Introduction

Malaysia is a major trading nation in Southeast Asia, with imports accounting for a significant portion of its economy. The country imports a wide range of goods, including machinery, electronics, chemicals, and food.

There are a number of reasons why businesses import goods to Malaysia. More prominent ones include educated, skilled yet low-cost labor to produce goods and access to a rapidly growing market of over 30 million people. 

Importing goods into Malaysia can be complex. Learning first-hand knowledge about the importing process will help you factor in all hidden costs when negotiating prices with your overseas supplier. Continue reading this blog to learn key aspects when importing goods for business to Malaysia.

Understanding Import Regulations

Before diving into the importation process, it’s crucial to understand Malaysia’s import regulations. The country has specific laws and requirements governing the importation of goods, which vary depending on factors such as the type of product, its intended use, and the country of origin. Familiarize yourself with Malaysia’s Customs Act 1967 and the Customs (Prohibition of Imports) Order 2017 to ensure compliance with regulations.

There are a number of import and export licensing rules in Malaysia. These rules are designed to safeguard the local economy and security, as well as to ensure the safety of its citizens. The Customs (Prohibition of Import) Order 2017 put absolute prohibition and a conditional prohibition on selected import goods to Malaysia. 

• Generally, any imported goods sensitive to any religion, or belief in Malaysia are absolutely prohibited. 
• Certain imported items, including pharmaceutical items, rubber products, intoxicants, wildlife, food & beverage products, etc., require import licensing. 
• All incoming processed livestock and meat products must be certified halal. Interestingly, any items originating from Israel may also face conditional restrictions. You may refer to the full list here. 

How Much are Customs Fees to Import Goods to Malaysia?

Malaysia’s import tax is on an ad-valorem basis. The custom fee that you will need to pay to import goods to Malaysia depends on the value of the goods. Any imported goods to Malaysia attract 5% or 10% or a specific rate depending on the category of goods. 

There may be an additional Malaysian Custom Excise import levy on some foods, such as a 15% tax on some drinks. Further, Malaysia’s import taxes and duties on goods already having a significant local production are set at a higher rate to protect local small businesses. 

The Malaysian Customs Department has a tariff schedule listing applicable duties and import taxes. You can visit the official website or contact the concerned government department directly to answer yourself how much customs fees are to import goods to Malaysia. 

Step-by-Step Process on Importing Goods Into Malaysia

Here’s step by step how to import to Malaysia : 

Step 1: Receive a registration

Your first step in importing goods into Malaysia begins with the Companies Commission of Malaysia (SSM). To register, you must provide the following information:

• The name of your company
• Your business address
• Your directors’ and shareholders’ names and addresses
• The type of your company (proprietorship, partnership, limited liability)

Step 2: Get an import license (optional)

Not all, but some commodities require an import license. You can visit the Ministry of International Trade and Industry (MITI) website or contact the MITI Trade Licencing Division to see if your items require a license to import goods to Malaysia. You can apply for one via the MITI e-licensing system. 

Step 3: Obtain a Customs Import Permit 

Once you have obtained an import license, you must get a customs import permit. To do this, you will need to submit the following documents to the Royal Malaysian Customs Department :

• Your import license
• Commercial invoice
• Packing list
• Certificate of origin
• Commercial invoice

Step 4: Select an overseas supplier

Once you have chosen the products you want to import into Malaysia, you must find a suitable overseas supplier. There are many ways to find suppliers, including online directories, trade shows, and word-of-mouth.

When finding an overseas supplier in Malaysia, there are a few key things to look for.

• Reputation: Check the supplier’s reputation online and with other businesses that have worked with them. Additionally, if possible, you can visit their factory and request samples.
• Communication: Make sure you can reach the supplier easily and that they respond to your inquiries. 
• Lead time: Ask the supplier how long it will take to make and deliver your purchase. This is important if you have a tight deadline.
• Price: Get quotes from multiple suppliers to ensure you get the best possible price. 

Step 5: File documentation for importing goods into Malaysia

For importing goods into Malaysia, the following papers are necessary :

• Import declaration form: You may need to file the following customs forms as applicable electronically through the privatized single digital window called Dagang Net to import goods to Malaysia. 

Form No.	Description
Customs No.1 (K1)	Declaration of Goods Imported
Customs No.3 (K3)	Permit to Transport Duty Paid Goods Within The Federation
Customs No.8	Application / Permit / to Move / Transship Duty Unpaid Goods
Customs No.9	Permit to remove goods from Warehouse

• Invoice: It must be in English and include the following information : 

1. Name and address of your overseas supplier 
2. Your business name and address
3. HS (harmonized system) code of the goods
4. Value of the goods
5. Quantity and description of the goods 
6. Terms of payment
   

• Packing list: The list must be in English and include the following information :

1. Number of packages
2. Contents of each package
3. Weight and dimensions of each package
   

• Bill of Lading (BL) or Air Waybill (AWB): The BL or AWB must be original and in English. It must show the carrier’s name, loading port, discharge port, and the date of shipment.
• Certificate of origin: It is required for goods that are subject to preferential tariffs. Usually, the Chamber of Commerce or another authorized body in the country of origin issues this certificate. 
• Import permit – This is required for certain goods, such as food, drugs, and hazardous materials. The relevant government agency must obtain the permit before the goods can be imported.
• Other documents : 

1. Phytosanitary certificate for agricultural products
2. Fumigation certificate for wood products
3. Veterinary certificate for animal products
4. Testing certificate for certain goods, such as electrical appliances

It is important to note that the documentation requirements for importing goods into Malaysia can change at any time. It is always advisable to check with the Malaysian Customs Department for the latest information.

Step 6: Evaluate the Costs of Importing Your Goods to Malaysia

Before doing import to Malaysia, evaluate the costs of your imported goods to Malaysia based on the following :  

• Freight costs: This includes the cost of shipping the goods from the country of origin to Malaysia. The freight cost varies depending on the weight and volume of the goods, the distance they are being shipped, and the mode of transportation used.
• Customs duties and taxes: Goods imported into Malaysia are subject to customs duties and taxes. The amount of duty and tax will vary depending on the imported goods type, their value, and the country of origin.
• Negotiation with overseas suppliers: You must negotiate a price for importing goods to Malaysia. When negotiating the price, consider the shipping cost, Malaysia import tax, customs fee, and any other expenses.
• Brokerage fees: A freight forwarder or customs broker may charge a fee to handle the customs clearance process. The cost varies according to the services offered and how complicated the package is.
• Market and sell the goods: Once the goods are in your possession, you can start marketing and selling them. You may have to factor in costs incurred in marketing and selling goods online, including through your own website, e-commerce marketplaces, and social media.
• Warehouse the goods: If the goods need to be stored in a warehouse before they are distributed, you must pay for warehousing fees. The fee will vary depending on the time the goods are stored and the size of the warehouse space.
• Fulfill orders: When a customer orders a product from you, you will need to fulfill the order. The fulfillment cost will vary depending on the mode of transportation used, shipping distance, shipment size, and other operational expenses. 

Step 7: Compare your freight options

Your overseas supplier will determine the freight forwarder for exporting to Malaysia. You may indicate your preference for a particular freight forwarder for importing goods into Malaysia based on the following factors: 

• Shipping method: There are several shipping methods available, including air freight, sea freight, and express shipping. Each method has its advantages and disadvantages, so it is important to choose the best method for your needs.
• Shipping cost: Shipping costs can vary depending on the weight and size of your shipment, as well as the shipping method you choose. The most expensive choice is air freight, while the least expensive is sea freight.
• Shipping time: It can vary depending on the shipping method you choose. For instance, air freight is the fastest but the most expensive option. Sea freight is the slowest option but also the most affordable.
• Customs clearance: The process of releasing imported goods at Malaysian customs can be time-consuming and costly, so it is important to factor this into your shipping costs.

Step 8: Track your goods

Once you have paid the import duty and Malaysia import taxes, you will need to clear your goods through customs. To do this, you will need to present the following documents to the Customs Department :

• Your customs import permit
• Copy of the commercial invoice
• Copy of the bill of lading
• Copy of your import license
• Copy of the packing list
• Copy of the certificate of origin

Once your goods have been cleared through customs, the shipment is transported from customs to the final destination by your chosen courier provider. You can track your goods with your courier provider.  

Tips When Importing to Malaysia

If you wan to start import to Malaysia, you can consider the following factors before choosing products to import : 

1. Demand: Is there a demand for the product in Malaysia?
2. Price: Can you sell the product at a competitive price?
3. Competition: How much competition is there for the product?
4. Shipping costs: How much will it cost to ship the product to Malaysia?
5. Customs duties: Will you have to pay any customs duties on the product?

Once you have decided which product to import, make sure to : 

• Use the privatized single digital window called Dagang Net to declare your imported goods for business. 
• Use uCustoms for goods clearance. It offers a “Single Window” for customs clearance and is a fully integrated, end-to-end customs modernization solution.
• Pay all duties/customs taxes imposed on imported goods to Malaysia in advance for faster release. 
• Work with a freight forwarder to help you with the import process, including arranging shipping, clearing customs, and delivering the goods to your destination.
• Don’t forget to insure your imported goods to Malaysia against loss or damage during shipping. 
• Consider consulting an experienced freight forwarder or customs broker before importing goods into Malaysia.

Easy Way How to Import to Malaysia

If you are looking for a reliable partner to import to Malaysia, AsiaCommerce is a procurement company that provides several services such as comprehensive market research, arranging partnerships in local industry, and creating sales programs based on market research.

Our Market Insight Research, Business Partnership Engagement, and Business Registration and Establishment services can help you expand and develop your business, register and establish your products and company.

Our strategy consulting services domain focuses on supporting private sector clients with comprehensive and specialized development regarding the company’s needs and also on the public sector for a broader scope.

If you’re interested in exploring market opportunities in Indonesia, visit our service page for more information. Our team will work with you every step of the way, from finding a supplier, shipping door-to-door, and handling import documents to ensure your market entry to Indonesia.