Generalizes on the best strategy to enter the market, e.g., visiting the country; importance of relationships to finding a good partner; use of agents.
Distributors and Agents
Most exporters to Malaysia find that using a local distributor or agent is the best first step for entering the market. A local distributor is typically responsible for handling customs clearance, dealing with established wholesalers/retailers, marketing the product directly to major corporations or the government, and handling after-sales service. Exporters of services generally also benefit from working with a local partner.
In sectors that are not government-dominated, companies, agents, or distributors should be selected based on competitive considerations such as technical grounds or product knowledge. Due to the relationship-orientated Malaysian market, having a local presence or agent can positively influence the outcome.
Malaysian Government Procurement
Sales to the Government of Malaysia (GOM), Government Linked Companies (GLC), or procurements in priority sectors favor local agents and/or joint venture partners classified as a Bumiputra company. The term Bumiputra refers to individuals who are native or ethnically Malay. A Bumiputra company is defined as a company that fulfills the following criteria, as established under the Companies Act 1965:
• Upfront capital of at least RM25,000
• Shareholders are 100 percent Bumiputra
• Board of Directors are at least 51 percent Bumiputra
• Managerial and professional staff are at least 51 percent Bumiputra
• Supporting staff are at least 51 percent Bumiputra.
The GOM and GLCs make use of offsets and other measures to encourage technology transfer, particularly in priority sector procurements. The GOM and GLCs also look favorably on U.S. companies with a long-term presence in the local market. Therefore, in strategic or large-scale market entry, U.S. companies typically find they are treated more favorably when they are willing to establish a local office, hire Malaysians, and provide training opportunities. Companies are also expected to undertake some local assembly or production or plan regular and frequent trips to maintain relationships and presence.
U.S. Government Support
U.S. Department of Agriculture
The U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) provides equivalent-level trade services at no cost for U.S. companies interested in exporting agricultural, fishery, and forestry products to Malaysia through their Office of Agricultural Affairs. The U.S. Trade and Development Agency helps companies create U.S. jobs through the export of U.S. goods and services for priority infrastructure projects in emerging economies.
U.S. Department of Commerce
The United States and Foreign Commercial Service (US&FCS) of the U.S. Department of Commerce (DOC) offers customized solutions to help U.S. companies, including small- and medium-sized enterprises, succeed in the Malaysian market. USFCS can assist U.S. companies in developing comprehensive market-entry or expansion plans, learn about export-and-customs-related requirements, obtain export financing, and identify potential partners, agents, and distributors through business matchmaking programs, trade shows, and trade missions led by senior U.S. government officials. For U.S. companies that purchase our Gold Key Service, USFCS can facilitate one-on-one meetings with pre-screened buyers, potential customers or end-users, experienced professional services providers, and key government officials. With these tools, explained in greater detail in this Country Commercial Guide (CCG), U.S. companies will be better positioned to take advantage of opportunities in the Malaysian market.