Malaysia is wedged between the South China Sea and the Andaman Sea. Because of this, it has been a trading center and strategic location for international trade for a long time. It also shares a bridge with Indonesia, Brunei, and Singapore. It has a land border with Thailand and a sea border with the Philippines and Vietnam. In 2019, trade in Malaysia was worth RM 1.8 trillion. Malaysia sent out RM 986.4 billion worth of goods and services and brought in RM 849.0 billion worth of goods and services. Malaysia has continued to loosen its rules on imports and exports to encourage trade around the world. It now ranks 21st for exports and 25th for imports.
Free commercial and free industrial zones
Malaysia has 13 Free Industrial Zones and 12 Free Commercial Zones (Free Industrial Zones). Companies that run out of these FCZs and FIZs can bring in equipment, raw materials, and finished goods without having to pay tariffs.
Free trade agreements
With India, Chile, Australia, Japan, Chile, Turkey, New Zealand, and Pakistan, Malaysia has six regional FTAs and seven bilateral FTAs. To take advantage of these FTAs, a trader needs to send their goods with a Preferential Certificate of Origin (PCO). To apply for a PCO, traders must get approval from “Dagang.net”, Malaysia’s single window. The Malaysian government has made an FTA calculator to make trade even easier. This tool helps traders figure out if their goods are eligible for lower tariffs.
How to export in Malaysia
To start importing or exporting from Malaysia, you have to go through a one-time registration process. The Companies Commission of Malaysia needs to know who wants to export or import. Once the company is registered, it can get a license from the Ministry of International Trade and Industry (MITI) to import and export. Dagang Net is the single digital window for all trade procedures (imports and exports) that is run by a private company.
The Ministry of International Trade and Industry, or MITI, is in charge of international trade, productivity, SMEs, industry, investment, automotive, the halal industry, development finance institutions, steel, and strategic trade. The indirect tax policy of Malaysia is run by the Royal Malaysian Customs Department (RMC or JKDM). It also controls the coming and going of goods, the enforcement of customs laws at the border, and drug crimes.
Documents that are needed to import and export
For export and import clearance, the Royal Malaysian Customs Department needs to see certain documents. The types of these documents depend on the goods that are being exported and imported. Customs officials need to see the right paperwork when a business wants to export or import goods. The following paperwork is needed:
- Bill of lading.
- Packing list.
- Certificate of origin.
- Customs export declaration.
- Commercial Invoice.
For things like chemicals, animals, coral, wheat, antiques, etc., the traders must get extra permissions.
Taxes and tariffs in exporting
Malaysia uses the Harmonized Tariff System (HTS) for all imports and exports that don’t come from an ASEAN member state. But the ASEAN Harmonized Tariff Nomenclature (AHTN) is taken into account for goods that come from and go to ASEAN members.
Based on ad valorem rates, the RMC puts a tax of 0 to 10% on goods that are exported. Malaysia’s Customs Act from 1976 says that 90% of the tariffs paid on goods that are exported can be refunded if the goods came from imported goods in the first place.
Escrow platforms like Tazapay are becoming a good choice for traders in Malaysia as globalization and cross-border trade grow. This agreement between the three parties is safe and reliable for both sellers and buyers. It’s easy because the Malaysian Ringgit can be used to pay for the Tazapay escrow service. It protects the buyer’s interests because the money is held until the goods are sent. It also protects the seller by showing that the buyer is willing and able to pay. It reduces the risks that come with cross-border payments and offers other benefits, such as supplier due diligence, transparency, limited processing fees, no hidden costs, timeline guarantees, and dispute resolution.
