There are no restrictions for kitesurfing in any public areas in Malaysia. However show some respect to the locals especially the local fisherman. 

Below map showing list of popular kitesurfing spots in Malaysia. 

Wind conditions:
November to March - Best wind conditions from North East along East coast of peninsular Malaysia. Do expect lots of rain in the beginning of the season and wind chills of around mid twenties degree.
April to October - Wind is expected to be favourable on the West coast of peninsular Malaysia. However on the East coast, the wind is lighter but is more than enough for kite foiling.

Water conditions:
During the whole year round, the sea temperature are pretty warm in the high twenties.