Since 2009, foreign shareholding in 4-5 star hotels and associated restaurant services ahve been liberalised to allow 100% foreign equity participation. Previously, foreign shareholding was capped at 49%. Foreign investment in 3-star hotels and and associated restaurant services remains limited to 30%, and foerign investment remains prohibited in 1-2 star hotels and associated restaurant services.
"1. HOTEL AND RESTAURANT
1.1 Licensing and Registration 
Guidelines for licence of Hotel and Restaurant businesses are provided in the ‘Guidelines for Improvement of Issuance of Business Licence and Composite Hotel Licence (Amendment 2011)’ obtainable from the Ministry of Urban Wellbeing Housing and Local Government. 
1.2 Equity Policy 
The Government had announced on 22 April 2009 that  the following hotel and restaurant services would be among the 27 services sub-sectors that would be liberalised: 
- Hotel and Restaurant Services (for 4 and 5 star hotels only) (CPC 64110	and CPC 64199)
- Food Serving Services (for services provided in 4	and 5 star hotels only) (CPC 642)
- Beverage Serving Services for consumption on premises (for services provided in 4 and 5 star hotels only) (CPC 643)
[...]
Star Rating | Local Equity Condition
1–2 star | 100% Malaysian 
3 star | At least 30% Malaysian for applications received in 2015 and thereafter 
4–5 star | No equity condition [100% foerign equity allowed] [...]" (MIDA (2020), Malaysia: Investment in the Services Sectors - Booklet 9: Tourism and Travel Related Services).
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"[...] Liberalisation initiatives
In 2009, six sub-sectors  were liberalised to allow 100 per cent foreign equity participation: Theme Parks; Convention and Exhibition Centres (seating capacity of above 5,000); Travel Agencies and Tour Operators Services (for inbound travel only); Hotel and Restaurant services (4 and 5 star hotels only); Food Serving Services (4 and 5 star hotels only); and Beverage Serving Services for consumption on the premises (4 and 5 star hotels only).[...]"(MITI MyServices Portal (website) > Services by Sector > Tourism & Travel Related [accessed in November 2017])
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"2 . Regulations  for Foreign Investment
(a) Hotels (1-3 star) and Hotel Services: • Requirement of local incorporation; • The projects must be registered with the Ministry of Tourism Malaysia; • At least 70% of the shares must be held by Malaysians including 30% reserved for Bumiputera;
(b) Hotels (4-5 star) and Tourism Projects (Theme Parks / Recreational Camps etc.)  and Convention Centres (over 5,000 capacity): • Requirement of local incorporation; • The projects must be registered with the Ministry of Tourism Malaysia; • Based on Malaysia’s offer under the ASEAN Framework Agreement on Services (AFAS) (2007), Joint venture corporation with Malaysia individuals or Malaysia – controlled corporations or both and aggregate foreign shareholding in the joint venture corporation shall not exceed 49% foreign equity.
(c) Tour Services (tour Services, ticketing and reservation): • Requirement of license from the Ministry of Tourism and to be renewable annually.; • Requirement of specific licenses from other competent authorities.; • Joint ventures only with Malaysian individuals, or Malaysia controlled companies, and to be locally incorporated.; • Based on Malaysia’s offer under the ASEAN Framework Agreement on Services (AFAS) (2007), Joint venture corporation with Malaysia individuals or Malaysia controlled corporations or both and aggregate foreign shareholding in the joint venture corporation shall not exceed 49% foreign equity (for inbound only).; • Subject to Tourism Industry Act 1992 and other related regulations under the Act.; • Establishment of branches shall be subject to additional licensing requirements and to be renewable annually. [...]"(ASEAN (2008), ASEAN Investemnt Tourism Guide, p. 84-85.[based on information provided by the National Tourism Agency])
ASEAN (2008), ASEAN Investemnt Tourism Guide, p. 84-85.[based on information provided by the National Tourism Agency]
MITI MyServices Portal (website) > Services by Sector > Tourism & Travel Related [accessed in November 2017]
MIDA (2020), Malaysia: Investment in the Services Sectors - Booklet 9: Tourism and Travel Related Services
[<a href="https://www.mida.gov.my/wp-content/uploads/2020/07/20200131123840_BOOKLET-9-TOURISM-AND-TRAVEL-RELATED-SERVICES.pdf">Booklet</a>],[<a href="http://myservices.miti.gov.my/web/guest/tourism-travel-related">Website</a>],[<a href="https://asean.org/wp-content/uploads/2012/05/asean_tourism_investment_guide.pdf">Guide</a>]