>\n\n\n\n
In Malaysia, a leaseback agreement<\/strong> is a strategic arrangement that allows a company or property owner to unlock funds, enhance cash flow, and increase profits. <\/p>\n\n\n\n
Let’s make this easier to understand:<\/em><\/p>\n\n\n\n
Imagine you own a valuable piece of property<\/strong>, like a building or land, but you need cash urgently. <\/strong><\/p>\n\n\n\n
Instead of selling the property<\/strong> outright, you find an investor<\/strong> who agrees to buy it from you. <\/p>\n\n\n\n
However, instead of moving out, you continue using the property<\/strong> by renting it back from the investor. <\/p>\n\n\n\n
This way, you get the cash you need<\/strong> while still being able to use the property <\/strong>for your business or personal use.<\/p>\n\n\n
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$\"\"$ <\/figure>\n<\/div>\n\n\n
Let’s understand the parties involved<\/strong> here:<\/p>\n\n\n\n
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Selling Party (seller-now-tenant)<\/strong><\/li>\n<\/ol>\n\n\n\n
You’re the one selling the property<\/strong> but still need to use it for your operations. <\/p>\n\n\n\n
By selling it and leasing it back<\/strong>, you get immediate cash<\/strong> without losing access to the property.<\/p>\n\n\n\n
2. Buyer (your now landlord)<\/strong><\/p>\n\n\n\n
The investor who buys your property<\/strong> becomes your landlord<\/strong>. <\/p>\n\n\n\n
They earn money by renting out the property to you<\/strong> for a long period. <\/p>\n\n\n\n
It’s a win-win situation as they get a stable income, and you get the cash you need.<\/p>\n\n\n\n
Joyce Yeoh<\/strong>, seasoned IQI agent goes into this in our Agent Shoutout video:<\/p>\n\n\n\n

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