How to Import Goods To Malaysia: A Step-by-Step Process

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. 

What are Import and Export Licensing Rules in Malaysia?

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. 

• Approvals for the import of certain other goods into Malaysia require additional approvals from the concerned departments per the below table:  

Goods category	Import permit/licensing authority – Malaysia
Animals – dead or alive	Wildlife Department & Department of Veterinary Services
Antiques	Museum Department
Chemicals	Ministry of Health
Pesticides	Ministry of Agriculture
Radio Active Materials	Director General of the Atomic Energy Licensing Board
Wastes & Toxins	Director General of Environmental Quality
Wheat or Meslin Flour	Ministry of Domestic Trade and Consumer Affairs

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. Importing goods into Malaysia involves two main cost factors: 

• Import Tariffs: These vary depending on the type of good you’re bringing in. Generally, industrial goods have a lower average tariff rate of around 6.1%. However, specific goods like alcohol, wine, poultry, and pork face higher tariffs. Additionally, tariffs tend to be higher for goods that compete with locally produced items.
• Sales and Services Tax (SST): This is a tax applied to most imported goods. The standard rate is 10%, but some goods qualify for a reduced rate of 5% or are exempt altogether.

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. 

Step-by-Step Process on Importing Goods Into Malaysia

Here’s how you can import goods 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
• The type of your company (proprietorship, partnership, limited liability)
• Your directors’ and shareholders’ names and addresses

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. Here are the key steps to applying for an import license in Malaysia:

• Determine Eligibility: Ensure you meet the criteria to become an importer, such as having a valid Malaysian passport, a registered company in Malaysia, legal age, a clean criminal record, and the financial capability to import goods.
• Choose an Import License Type: Decide if you need an Automatic Import License (AIL) or a Non-Automatic Import License (NAIL). AIL is the standard license, while NAIL is for goods subject to government controls.
• Obtain Company Registration (if applicable): If registering as a company, ensure it’s duly registered with the Companies Commission of Malaysia (SSM).
• Gather Required Documents: Collect essential documents like the Import Declaration Form, invoice, packing list, bill of lading, certificate of origin, and any other relevant permits or certifications.
• Complete Import Declaration Form: Download and fill out Form K from the Royal Malaysian Customs Department (RMCD) website, providing accurate details about the imported goods.
• Submit Application and Pay Fees: Submit the completed Form K and documents to the nearest RMCD office and pay the applicable application fees.
• Await Approval: The RMCD will process your application, with AIL applications typically approved within 24 hours and NAIL applications taking up to 2 months.
• Collect Import License: Once approved, you will receive an import license document valid for a specified period, authorising you to import goods within the defined terms.
• Register for Goods and Services Tax (GST): If importing goods subject to GST, you must register with the RMCD.
• Comply with Import Regulations: Adhere to all applicable regulations, obtain permits for restricted goods, pay import duties and taxes, and ensure goods meet Malaysian standards.

Once you have this MITI-approved permit, you can move on to the next stage. 

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
• A commercial invoice
• A bill of lading
• A packing list
• A certificate of origin

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: 

• Name and address of your overseas supplier 
• Your business name and address
• HS (harmonized system) code of the goods
• Quantity and description of the goods 
• Value of the goods
• Terms of payment

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

• Number of packages 
• Weight and dimensions of each package
• Contents 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 –

• A phytosanitary certificate for agricultural products
• A veterinary certificate for animal products
• A fumigation certificate for wood products
• A 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

Let’s evaluate the costs of your imported goods to Malaysia based on the following:  

• 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.

• 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.

• 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.

• 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.

• 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.

• 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 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.

• 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.

• 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
• A copy of your import license
• A copy of the commercial invoice
• A copy of the bill of lading
• A copy of the packing list
• A 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

You can consider the following factors before choosing products to import: 

• Demand: Is there a demand for the product in Malaysia?
• Competition: How much competition is there for the product?
• Price: Can you sell the product at a competitive price?
• Shipping costs: How much will it cost to ship the product to Malaysia?
• 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. 

In addition to the above, the language barrier may be an issue. This includes dressing appropriately, being aware of religious sensitivities, and avoiding offensive language. Malaysia is a multilingual country, with Malay, English, Chinese, and Tamil being the most commonly spoken languages. It is advisable to hire a translator to help you communicate with customs officials and other parties involved in the import process flow. 

Benefits When Importing to Malaysia

Businesses may benefit from importing to Malaysia through the: 

• Free Industrial Zones and Free Commercial Zones 

You may get an exemption from import tax if the goods are used to produce goods exported from Malaysia. The amount of exemption you can get will depend on the type of goods and the value of the goods.

Presently, there are 22 Free Industrial Zones and 21 Free Commercial Zones located across Malaysia. 

• Free Trade Agreements: 

Malaysia has free trade agreements with several countries. If you are importing goods from one of these countries, you may be able to get an exemption from import tax. The amount of exemption you can get depends on the type and value of the goods.

You must apply for a Preferential Certificate of Origin (PCO) through Malaysia’s single window clearance, Dagang Net, to get an exemption. 

Bilateral FTAs	Regional FTAs
Australia	Association of Southeast Asian Nations (ASEAN)
China	ASEAN-China Free Trade Agreement (ACFTA)
India	ASEAN-Korea Free Trade Agreement (AKFTA)
Japan	ASEAN-Japan Comprehensive Economic Partnership (AJCEP)
New Zealand	ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA)
Pakistan	ASEAN-India Free Trade Agreement (AIFTA)
Turkey	ASEAN-Hong Kong Free Trade Agreement (AHKFTA)
	Regional Comprehensive Economic Partnership (RCEP)
	Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

• Special scheme:

The Malaysian Customs Department has several special schemes that can help you get an exemption from import tax. These schemes are designed to promote certain industries or activities. 

To determine if you are eligible for a special scheme, contact the Malaysian Customs Department. 

Conclusion

Importing goods into Malaysia can be a great way to expand your business and reach new markets. By doing your research, getting the necessary permits and licenses, working with a freight forwarder, and factoring in all the hidden import costs, you can ensure that your import experience to Malaysia is positive. 

Alternatively, working with a reputable freight forwarder can make the process of importing goods into Malaysia smooth and efficient. 

FAQ’s