Surge into Import and Export Business in Malaysia

Import and export businesses are extremely significant for any country’s economic development. Malaysia, being a business enthusiast country, their Consulate and/or Embassy has industry directories and information about local manufacturers. Additionally, the Malaysian government offers many helpful services and a great deal of information about how to initiate a new business.

Licenses and Permits

One of the first and most essential characteristics of beginning a new import export business in Malaysia is to devise a secure business plan. Then, you will want to give your company a suitable name, and register your company with the necessary Malaysian government offices. You will also require a business license and numerous permits based on the kind of products you will be working with. The import export business in Malaysia is highly lucrative and countries globally are dependent on such goods and services.

Opting a Product

New entrepreneurs should initiate with low risk products like consumer goods, clothing, and accessories. Owing to the complexity of the needed licenses, refrain importing and exporting of high-risk items like firearms, liquor, pharmaceuticals, and chemicals. Nonetheless, should your business fall under the high-risk category, a higher degree of due diligence and approval will be required. Some industries (ie medicine / drugs, precious metals, commodities and any oil and gas related products) do impose restrictions and quotas on the quantity of imported and exported goods.

Read More About: The benefits of business registration in Labuan.

Working with Customs Brokers

It is suggested that new entrepreneurs check with their own country’s Embassy and the Malaysian government’s Embassy both to make sure that the product is not restricted. Networking with other individuals who have experience in a specific field can be of great worth. Customs brokers can be helpful in finishing the necessary paperwork so that there are no delays at the border. In some instances, you can be fined for mistakes on your paperwork.

Freight Forwarders

Shipping and handling are also a complicated area for new business owners. Do adequate research before involving with the services of a freight forwarder. It is essential to ask the relevant questions and check out any companies before working with them. The International Chamber of Commerce website has posted a list of the standard trade definitions involved in import and export business activities. This is called Incoterms and it can be very beneficial when attempting to understand the shipping and payment responsibilities for all parties concerned.

Read More About: The procedure of setting up offshore account.

Letters of Credit

Funding for your new import export business can also be tough to acquire. Experts advise working with a financial professional to put together an extensive packet of information about your company. Documents must include letters of credit, a company profile, your business plan and other relevant data about you and your business. If you work with a bank in your native country, then discuss with your banker about a letter of credit. In some instances, particularly with new businesses, it will be mandatory to pay for goods in advance.

Look for information about international trade and try to be as prepared as you can prior to moving forward. You will require adequate funding, but also will profit greatly from knowledge of the Malaysian import export industry before moving forward with your new business in Malaysia.

Kinds of Business to Venture

Following is an outline of top products imported into Malaysia :-

  • Electrical Machinery : USD 68,306,464,195
  • Oil & Mineral Fuels : USD 33,079,271,094
  • Industrial Machinery : USD 23,747,516,349
  • Fats & Oils : USD 13,480,125,097
  • Precision Instruments : USD 7,827,101,322
  • Plastics : USD 7,438,894,696

Similarly, the following list demonstrates the country’s top export products :-

  • Electrical Machinery : USD 54,369,036,503
  • Oil & Mineral Fuels : USD 24,740,978,738
  • Industrial Machinery : USD 22,687,165,481
  • Plastics : USD 7,659,045,837
  • Industrial Machinery : USD 22,687,165,481
  • Motor Vehicles & Parts : USD 5,439,863,326

Machinery and electronic gadgets have significant roles in both the country’s export and import, making these products highly competitive in the country. If you are seeking for worthy export business ideas, perhaps electronics is a good start.

Tariffs and Taxes

Malaysia adheres the Harmonized Tariff System (HTS) for imported and exported goods not sourcing from members states of the Association of Southeast Asian Nations (ASEAN). For imported and exported goods arriving from ASEAN member states, Malaysia follows the ASEAN Harmonized Tariff Nomenclature (AHTN).

Malaysian Customs apply either a lowered tariff or else a tariff exemption on raw materials imported into Malaysia for use in the manufacture of exported goods – specifically when such raw material is tough to source domestically. Malaysian Customs impose a standard goods and service tax (GST) on imported goods at 6 percent.

Malaysia continues to liberalise its customs regulations and enhance the ease of importing and exporting out of the country. As a member of the ASEAN and participant in many regional and bilateral FTAs, Malaysia offers traders great opportunities for import and export businesses in.

However, goods-specific regulation continues to cause disarray with importers and exporters. Employing experts with up-to-date local knowledge can help exporters and importers to not only prevent customs-related delays and frustrations but also to make sure that import and export activity takes place on schedule and remains profitable.

If you are looking to set up your own business for import and export purposes in Labuan and Asia, let us help you with the process. Contact our QX Trust consultants at +60 3 9212 6940 or for a free consultation.