Malaysia - Country Commercial Guide
Trade Barriers

Includes the barriers (tariff and non-tariff) that U.S. companies face when exporting to this country.

Last published date: 2021-11-06

While Malaysia enjoys high ratings for ease of trading across borders, the country still poses barriers to its goal of becoming a free and open market. Malaysia’s import barriers are aimed at protecting the domestic market and strategic sectors, as well as maintaining cultural and religious norms.

Technical barriers, such as halal certification for the importation of meat and poultry, are regulated through licensing and sanitary controls. All imported beef, lamb, and poultry products must originate from facilities that have been approved by as halal or acceptable for consumption by Muslims.   

Pork and pork products may be imported into Malaysia only if Malaysia’s Department of Veterinary Services (DVS) issues a permit authorizing its importation. Each consignment of pork and pork products must have a valid import permit issued by the Malaysian Quarantine and Inspection Services(MAQIS). The permits are granted on a case-by-case basis and can be refused without explanation.

The first Malaysian halal food standard (MS1500:2000) was published in the year 2000 and revised four years later which was formally recognized as MS1500:2004. This new standard requires slaughtering plants to maintain dedicated halal facilities and ensure segregated transportation for halal and non-halal products. Malaysia also requires audits of all establishments that seek to export meat and poultry products to Malaysia, an issue about which the United States has raised concerns.

The Malaysian Department of Standards implemented MS2424:2012 General Guidelines on Halal Pharmaceuticals, a voluntary certification system. The guidelines enabled manufacturers of pharmaceutical products to apply for halal certification and established basic requirements for manufacturing and handling.  

Malaysia is not a party to the World Trade Organization (WTO) Agreement on Government Procurement (GPA). As a result, foreign companies do not have the same opportunity as some local companies to compete for contracts and in most cases are required to take on a local partner before their bids are considered. In domestic tenders, preferences go to Bumiputra suppliers over other domestic suppliers. In most procurement, foreign companies must take on a local partner before their tenders are considered. Procurement often goes through intermediaries rather than being conducted directly by the government.  The procurement can also be negotiated rather than tendered. International tenders generally are invited only where domestic goods and services are not available.

The total revenue of the services sector in  the first quarter of 2021 recorded RM428.5 billion, a decrease of -1.7 percent as compared to the fourth quarter 2020. The highest contribution was registered by Wholesale & Retail Trade, Food & Beverages and Accommodation segment (-RM4.6 billion; -1.3 percent). Meanwhile, the total revenue on annual comparison contracted by -2.1 percent, compared to -5.1 percent in the previous quarter. Since 2009, Malaysia has liberalized 27 services sub-sectors with no equity condition imposed. These sub-sectors center around health and social services, tourism services, transport services, business services, and computer and related services. The government has further liberalized an additional seven broad services sector. These sectors consist of 18 sub-sectors in 2012 to allow 100 percent foreign equity participation in telecommunications, healthcare, professional services, environmental services, distributive trade services, education services, and courier services. For more information on the services sector in Malaysia, please visit the Malaysian Investment Development Authority (MIDA).

Malaysia has an export licensing system. In some sectors, Malaysia maintains tax programs that appear to provide subsidies for exports. In other cases, the goal is to restrict exports of specific commodities. For products such as textiles, export licenses ensure compliance with bilateral export restraint agreements. For other products, such as rubber, timber, palm oil, and tin exports, special permission from government agencies is required and taxes are assessed on these exports to encourage domestic processing.

For more information and help with trade barriers, please contact: International Trade Administration:

Trade Enforcement

https://www.commerce.gov/issues/trade-enforcement

Report a Trade Barrier:

https://www.trade.gov/resolve-foreign-trade-barrier