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Malaysia

Doing business

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(Last updated: 19 Aug 2008)
 

Business opportunities

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).


In conjunction with the market profiles, the Opportunities Online portal may be a useful addition to your information sources. The database established by Austrade aims to deliver international sales leads ('export opportunities'), including tenders, identified by our overseas network to Australian businesses.

Registering is simple and once this is done you will have the option of accessing a weekly newsletter featuring the most recent opportunities uploaded onto the system in industry sectors of interest to you. Another feature is the ability to view, and also print, the complete page of opportunity details.

For general inquiries concerning Austrade’s services, please contact Austrade Direct on 13 28 78.

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Business etiquette

Business tips

English language is normal for business discussion.


Personal relationships are an important part of business in Malaysia. It is important to take the time to develop them, often over a meal.


Exchange of business cards is a common practice. Cards should be offered to another person  with two hands and vice versa.


Respect for both age and title are an important part of the culture. Many business people have honorific titles such as ‘Tan Sri’ (approxomates a knighthood) or ‘Dato'. Address them using these titles, for example, ‘Tan Sri Lim’ or ‘Dato Lim’ (where ‘Lim’ is the surname). During speeches, it is normal practice to acknowledge dignataries during the introduction.


While ‘Mr’ and ‘Mrs’ are normally used in addressing business contacts, Malay men are addressed as ‘Encik’ (pronounced as ‘Inchik’) and Malay women are addressed as Cik (pronounced as ‘Chik’) if they are not married and ‘Puan’ if they are married. 'Tuan' can also be used to address a man if he is married, but it is not commonly used.


Malaysians tend to dress more formally than Australians.  It is recommended that men wear ‘dress’ trousers, a long sleeve shirt and tie.  On more formal occasions and initial meetings it is wise to wear a suit coat. Women dress variably in Malaysia ranging from the traditional to the very modern.  It is recommended that women dress relatively conservatively.  This usually means a knee length skirt or trousers and a top which covers the shoulders. Malays will fast for one month prior to Hari Raya Puasa (Malay New Year). During this month avoid inviting Malays to lunch or dinner meetings.


Malaysia is ethnically and religiously diverse hence it observes a number major festivals during the year including Deepavali (Hindu), Christmas, Chinese New Year and Hari Raya Puasa (Islam).  The different ethnic groups commonly take holidays around these festivals hence trying to arrange appointments at these times can be difficult.  Malays will fast for one month prior to Hari Raya Puasa and during this period it is wise to avoid lunch, late afternoon and dinner meetings.


In formal situations (especially meetings with royalty, government or religious officials), it is considered improper to cross your legs. If attending a fuction with Malaysian royalty, avoid wearing the colour yellow as this is the royal colour.


Social etiquette


Use both hands at all times when giving or receiving. Use of only the right hand is acceptable. Avoid using only the left hand.


Malaysian men and women shake hands gently and Malay women may not shake hands as a form of greeting.


Avoid touching and pointing. If you need to point, use the thumb of your right hand.


Accept at least a little of any refreshments offered.


When inviting Malaysians to lunch or dinner, consider their ethnic origins (eg. pork and alcohol are forbidden to Muslims, only halal food products should be used).


When entering Malaysian homes and mosques, shoes should be taken off and left outside. Females are prohibited from entering mosques.


Dress at social functions is often ‘smart casual’ which typically means a smart pair of trousers and an open necked shirt for men.  Again it is recommended that women dress relatively conservatively.


If going to a private dinner at a Malaysian home, a small gift of chocolates or flowers would be greatly appreciated by your host.  If your host is Chinese, a bottle of red wine would also be acceptable. Gifts will generally not be opened in front of the giver.


Please also note:

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

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Tariffs and non-tariff barriers

Tariff

Malaysia adopts the Harmonized Commodity Description and Coding System of classification of goods. Malaysia is progressively liberalising its tariff regime, however, some products that are in competition with locally-manufactured products are still highly protected. Please contact our Austrade Kuala Lumpur office for tariff details.

 

Australia and Malaysia are negotiating a Free Trade Agreement (FTA). Four full rounds of bilateral FTA negotiations have been held since May 2005, the most recent in Kuala Lumpur in July 2006. Negotiations were then suspended in favour of pursuit of the recently concluded ASEAN-Australia-New Zealand FTA but are scheduled to recommence in early 2009. Both sides have committed to completing a comprehensive, high-quality agreement.

Malaysia has been active in the ASEAN Free Trade Area (AFTA) and Asia Pacific Economic Cooperation, placing high priority on early implementation of concessional tariffs on intra-ASEAN trade. 

Import permits are required for a range of products including meat, eggs, milk, wine, plants, cosmetics, pharmaceuticals, firearms, explosives and dangerous drugs and chemicals.


Foreign service providers have restricted market access in some key service sectors such as financial and some professional services such as law, accounting and architecture.

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Product certification, labelling and packaging

Packaging and labelling requirements vary depending on the products.  New food labelling laws to comply with international standards are to be implemented on 1st March 2004.

Special certificates

Live plants and plant material for propagation require a phytopathological certificate, issued by the approved authority in the country of origin. In Australia this is usually the Australian Quarantine and Inspection Service, Commonwealth Department of Agriculture, Fisheries and Forestry-Australia or the relevant state department of agriculture.

Inedible tallow requires a sterilisation certificate, issued by the approved authority in the country of origin.

Whisky or brandy requires a certificate of age stating that it has been stored in wood for at least three years.

Customs form - six copies of correctly completed Customs 'Form 1' with original signatures on all copies are required.

Certain goods require supplier's certificates.

Halal and health certificates are required for all meatbased products.

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Methods of quoting and payment

Quotes preferably in Ringgit Malaysia (RM), CIF. Payment usually by letter of credit. Established agencies may request D/A terms of 60-90 days.

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Documentary requirements

Pro-forma invoice

Not compulsory but may be requested in certain cases.

Commercial invoice

Two copies are required. The invoice, signed by the exporter or shipper, must indicate the following details:

  • number and descriptions of packages
  • marks and numbers of individual packages
  • detailed description of the goods
  • gross and net weights or quantity
  • FOB and CIF values
  • country of origin
  • place of shipment and destination of the goods

The certificate of origin must be completed for goods on which preference is claimed. The certificate's details must include:

  • a description of the goods
  • their total invoice value
  • a signature by the proprietor, a partner or principal official of the manufacturing or supplying firm (name of person signing and position in firm must be stated)

The following certification must be provided:

  • that the person signing has the means of knowing the statement in the certificate to be correct
  • that the person signing is duly authorised to issue the certificate on behalf of the manufacturer, producer or grower and, if appropriate, the supplier
  • that the goods are the produce or manufacture of the Commonwealth country named
  • if grown or produced, that the goods were grown or produced in and consigned from the named Commonwealth country or countries.

Insurance

Normal commercial practice.

Bill of lading

Minimum of two copies required. To Order bills are acceptable.

Packing list

Must be furnished if contents of shipment not itemised in invoice. Packing list also facilitates clearance through customs.

Public health requirements

Prior permits from the Malaysian Department of Agriculture are required for a range of items:

  • plants and parts for propagation, including seeds
  • soil for research purposes and growing media

Special requirements govern the importation of drugs, pharmaceuticals and chemical additives used in food.

All imported foodstuffs and drugs are subject to inspection.

Electric motors must be approved by the Chief Electrical Inspector.

Machinery must meet with safety requirements and be approved by the Chief Inspector of Machinery.

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Taxation

Malaysia and Australia have signed an Avoidance of Double Taxation agreement.


All income of companies and individuals accrued in, derived from or remitted to Malaysia are liable to tax. Exemptions are made to income remitted to Malaysia by resident companies (other than companies involved in banking, insurance, air and sea transportation), non-resident companies and non-resident individuals.


Tax rates applicable include:

  • company tax
  • personal tax
  • withholding tax
  • real property gains tax
  • sales tax
  • service tax
  • import duty
  • excise duty
  • double taxation

In addition, Malaysia offers a wide range of tax incentives.

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News Feeds


From The Star Online

Export Snapshot

'Malaysia: Turtle beach'
This 'postcard' by Austrade's Chief Economist, Tim Harcourt, features a short article and key statistics.

OECD Guidelines for Multinational Enterprises

Multinational Enterprises should be aware of the OECD Guidelines for Multinational Enterprises that provide voluntary principles and standards for responsible business behaviour in a variety of areas, consistent with applicable domestic laws. These Guidelines are endorsed and promoted by the Australian Government. For more information, go to the ANCP website.

     

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Austrade makes no warranty, express or implied as to the fitness for a particular purpose, or assumes any legal liability for the accuracy or usefulness of any information contained in this document. Any consequential loss or damage suffered as a result of reliance on this information is the sole responsibility of the user.