Exporting to Malaysia

Decades of growth and stability have helped make Malaysia an industrialised, relatively open economy with consistent growth (IMF, 2019). Malaysia offers opportunities across a wide range of sectors for UK exporters as demand increases for a variety of goods and services.

Young and growing population

Malaysia has a young and growing population of over 30 million consumers (World Bank, 2018). An increasingly affluent middle class is willing to pay for quality. Malaysian society is multi-cultural and muti-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, Debenhams, Pinewood Studios and Tesco are already selling in Malaysia.

Gateway to South East Asia

Malaysia is part of the Association of Southeast Asian Nations (ASEAN), which includes Singapore, Thailand and Vietnam. Today, these four core countries represent the UK’s second-largest global export destination after the United States. As a region, ASEAN is predicted to become the world’s fourth largest market by 2030 (Baroness Fairhead CBE, 2018).

Ease of business

12th

out of 190 countries (World Bank, 2019)

Currency

Ringgit

Business language

English is widely spoken

GDP per capita

$10,942

UK is $42,558 (IMF, 2018)

Economic growth

4.7%

(IMF, 2018)

Time zone

GMT +8

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.

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 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 standardization 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.

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.

Intellectual Property

As a first step, we advise you to speak to an intellectual property lawyer if you think you need patent protection when exporting.

Malaysia conforms with international standards and is signatory to several international treaties and through local legislation.

The Intellectual Property Corporation of Malaysia (MyIPO) is responsible for IP protection.

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.