Exporting guide to Malaysia

Overview

Decades of growth and stability have helped make Malaysia an industrialised, relatively open economy with consistent growth. Despite the impact of the Covid-19 pandemic, Malaysia continues to offers opportunities across a wide range of sectors for UK exporters as demand picks up for a variety of goods and services.

Young and growing population

Malaysia has a young and growing population of over 30 million. An increasingly affluent middle class is willing to pay for quality. Malaysian society is multi-cultural and multi-lingual, but English is the business language and is widely spoken -particularly in metropolitan areas.

Respect for British brands

British brands are well respected in the market. Competition can be tough and price is a big factor in decision making, but companies like BAE Systems, BP, Prudential, Sports Direct and Unipart are already selling in Malaysia.

Gateway to South East Asia

Malaysia is part of the Association of Southeast Asian Nations (ASEAN), which includes Singapore, Indonesia Thailand and Vietnam. These 5 core countries represent a large global export destination for the UK.

Petronas Towers, Kuala Lumpur

Malaysia: at a glance

Economic growth

3.1%

Actual figure (IMF, 2021)
The UK is 7.4% (IMF, 2021, projected figure)

GDP per capita

$10,351

Actual figure (IMF, 2020)
The UK is $41,127 (IMF, 2020, projected figure)

Currency

Ringgit

Business language

English is widely spoken

Time zone

GMT +8

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Opportunities for exporters

There are opportunities for UK companies across a broad range of industries. Our trade advisers in Malaysia have identified particular opportunities for UK businesses in the following sectors:

Check for trade barriers

Trade barriers, such as tariffs or taxes, can raise costs, cause delays, or even stop you from exporting. Check for any issues that may impact your business when exporting.

See current trade barriers

See resolved trade barriers

Check duties and customs

Find information on how to export goods from the UK. View the duties, rules, restrictions, and the documents you need for your products.

See current duties and customs procedures

Doing business in Malaysia

Preparing to export

VAT

If you’re registered for VAT in the UK, it may be possible to zero-rate the goods you export to Malaysia, provided certain conditions are met.

The Sales and Service Tax (SST), Malaysia’s equivalent of VAT, is chargeable on the manufacture of taxable goods and various taxable services, in Malaysia.

The standard rate for the sales tax, chargeable on goods, is 10%, with a reduced rate of 5% and exemptions available for some goods. The standard rate for the services tax, applicable to specific taxable services is 6%, with a rate of RM25 per year on the provision of credit card of charge card services (EY, 2019).

Regulations

Malaysia’s business environment is governed by a number of regulations to maintain competition, and protect consumers and other stakeholders. These include:

  • Fair and free competition – the Malaysian Competition Commission investigates complaints on anti-competition behaviours, carries out market reviews and imposes penalties on offenders
  • Price control and anti-profiteering – Government can penalise business that make “unreasonable high profits” on any goods sold or services supplied
  • Conduct in take-overs and mergers – Code of Take-overs and Mergers 2016 aims to ensure that all shareholders are treated equally in a take-over, and the acquisition of voting shares takes place in an efficient, competitive and informed market
  • Limits on foreign equity ownership – Regulations on specific ownership requirements apply depending on sector.

Standards

The Standards Industrial Research Institute of Malaysia (SIRIM) acts as the national body for standards and quality, and promoter of technological excellence in Malaysian industry. Its functions include the following:

  • to promote and undertake scientific industrial research
  • to boost industrial efficiency and development
  • to provide technology transfer and consultancy services
  • to develop Malaysian standards and to promote standardisation and quality assurance for greater competitiveness
  • to enhance public and industrial welfare, health and safety

The Department of Standards Malaysia is the National Standards Body in Malaysia, which develops and promotes Malaysian standards. It is also the National Accreditation Body that accredits conformity assessment bodies for testing, calibration labs, inspection and certification bodies.

Trade barriers

Check for any reported barriers to trading with Malaysia.

Report any trade barriers that are affecting your business so we can help fix them.

Operating in Malaysia

Challenges

Competition in Malaysia can be tough, and potential partners and buyers will make decisions on commercial grounds. Malaysians often expect to develop a personal relationship and establish trust before doing business.

Entry into Malaysia

After almost a year of closed borders due to Covid-19, restrictions have now been partially lifted to allow some business travellers into the country.

Travel around the region is expected to continue to be problematic. For up to date travel advice check the latest travel-advice.

Intellectual Property

Intellectual property (IP) rights are territorial. Rights granted in the UK do not provide protection elsewhere. You should consider getting IP protection abroad if you want to trade overseas or sell to overseas customers via the internet.

The Intellectual Property Office’s International IP Service provides practical information to help you protect, manage and enforce your IP abroad. Further support can be accessed through the service’s network of IP attachés. Based in key UK export markets, they provide guidance to British businesses on local IP matters.

Payment terms

The Financial Services Act 2013 is the main legislation governing dealings and transactions in foreign currency, while the Exchange Control Notices issued by the Central Bank of Malaysia embody the general permissions and directions of the Controller of Foreign Exchange. Some of the controls put in place are:

  • remittances abroad by residents
  • investments abroad by residents
  • borrowings in foreign currency by residents
  • borrowings in Ringgit by non-residents

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.