WT/TPR/S/436 /Rev.1  
 
16 June 2023 
(23-4085) Page: 1/147 
Trade Policy Review Body   
 
  
TRADE POLICY REVIEW  
REPORT BY THE SECRETARIAT  
MALAYSIA  
Revision  
This report, prepared for the eight Trade Policy Review of Malaysia, has been drawn up by the WTO 
Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing 
the Trade Policy Review Mechanism (Annex  3 of the Marrakesh Agreement Establishing the 
World  Trade Organization), sought clarification from Malaysia on its trade policies and practices.  
 
Any technical questions arisin g from this report may be addressed to Cato Adrian, Sergios  Stamnas, 
and Takako  Ikezuki (tel. +41 22 739 5534).  
 
Document WT/TPR/G/436 contains the policy statement submitted by Malaysia.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report was drafted in English.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  7 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  12 
1.1   Main Features of the Economy  ................................ ................................ ....................  12 
1.2   Recent Economic Developments ................................ ................................ ..................  15 
1.2.1   Growth, income, and employment  ................................ ................................ ............  15 
1.2.2   Prices  ................................ ................................ ................................ ...................  17 
1.2.3   Main macroeconomic policy developments  ................................ ................................ . 18 
1.2.3.1    Monetary and exchange rate policy  ................................ ................................ ........  18 
1.2.3.2    Fiscal policy ................................ ................................ ................................ ........  19 
1.2.4   Structural policies  ................................ ................................ ................................ .. 19 
1.2.4.1    Tax reform  ................................ ................................ ................................ .........  19 
1.2.4.2    Privatization  ................................ ................................ ................................ ....... 20 
1.2.4.3    Competition policy  ................................ ................................ ..............................  20 
1.2.4.4    Corporate governance  ................................ ................................ .........................  21 
1.2.4.5    Labour market policies  ................................ ................................ .........................  21 
1.2.5   Balance of payments  ................................ ................................ ..............................  22 
1.3   Developments in Trade and Investment  ................................ ................................ ....... 24 
1.3.1   Trends and patterns in merchandise and servi ces trade  ................................ ...............  24 
1.3.2   Trends and patterns in FDI  ................................ ................................ ......................  27 
2   TRADE AND INVESTMENT REGIMES  ................................ ................................ ...........  30 
2.1   General Framework  ................................ ................................ ................................ .. 30 
2.2   Trade Policy Formulation and Objectives  ................................ ................................ ...... 31 
2.3   Trade Agreements and Arrangements  ................................ ................................ ..........  32 
2.3.1   WTO ................................ ................................ ................................ ....................  32 
2.3.2   Regional  and preferential agreements  ................................ ................................ ....... 32 
2.3.2.1    Association of Southeast Asian Nations (ASEAN)  ................................ ......................  32 
2.3.2.2    Bilateral FTAs  ................................ ................................ ................................ ..... 35 
2.3.3   Other agreements and arrangements  ................................ ................................ ........  35 
2.3.3.1    Regional Comprehensive Economic Partnership (RCEP) Agreement  .............................  35 
2.3.3.2    Comprehensive and Progressive Agreement for Trans -Pacific Partnership (CPTPP)  ........  36 
2.3.3.3    Indo-Pacific Economic Framework (IPEF)  ................................ ................................  36 
2.3.3.4    Other arrangements  ................................ ................................ ............................  37 
2.4   Investment Regime  ................................ ................................ ................................ .. 37 
3   TRADE POLICIES AND PRACTICES BY MEASURE  ................................ ........................  40 
3.1   Measures Directly Affecting Imports  ................................ ................................ ............  40 
3.1.1   Customs procedures, valuation, and requirements  ................................ ......................  40 
3.1.1.1    Customs valuation  ................................ ................................ ...............................  43 
3.1.2   Rules of origin  ................................ ................................ ................................ ....... 43 
3.1.3   Tariffs  ................................ ................................ ................................ ..................  43 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  3.1.3.1    Bound rates  ................................ ................................ ................................ ....... 43 
3.1.3.2    Applied MFN rates  ................................ ................................ ...............................  44 
3.1.3.3    Tariff rate quotas (TRQs)  ................................ ................................ ......................  46 
3.1.3.4    Tariff exemptions and reductions  ................................ ................................ ...........  46 
3.1.3.5    Tariff preferences  ................................ ................................ ................................  46 
3.1.4   Other charges affecting imports  ................................ ................................ ...............  47 
3.1.5   Import prohibitions, restrictions, and licensing  ................................ ...........................  49 
3.1.6   Anti-dumping, countervailing, and safeguard measures  ................................ ...............  53 
3.2   Measures Directly Affecting Expo rts ................................ ................................ .............  54 
3.2.1   Customs procedures and requirements  ................................ ................................ ..... 54 
3.2.2   Taxes, charges, and levies  ................................ ................................ ......................  55 
3.2.3   Export prohibitions, restrictions, and licensing  ................................ ............................  55 
3.2.4   Export support and promotion  ................................ ................................ .................  56 
3.2.5   Export finance, insurance, and guarantees  ................................ ................................  57 
3.3   Measures Affecting Production and Trade  ................................ ................................ ..... 58 
3.3.1   Incentives  ................................ ................................ ................................ ............  58 
3.3.2   Standards and other technical requirements  ................................ ..............................  61 
3.3.3   Sanitary and phytosanitary requirements  ................................ ................................ .. 63 
3.3.4   Competition policy and price controls  ................................ ................................ ........  64 
3.3.4.1    Competition policy  ................................ ................................ ..............................  64 
3.3.4.2    Consumer protection and price controls  ................................ ................................ .. 65 
3.3.5   State trading, state -owned enterprises, and privatization  ................................ .............  65 
3.3.6   Government procurement  ................................ ................................ .......................  66 
3.3.7   Intellectual property rights  ................................ ................................ ......................  68 
4   TRADE POLICIES BY SECTOR  ................................ ................................ .....................  74 
4.1   Agriculture, Forestry, and Fisheries  ................................ ................................ .............  74 
4.1.1   Agriculture  ................................ ................................ ................................ ............  74 
4.1.1.1    Overview  ................................ ................................ ................................ ...........  74 
4.1.1.2    Agricultural policies  ................................ ................................ .............................  75 
4.1.1.3    Domestic support  ................................ ................................ ................................  76 
4.1.1.4    Border measures ................................ ................................ ................................ . 78 
4.1.1.5    Export measures  ................................ ................................ ................................ . 79 
4.1.1.6    Selected commodities  ................................ ................................ ..........................  79 
4.1.1.6.1    Palm oil  ................................ ................................ ................................ ..........  79 
4.1.1.6.2    Rubber  ................................ ................................ ................................ ...........  81 
4.1.1.6.3    Rice ................................ ................................ ................................ ...............  83 
4.1.1.6.4    Livestock  ................................ ................................ ................................ ........  85 
4.1.2   Fisheries  ................................ ................................ ................................ ...............  86 
4.1.2.1    Policy  ................................ ................................ ................................ ................  87 
4.1.2.2    Border measures ................................ ................................ ................................ . 89 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.2   Mining and Energy  ................................ ................................ ................................ .... 89 
4.2.1   Mining and quarrying  ................................ ................................ ..............................  89 
4.2.2   Energy  ................................ ................................ ................................ .................  91 
4.2.2.1    General  ................................ ................................ ................................ .............  91 
4.2.2.2    Petroleum and natural gas  ................................ ................................ ....................  93 
4.2.2.3    Electricity  ................................ ................................ ................................ ...........  95 
4.3   Manufacturing  ................................ ................................ ................................ ..........  97 
4.3.1   General  ................................ ................................ ................................ ................  97 
4.3.2   Motor vehicles  ................................ ................................ ................................ ....... 98 
4.4   Services  ................................ ................................ ................................ ..................  99 
4.4.1   General  ................................ ................................ ................................ ................  99 
4.4.2   Financial services  ................................ ................................ ................................ . 101 
4.4.2.1    General  ................................ ................................ ................................ ...........  101 
4.4.2.2    Banking  ................................ ................................ ................................ ...........  102 
4.4.2.3    Insurance and takaful  ................................ ................................ ........................  107 
4.4.2.4    Securities  ................................ ................................ ................................ ........  108 
4.4.3   Telecommunications  ................................ ................................ .............................  110 
4.4.4   Transport  ................................ ................................ ................................ ...........  115 
4.4.4.1    Air transport  ................................ ................................ ................................ ..... 115 
4.4.4.2    Maritime transport  ................................ ................................ ............................  117 
4.4.4.2.1    General  ................................ ................................ ................................ .........  117 
4.4.4.2.2    Shipping  ................................ ................................ ................................ ....... 117 
4.4.4.2.3    Ports ................................ ................................ ................................ ............  119 
4.4.5   Tourism  ................................ ................................ ................................ ..............  120 
5   APPENDIX TABLES  ................................ ................................ ................................ .. 126  
 
CHARTS  
Chart 1.1 Product composition of merchandise trade by main HS section,  
2017 and 2021  ................................ ................................ ................................ ................  25 
Chart 1.2 Direction of merchandise trade, 2017 and 2021  ................................ ......................  26 
Chart 3.1 Tariff distribution by type and rate of duty, 2022  ................................ ....................  44 
Chart 3.2 Average applied MFN tariff r ates, by HS section, 2017 and 2022  ...............................  45 
Chart 4.1 Structure of the agriculture sector  ................................ ................................ ........  74 
Chart 4.2 Domestic support in Malaysia, 2012 -15 ................................ ................................ . 77 
Chart 4.3 PETRONAS' contribution to government and state revenues, 2016 -21 ........................  94 
Chart 4.4 Electricity generation mix, 1990 -2019 ................................ ................................ ... 95 
Chart 4.5 FTSE Bursa Malaysia ma rket capitalization  
and KLCI, January  2018-September  2022 ................................ ................................ .........  109 
Chart 4.6 Tourism sector's performance, 2015 -21 ................................ ..............................  120 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  TABLES  
Table 1.1 Selected macroeconomic indicators, 2017 -21 ................................ .........................  13 
Table 1.2 Basic economic and social indicators, 2017 -21 ................................ .......................  16 
Table 1.3 Balance of payments, 2017 -21 ................................ ................................ .............  23 
Table 1.4 Trade in services, 2017 -21 ................................ ................................ ..................  27 
Table 1.5 Stock of foreign direct investment in Malaysia, 2017 -21 ................................ ...........  27 
Table 1.6 Stock of direct investment abroad outward foreign direct  
investment, 2017 -21 ................................ ................................ ................................ ........  28 
Table  2.1 Malaysia's regional (ASEAN) and bilateral FTAs, 2022  ................................ ..............  34 
Table 3.1 Main amendments to the Customs Act, 2017 -22 ................................ .....................  40 
Table 3.2 Malaysia's tariff structure,  2017 and 2022  ................................ .............................  45 
Table 3.3 Preferential tariff regime, 2022  ................................ ................................ ............  47 
Table 3.4 Structure of direct and indirect tax revenue, 2018 -2021 ................................ ..........  48 
Table 3.5 Structure of the Customs (Prohibition of Imports) Order 2017  ................................ .. 50 
Table 3.6 Import p rohibitions ................................ ................................ .............................  51 
Table 3.7 Products covered the Customs (Prohibition of Imports) Order 2017,  
Third Schedule  ................................ ................................ ................................ ................  52 
Table 3.8 Anti -dumping measures in force, 30  June 2022 ................................ ......................  53 
Table 3.9 Export duties, 2022  ................................ ................................ ............................  55 
Table 3.10 More favourable tax incentives – manufacturing ................................ ....................  59 
Table 3.11 Bank Negara Malaysia Fund for SMEs, COVID -19 relief  ................................ ...........  61 
Table 3.12 Complaints, investigations, and findings, 2016 -19 ................................ .................  65 
Table 3.13 Government procurement value by public sector, 2019 -21 ................................ ..... 68 
Table 3.14 WIPO -administered  treaties  ................................ ................................ ...............  68 
Table 3.15 Overview of IPR protection provided by Malaysia's legislation, 2022  .........................  69 
Table 3.16 Intellectual property statistics, 2017 -20 ................................ ...............................  71 
Table 4.1 Budgeted expenditures on agricultural programmes, 2022  ................................ ....... 76 
Table 4.2 Financing scheme operated by Agrobank, 2017 -21 ................................ .................  78 
Table 4.3 Selected indicators for oil palm, 2016 -21 ................................ ...............................  79 
Table 4.4 Export duties for CPO  ................................ ................................ .........................  81 
Table 4.5 Selected indicators for rubber, 2015 -21 ................................ ................................ . 82 
Table 4.6 Selected indicators for rice (paddy), 2015 -21 ................................ .........................  84 
Table 4.7 Government expenditures on rice and pa ddy subsidies, 2017 -20 ...............................  85 
Table 4.8 Livestock indicators, 2015 -21 ................................ ................................ ..............  85 
Table 4.9 Marine and i nland capture fishing and aquaculture, 2015 -20 ................................ .... 86 
Table 4.10 Fishing zones in Malaysia  ................................ ................................ ...................  87 
Table 4.11 Government spending on fisheries, 2017 -21 ................................ .........................  89 
Table 4.12 Mining and quarrying production, 2017 -21 ................................ ...........................  90 
Table 4.13 Mineral licences issued, 2017 -21 ................................ ................................ ........  91 
Table 4.14 Primary energy supply and consumption, 2015 -19 ................................ ................  92 
Table 4.15 Oil and gas production and use, 2014 -20 ................................ .............................  93 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 4.16 Regulated prices for natural gas in  Malaysia, January 2014 -December 2019  ..............  96 
Table 4.17 Services contribution to GDP, 2017 -21 ................................ ..............................  100 
Table 4.18 Financial sector indicators, 2016 -21 ................................ ................................ .. 104 
Table 4.19 Islamic banking system, 2018 -21 ................................ ................................ ..... 104 
Table 4.20 Takaful sector, 201 8-21 ................................ ................................ ..................  107 
Table 4.21 Selected telecommunications indicators, 2017 -21 ................................ ...............  110 
Table 4.22 Goals of the Malaysia Digital Economy Blueprint  ................................ .................  112 
Table 4.23 Telecommunications licensing regimes, 2022  ................................ ......................  113 
Table 4.24 Telecommunications licences issued, 2017 -21 ................................ ....................  114 
Table 4.25 Air transport, selected indicator s, 2017 -21 ................................ .........................  116 
Table 4.26 Total vessels registered in Malaysia by type and weight, 2017 -21 ..........................  118 
Table 4.27 Total vessels registered in the Malaysian International Ship Registry  
by type, 2015 -21 ................................ ................................ ................................ ...........  118 
Table 4.28 Main ports and activities, 2017 -21 ................................ ................................ .... 119 
Table 4.29 Foreign equity limits in tourism sector  ................................ ...............................  122 
Table 4.30 Fiscal incentives for tourism projects,  2022 ................................ ........................  123 
 
BOXES  
Box 1.1 Malaysia's response to the COVID -19 challenge  ................................ ........................  14 
Box 4.1 Islamic banking and finance  ................................ ................................ .................  105 
 
APPENDIX TABLES  
Table A1. 1 Merchandise exports by HS section and major HS  chapter/subheading, 
2017-21 ................................ ................................ ................................ .......................  126 
Table A1. 2 Merchandise imports by HS section and major HS chapter/subheading, 
2017-21 ................................ ................................ ................................ .......................  127 
Table A1. 3 Mercha ndise exports by destination, 2017 -21 ................................ ....................  128 
Table A1. 4 Merchandise imports by origin, 2017 -21 ................................ ...........................  129 
Table  A2. 1 WTO notifications, 27  November  2017 to 31  August  2022 ................................ ... 130 
Table A3. 1 Malaysia's MFN tariff summary, 2022  ................................ ...............................  132 
Table A3. 2 Excise duties  ................................ ................................ ................................  133 
Table A3. 3 Import prohibitions and licensing (Second Schedule)  ................................ ..........  137 
Table A3. 4 Export licensing  ................................ ................................ ............................  140 
Table A3. 5 Imports subject to TBT requirements  ................................ ...............................  141 
Table  A4. 1 Malaysia's major traded agricultural products, 2017 -21 ................................ ...... 144 
Table A4. 2 Malaysia's major traded fish and fish products, 2017 -21 ................................ ..... 146 
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  SUMMARY  
1. With a GDP per  capita of USD  11,422 in 2021, Malaysia is a middle -income country, aspiring 
to become a high -income country between 2024 and 2028. The Twelfth Malaysia Plan, 2021 -2025 
(Twelfth Plan) is considered transformational and designed to inject fundamental reforms to alter 
the development trajectory of Malaysia. The Twel fth Plan is organized around three key themes 
(resetting the economy; strengthening security, well-being , and inclusivity; and advancing 
sustainability), four catalytic policy enablers (developing talent, accelerating innovation and 
technology adoption, en hancing connectivity and transport infrastructure, and improving public 
service), and 14 "game changers".  
2. Real GDP expanded by 5.8% in 2017, and although the growth rate declined subsequently, it 
remained above 4% in 2018 and 2019. The COVID -19 pandemic pr ompted a 5.5% contraction in 
real GDP in 2020, but growth resumed in 2021. The authorities introduced strict movement control 
orders to contain the spread of the pandemic and dealt with the economic fallout by introducing 
sizeable fiscal stimulus packages,  including tax relief, cash transfer programmes, and wage 
subsidies, and monetary policy was eased. The strong fiscal response widened the Government's 
budget deficit and increased the level of debt, and the debt ceiling was raised twice by a total of 
10 percentage point s. Federal government debt equalled 63.4% of GDP at the end of 2021 , up from 
52.4% of GDP two years earlier. Although most of this debt remains domestically financed, 
Malaysia's external debt has also increased since 2019.  
3. Monetary policy is  geared towards maintaining price stability, but the central bank (Bank 
Negara Malaysia) does not set a specific inflation target. Inflation remained subdued in 2018 and 
2019, and Malaysia experienced deflation in 2020. However, in line with global trends,  inflationary 
pressures have re -emerged in 2021 and 2022. Although mitigated by job -retention schemes, the 
unemployment rate jumped from just over 3% before the pandemic to 4.5% in 2020 and 4.6% 
in 2021, but the labour market has subsequently improved.  
4. Malaysia's current account remains in surplus due to significant net exports of goods. The 
surplus peaked in 2020 (at 4.2% of GDP) even with a widening of the deficit in services trade. Gross 
official reserves stood at USD  108.2  billion  at end -August2022, equ ivalent to 5.4  months of imports 
of goods and services, and 1.1  times the total short -term external debt.  
5. International trade and foreign direct investment (FDI) trends reflect the continued 
importance of Asia as Malaysia's main regional market and origin of FDI. The Asian region account s 
for more than 70% of Malaysia's merchandise trade. China, Singapore, the EU -27, and the 
United  States continue to be Malaysia's main individual trading partners, while, as a group, the other 
member States of the Associatio n of Southeast Asian Nations (ASEAN) represented one quarter of 
Malaysia's merchandise trade in 2021, slightly less than in 2017. Taken together, Singapore; 
Hong Kong,  China; Japan; the United  States ; and the Netherlands account for just over 60% of the 
FDI stock in Malaysia. About one fifth of Malaysia's direct investment abroad goes to Singapore, 
followed by Indonesia and the United  Kingdom . 
6. The trade policy framework has remain ed stable  during the period under review . The Ministry 
of International Trade and Industry (MITI) is the lead agency for international trade, including 
strategic trade, as well as matters pertaining to investment, productivity, development finance, and 
small and medium -sized enterprises  (SMEs) , in general, and the specific developme nt of the halal, 
automotive , and steel subsectors.  
7. Malaysia is an active Member of the WTO. It has not been involved in WTO dispute settlement 
cases as a respondent since 2018, while a dispute panel was established in July  2021, at Malaysia's 
request, to e xamine EU measures affecting palm oil and oil -palm crop -based biofuels. Malaysia has 
reserved its third -party rights in 17 recent cases. Although Malaysia provides notifications on many 
subjects covered by the WTO framework, their scope and timeliness coul d be improved. For example, 
the most recent notifications of domestic support to agriculture provide information until 2015.  
8. Malaysia's regional integration efforts are anchored in ASEAN. The member States established 
the ASEAN Economic Community (AEC) in 2003, and the AEC Blueprint 2025 provides a framework 
for ongoing strategic measures. Trade facilitation is embedded in the Blueprint, and the ASEAN Trade 
in Goods Agreement (ATIGA) was amended in 2019 to simplify rules of origin requirements through WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  self-certification by the operators. Negotiations to upgrade ATIGA may include new elements such 
as digital trade. The ASEAN Trade in Services Agreement, in force since April  2021, has become the 
new legal instrument for further integration of services sectors,  and the ASEAN Comprehensive 
Investment Agreement aims at the creation of a free and open investment environment through 
progressive liberalization. The ASEAN Agreement on Electronic Commerce, in force since 
December  2021, is intended to facilitate e -comme rce transactions within ASEAN.  
9. ASEAN member States have pursued trade liberalization with partners in the region through 
a network of FTAs. The most recent FTA, with Hong  Kong,  China, was signed in March  2018. Malaysia 
has also concluded bilateral FTAs that are either stand -alone FTAs (Chile, Pakistan, and Türkiye) or 
complement the ASEAN FTAs with the same partners (Australia, New  Zealand , India, and Japan). 
No new bilateral FTAs have been concluded since 2018.  
10. The Regional Comprehensive Economic Partne rship (RCEP) Agreement broaden s and deepen s 
the engagement between ASEAN member States and five of its FTA partners. The RCEP entered into 
force for most of the participants on 1  January  2022. Malaysia was among the 11  countries that 
signed the Comprehensi ve and Progressive Agreement for Trans -Pacific Partnership (CPTPP) in 2018, 
and as Malaysia became the ninth signatory to ratify the CPTPP, it took effect for Malaysia on 
29 November  2022.  
11. Regarding the business environment, e ntrepreneurs are required to register with the 
Companies Commission of Malaysia for starting a business, but other federal and state agencies are 
also involved in the process of issuing licences, tax registration, and social security arrangements. 
The MalaysiaBiz Portal was launched in  2020 as a one -stop centre for business registration and 
licensing. The Malaysian Investment Development Authority is the principal agency overseeing and 
driving investment into manufacturing and selected industries in the services sector. The National 
Investment Aspirations, approved by the Cabinet in April  2021, provides a programme for 
comprehensive reform of the investment agenda to attract high -quality investments creating 
high-income jobs.  
12. Limitations on foreign investment, to the extent that these pe rsist, are sector -specific and 
upheld by the supervisory authorities for the sectors in question. Some regulatory agencies may 
have absolute discretion in rejecting or approving transactions. Restrictions on foreign ownership 
remain in education, communica tion and multimedia, freight forwarding and shipping, financial 
services, and oil and gas.  
13. Customs procedures have largely remain ed unchanged since the last Review, although the 
Customs Act  1967 has been amended, primarily in respect of provisions that aff ect customs rulings, 
duty payments and refunds, duty drawback, enhanced powers of customs officers, the regulation of 
transit and transhipment, penalties for customs offences related to non -compliance, and origin of 
goods. Malaysia ratified the WTO  Agreeme nt on Trade Facilitation (TFA) on 26  May 2015 and has 
implemented all categories under the TFA since 1  June 2021. Moreover, at the regional level, 
Malaysia has been participating actively in several initiatives to facilitate trade between ASEAN 
member Stat es. These initiatives include the ASEAN Single Window (ASW), the ASEAN -wide 
Self-Certification Scheme (AWSC), the ASEAN Customs Transit System, and the ASEAN Customs 
Declaration Document (ACDD). Notably, the ASW currently supports the exchange of intra -ASEAN 
certificates of origin for preferential tariff treatment and the ACDD , which  is an electronic document 
for the exchange of export declaration information between ASEAN member  States. The AWSC 
allows for certified exporters to self -declare the country of  origin for their goods in certain commercial 
documents for ATIGA tariff preferential claims, instead of applying for a Certificate of Origin.  
14. Overall, the tariff structure remains unchanged. About 99% of all tariff lines carry ad valorem  
rates. Non -ad valorem duties mainly affect agricultural products such as edible fruit, alcoholic 
beverages, and tobacco. Malaysia's applied rates (excluding AVEs) decreased slightly from 2017 to 
2022, mainly due to tariff cuts on products covered by the expansion of the In formation Technology 
Agreement. However, the inclusion of AVEs in the 2022 tariff analysis raises the simple average 
applied MFN rate from 7.1% to 7.6%, mainly due to high AVEs on certain alcoholic beverages and 
tobacco. Malaysia continues to apply TRQs (a bout 0.2% of total tariff lines), for the most part 
covering live swine and poultry, poultry meat, liquid milk and cream, eggs, and round cabbage. 
Almost all applied MFN rates are lower than their bound rates. In the case of 11 tariff lines, where 
applied rates appear to be exceeding their bound levels, the authorities acknowledged that these 
were due to transposition errors that should be corrected.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  15. Malaysia applies Sales and Service Tax (SST) and excise duties on selected products, having 
reverted to the SST instead of a Goods and Services Tax (introduced on 1  April 2015) since 
1 September2018. SST rates are generally 5% or 10% on goods , while the service tax rate is 6%. 
Certain petroleum products are subject to specific rates. Excise duty is charged on ce rtain goods 
considered non -essential or harmful to health or the environment, including sugar -sweetened 
beverages, motor vehicles, liquor, cigarettes and tobacco, playing cards, and mahjong tiles. The 
shares of the SST (about 15%) and excise duties (5%) in  total government tax revenue were far 
higher than the contributions from import duties (1.5%) in 2021.  
16. There has been no major change to regulations concerning import and export prohibitions, 
restrictions, and licensing since the previous Review, although  there have been several amendments 
to the list of items for import/export licensing requirements. Malaysia had 25  anti-dumping measures 
in force on 30  June 2022, mainly duties affecting iron and steel products. In 2020, Malaysia notified 
to the WTO Commit tee on Safeguards that it had initiated a safeguard investigation on imports of 
ceramic floor and wall tiles. However, the investigation was terminated on 11  January  2021 as no 
causal link had been found between the increase in imports and any serious inju ry to the domestic 
industry.  
17. Malaysia levie s export taxes on 123  tariff line items (at the 10 -digit level). Most duties are 
ad valorem  rates ranging from 5% to 20%. Exports of crude palm oil were fully exempted from 
export duty from 1  July 2020 to 31  December  2020 to alleviate the impact of the COVID -19 
pandemic.  
18. Exporters are accorded reductions in their statutory income tax depending o n the value of 
increased exports, and successful exporters may qualify for Export Excellence Awards. Regarding 
investment promotion, "Pioneer Status" and the "Investment Tax Allowance" are the principal tax 
incentive schemes utilized to encourage investmen t. Eligibility is determined according to priorities 
such as the level of value added, choice of technology, and industrial linkages. Enhanced incentives 
are available to enterprises engaging in specific projects or activities, e.g. manufacturing in select ed 
mechanical and electrical industries or high -technology projects. Manufacturing businesses may also 
qualify for the Automation Capital Allowance or the Reinvestment Allowance. Matching grants may 
be available for technology upgrading, automation , and ot her investments that make production 
processes more competitive under facilities such as the Domestic Investment Strategic Fund, the 
Industry 4WRD Readiness Assessment, and Smart Automation Grants. To sustain business 
operations during the COVID -19 pandemi c, Bank Negara Malaysia administered various financing 
facilities (credits and guarantees) with  an emphasis on SMEs, including microenterprises.  
19. The Department of Standards Malaysia  (JSM) is Malaysia's national standardization and 
accreditation body. Malay sian standards are in principle voluntary unless they have been made 
mandatory by the relevant domestic regulators. As the standards development policy has evolved 
from a numbers -based to a needs -based model, there has been a downward trend in the overall 
number of Malaysian standards. Obsolete standards have been withdrawn and direct use of 
international standards is promoted.  Malaysia submitted 38  TBT notifications and 13  SPS 
notifications to the WTO during the period under review.  
20. Competition policy is based on the Competition Act 2010 and the Competition Commission 
Act 2010. The Competition Act does not apply to certain sectors (aviation, telecommunications, and 
energy) as these are regulated under other laws or certain acts, e.g. those involving the ex ercise of 
governmental authority. Work is underway to introduce a merger control regime expected to come 
into force in 2023. Wheat flour and cooking oil are subsidized and subject to ceiling prices. Some 
goods are subject to price control pursuant to the P rice Control and Anti -Profiteering Act, and the 
Act's Regulations were revised in 2018 to broaden the scope to any goods or services sold. The 
Regulations provide a specific formula to determine unreasonably high margins.  
21. Malaysia has a large number of government -linked companies (GLCs) owned through seven 
government -linked investment companies. GLCs are present in utilities, banking and finance , and 
telecommunications, and partly state -owned GLCs are estimated to make up about 25% of the 
market capitali zation of the Bursa Malaysia. Malaysia has notifie d Padiberas Nasional Berhad 
(BERNAS) as a state trading enterprise for rice importation.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  22. The government procurement system is decentralized except for certain common user items. 
All individuals and enterpri ses intending to do business with the Government must register with the 
relevant authorities, i.e. the Ministry of Finance for goods and services and the Construction Industry 
Development Board for works. Since 2010, Integrity Pacts (commitments between th e procuring 
authorities and the bidders to respect the integrity of the procurement process) have been in place 
at federal and state levels. While direct purchase may be used for low -value procurement, all 
procurement valued at MYR  500,000 or more is subje ct to tendering.  Malaysia has been an observer 
to the WTO Committee on Government Procurement since 2012.  
23. In the area of intellectual property, Malaysia acceded during the review period to the Madrid 
Protocol, the Marrakesh VIP Treaty, and the Budapest Tre aty. A new Trademark Act and trademark 
regulations were promulgated in 2019, inter alia, for compatibility with accession to the Madrid 
Protocol ; to extend the scope of protection to non -traditional marks, collective marks , and 
certification marks ; and to provide stringent penalties for infringements. The Patents Act was 
amended in 2022, notably to include provisions regarding accession to the Budapest Treaty and to 
adopt Article  31bis of the TRIPS  Agreement . Accession to the Marrakesh Treaty was addressed in 
amendments to the Copyright Act, which also covered offences relating to streaming technology and 
ex officio  authority to search and seize relating to importation of infringing goods. The Geographical 
Indications Act 2022 and its regulations provide higher standards of protection for registered 
geographical indications.  
24. Malaysia is a net exporter of agricultural  commodities and a major global producer of crops 
such as palm oil, natural rubber, pepper, and coconuts. Palm oil remains the most important 
agricultural commodity. Over 70% of the oil palm area is owned by plantation estates that are 
vertically integrate d enterprises with international operations. Although the pandemic reduced the 
production and export volume of palm oil and related products during 2020 -21, the exported value 
reached a record MYR  108.5  billion  due to higher prices. Rubber remains importan t for employment, 
export revenues, and downstream diversification in rubber products. Malaysia is a net exporter of 
rubber and rubber products. In 2020, strong exports of rubber products were led by rubber gloves, 
mainly owing to high global demand in the medical and health sectors. Rice accounts for a relatively 
small share of GDP, but the Government continues to support the sector through minimum prices, 
fertilizer subsidies, direct payment to producers, and paddy production incentives. In addition to 
import duties, some agricultural products are subject to tariff rate quotas, surcharges, import and 
export licensing requirements, and export taxes.  
25. Growth in mining and quarrying has been sluggish since 2016. The sector is primarily 
regulated under the Miner al Development Act, which lays out federal powers, and so -called Mineral 
Enactments adopted by the states. The National Mineral Industry Transformation Plan 2021 -2030 
seeks to raise the sector's contribution to the economy, reduce trade imbalances, and dev elop the 
entire value chain of the domestic mineral industry. Malaysia is a significant producer of oil and gas, 
and fossil fuels continue to dominate the energy mix. The sector accounts for 20% of GDP, and the 
state-owned Petroleum Nasional Berhad (PETRON AS) is a major player in Malaysia and other 
countries around the world. Domestic demand for electricity rose almost three -fold from 2000 
to 2019.  The Peninsular Malaysia Generation Development Plan (2020 -2039) targets a significantly 
higher share of renewa bles in the domestic energy supply, largely to be met with major expansion 
of solar power. Investments are primarily to be sourced through private funds and public -private 
partnerships. The National Energy Policy 2022 -2040 also targets significant electric ity savings from 
a range of energy efficiency measures.  
26. The manufacturing sector has been a key driver in Malaysia's development and economic 
transformation. The sector accounted for 23.5% of GDP in 2021 and employed about 17% of the 
workforce. Nearly all companies in the sector are SMEs focused on the domestic market, but many 
of them are thought to have significant export potential. Recognizing the need for the sector to 
strengthen its competitiveness, resilience, and capacity, government policy is direct ed towards 
accelerated technology adaptation and enhanced incentives to encourage investments in high 
value -added industries. The Industry 4WRD: National Policy on Industry 4.0 summarizes the 
Fourth  Industrial Revolution as the application of advanced digi tization, advanced manufacturing 
technologies, and efficient resource allocation to infuse higher value -added manufacturing 
processes. Focus sectors under Industry 4.0 include electrical and electronics, machinery and 
equipment, chemicals, medical devices,  and aerospace. A number of technology development 
projects are being launched under the National Automotive Policy 2020, and various funding WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  schemes support the implementation of the policy. The propagation of electric vehicles to reduce 
carbon emissions is supported with tax incentives for vehicle owners as well as manufacturers.  
27. The pandemic affected services unevenly, as transportation, in particular air transport, 
accommodation, food and beverages, administrative and support services, and real estate w ere hard 
hit. Other key sectors such as telecommunications, finance, and insurance continued to grow on a 
robust path. Services (excluding construction, electricity, gas , and water) contributed 51.6% to GDP 
in 2021.  
28. The Financial Sector Blueprint 2022 -2026 follows five basic thrusts: the funding of Malaysia's 
transformation to a high -income country; improved financial inclusion; infrastructure and regulatory 
practices dedicated to better digital services while man aging cybersecurity risks; climate risks to be 
integrated into the supervisory and prudential regulatory roles of the central bank to facilitate orderly 
transition to a greener economy; and Malaysia as a gateway for Islamic finance. Although assets 
maintained in conventional banking and insurance st ill outweigh Islamic finance, the Islamic banking 
and takaful sectors continue to grow at a faster pace. Malaysia's Islamic capital market functions in 
parallel with the conventional capital market. Malaysia has one of the most developed capital 
markets in  the region and is one of the world's largest sukuk issuers  (Islamic financial certificates) . 
Overall, the size of Malaysia's capital market was approximately MYR  3.5 trillion  at the end of 
September  2022.  
29. During the review period, Malaysia enhanced its te lecommunications infrastructure through 
several projects in line with national development plans such as the Shared Prosperity Vision  2030,  
the Malaysia Digital Economy Blueprint,  and the  Twelfth  Plan. The Digital Nasional Berhad (DNB), 
established by the Government in 2021, is responsible for the development of 5G  infrastructure 
nationwide and the management of Malaysia's 5G  spectrum, with the aim of achieving 36% and 
80% coverage in populated areas by the end of 2022 and 2024 , respectively . Restrictions o n foreign 
equity participation remain in the telecommunications sector.  
30. Tourism plays an important role in the economy, including as a major earner of foreign 
exchange. In 2019, travel service s generated MYR  82.1 billion, equivalent to  48.3% of total services 
exports. However, the Government's movement control orders provoked by the outbreak of 
COVID -19 led to a sharp drop in international visitors in 2020 and 2021. The Visit Malaysia 2020 
camp aign was cancelled. The Government introduced various measures to alleviate the adverse 
impact of the COVID -19 pandemic on the tourism sector. These measures included a wage subsidy 
programme, exemption from the tourism tax, income tax relief for domestic tourism expenses, and 
financial assistance for Malaysian SMEs and micro enterprises. Foreign equity participation is 
restricted in certain tourism activities.WT/TPR/S/436 /Rev.1  • Malaysia  
 
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1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
1.1.  Malaysia with a population of 32.7 million (2021) remains an upper middle -income country 
expected to become a high -income economy between  2024 and 2028, and one of the most open 
economies in the world with reportedly about 40%  of jobs linked to export activities . According to 
IMF estim ates in early 2022 , it was the 8th largest economy in Asia and the 34th largest in the world 
in gross domestic product (GDP) terms, a rise in its global ranking compared with the 39th position 
in 2020 based on UN and World Bank estimates.1 According to th e Harvard Growth Lab's economic 
complexity index, in 2019 Malaysia remained the world's 24th (27th in 2018) most diverse economy.2 
Small and medium -sized enterprises (SMEs) continue to play a considerable role in the economy.3 
Developments in Malaysia's competitiveness position in the world reflect the decline in 
labour  productivity growth and, in particular, multifactor productivity growth (Table  1.1 and 
Section  1.2.1) – a key long -term determinant of international competitiveness and domestic living 
standards, but also weaknesses in several areas where reforms have been under way 
(Section  1.2.4).4 As a result of various structural reforms, Malaysia has progressively shifted from a 
manufacturing to a service economy, and from a heavily trade -dependent to  a more 
domestic -demand -driven economy.5 Pre-pandemic, Malaysia's diversified economy delivered 
sustained growth, on the back of strong policy frameworks.6 During the review period, growth slowed 
down mainly due to the COVID -19 outbreak coupled with strict containment measures (Table  1.1 
and Section  1.2.1); as from October  2021, the authorities have progressed in the reopening of the 
economy to avoid a repea t of the strict lockdown policies that halted the recovery the same year.7 
According to IMF and World Bank estimates, income inequality remains elevated compared with 
some East Asian peer countries; while it has continued to decline post -Global Financial Crisis, albeit 
 
1 World Bank (2021), Aiming High: Navigating the Next Stage of Malaysia's Development . Viewed at: 
https://www.worldbank.org/en/country/malaysia/publication/aiminghighmalaysia . Department of Statistics 
Malaysia, Current Population Estimates, Malaysia, 2021 . Viewed  at: 
https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=155&bul_id=ZjJOSnpJR21sQWV UcUp6
ODRudm5JZz09&menu_id=L0pheU43NWJwRWVSZklWdzQ4TlhUUT09 ; World Bank, The World Bank in 
Malaysia . Viewed at: https://www.worldbank.org/en/country/malaysia/overview#1 ; IMF, World Economic 
Outlook Database . Viewed at:  https://www.imf.org/e n/Publications/WEO/weo -database/2022/April ; and 
World  Bank, GDP (Current US $). Viewed at: 
https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?year_high_desc=true . 
2 Atlas of Economic Complexity, Country & Product Complexity Rankings . Viewed at: 
https://atlas.cid.harvard.edu/rankings . 
3 According to SME Corporation Malaysia, in 2020, SMEs represented a significant share of overall 
business establishments (1.52  million, or 97.2% of the total), accounted for 7 .25 million jobs (about 48% of 
total employment), 38.2%  of GDP, 13.5% of exports , and 85.5% of the services sector. For the manufacturing 
sector, they are defined as firms with sales turnover not exceeding MYR  50 million or number of full -time 
employees no t exceeding  200, while for the services and other sectors, they are firms with sales turnover not 
exceeding MYR  20 million or number of full -time employees not exceeding  75. IMF (2022), Malaysia: Staff 
Report for the 2022 Article  IV Consultation , IMF Count ry Report No.  22/126, 28  April. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2 022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
4 In 2021, Malaysia ranked 25th among 64  economies (22nd among 63  economies in 2018) and 2nd in 
Asia in the International Institute for Management Devel opment World Competitiveness Yearbook; this 
measurement takes into account indices relating to economic performance, government efficiency, business 
efficiency and infrastructure. Its strengths (highest rankings) inter alia related to indicators of the cur rent 
account balance, petrol prices, consumer price inflation, working hours, graduates in sciences, high -tech 
exports, and women with degrees, whereas its weaknesses (lowest rankings) included gross fixed capital 
formation -real growth, start -up procedures , female labour force, total health expenditure, medical assistance, 
energy intensity, broadband subscribers , and renewable energies. Malaysia Productivity Commission (undated), 
Malaysia in the IMD World Competitiveness Yearbook  2021. Viewed at: 
https://ww w.mpc.gov.my/static_files/media_manager/37/Leaflet%20IMD%20WCY%202021%20FINAL.pdf . 
5 OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed at: https://doi.org/10.1787/cc9499dd -
en. 
6 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications /CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
7 The reimposition of nationwide containment measures that accompanied the worsening pandemic 
stalled the nascent recovery in 2021 despite s everal additional fiscal stimulus packages (Box  1.1). IMF (2022), 
IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  at a slower pace, since 2019 it has started to increase again, and this continued into 2020.8 According 
to the latest available data, between 2019 and 2020, income inequality and the poverty gap rose 
due to, inter alia, the COVID -19 pandemi c, and the various Movement Control Orders (MCOs) that 
limited social and economic activities.9 
Table 1.1 Selected macroeconomic indicators, 2017 -21 
  2017  2018  2019  2020  2021  
National accounts (% age change, unless otherwise 
indicated)       
Real GDP (at 2015 prices)  5.8 4.8 4.4 -5.5 3.1 
 Consumption  6.7 7.1 6.6 -2.6 2.5 
 Private consumption  6.9 8.0 7.7 -4.2 1.9 
 Government consumption  5.7 3.4 1.5 5.0 5.3 
 Gross fixed capital formation  6.1 1.4 -2.1 -14.4 -0.9 
 Exports of goods and non -factor services  8.7 1.9 -1.0 -8.6 15.4 
 Imports of goods and non -factor services  10.2 1.5 -2.4 -7.9 17.7 
 XGS/GDP (%) (at current market price)  70.0 68.6 65.3 61.6 68.8 
 MGS/GDP (%) (at current market price)  63.1 61.8 57.8 55.2 61.7 
Unemployment rate (%)  3.4 3.3 3.3 4.5 4.6 
Productivity (% change)       
Labour productivity, value added per hour worked  3.7 3.5 2.3 3.5 -2.6 
Labour productivity, value added per employment  3.8 2.4 2.2 -5.3 1.8 
Multifactor productivity  2.2 1.3 1.2 -7.3 .. 
Inflation and interest rates (annual average)       
Inflation (CPI, % change)  3.7 1.0 0.7 -1.2 2.5 
Fixed 3 -month deposit rate (commercial banks)  2.92 3.14 2.98 1.95 1.56 
Savings deposit rate (commercial banks)  0.96 1.04 1.01 0.61 0.54 
Exchange rate       
MYR/USD (annual average)  4.300  4.035  4.142  4.203  4.143  
Nominal effective exchange rate (% change)  -3.7 5.3 -0.1 -1.1 -1.4 
Real effective exchange rate (% change)  -1.6 4.1 -1.3 -3.6 -1.3 
Federal government balance (% of GDP)       
Current revenue  16.1 16.1 17.5 15.9 15.1 
 Tax revenue  12.9 12.0 11.9 10.9 11.2 
Current expenditure  15.9 16.0 17.4 15.8 15.0 
Current government balance  0.2 0.1 0.1 0.0 0.1 
Development expenditure, net  3.1 3.8 3.5 3.5 4.1 
COVID -19 fund  0.0 0.0 0.0 2.7 2.4 
Overall balance  -2.9 -3.7 -3.4 -6.2 -6.4 
Federal government debt (end -period)  50.0 51.2 52.4 62.0 63.4 
 Domestic  35.3 38.8 38.7 45.8 46.2 
 External  14.8 12.4 13.7 16.2 17.2 
Saving and investment       
Gross national savings  32.4 30.6 28.6 26.1 29.4 
Gross domestic investment  29.6 28.4 25.1 21.9 25.6 
Saving -investment gap  2.8 2.2 3.5 4.2 3.8 
External sector       
Current account balance  2.8 2.2 3.5 4.2 3.8 
Net merchandise trade  8.5 7.9 8.2 9.7 11.0 
 Merchandise exports  58.4 57.3 54.0 55.0 63.2 
 Merchandise imports  49.9 49.4 45.8 45.3 52.2 
Services balance  -1.7 -1.2 -0.7 -3.3 -3.9 
Capital account  -0.0 -0.0 0.0 -0.0 -0.0 
Financial account  -0.3 0.8 -2.5 -5.5 0.8 
 Direct investment  1.2 0.7 0.4 0.2 1.8 
 
8 World Bank, The World Bank in Malaysia . Viewed at: 
https://www.worldbank.org/en/country/malaysia/overview#1 ; and IMF (2022), IMF Country Report 
No. 22/126. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-
Consultation -Press -Release -Staff-Report -and-Statement -by-the-517398 . 
9 As at 2020, Malaysia's income ine quality indicator stood at 0.411 compared to 0.399 in 2016 
and 0.407 in 2019. The Gini coefficient is based on the comparison of cumulative proportions of the population 
against cumulative proportions of income they receive, and it ranges between zero in t he case of perfect 
equality and one in the case of perfect inequality. As at 2020, the poverty gap stood at 8.4% compared 
to 7.6% in 2016 and 5.6% in 2019. The poverty gap is the ratio by which the mean income of the poor falls 
below the poverty line. The poverty line is defined as half the median household income of the total population. 
As per the July  2020 revised national poverty line, 5.6%  of Malaysian households were living in absolute 
poverty. Policy has been focused on addressing the well -being of t he poorest 40%  of the population ("the 
bottom  40") that seemingly remains particularly vulnerable to economic shocks as well as increases in the cost 
of living and mounting financial obligations. World Bank, The World Bank in Malaysia . Viewed at: 
https://www.worldbank.org/en/country/malaysia/overview#1 .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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    2017  2018  2019  2020  2021  
Balance  of payments  1.2 0.5 0.6 -1.4 3.0 
Merchandise exports (% change in MYR)  16.7 3.6 -1.6 -4.5 25.2 
Merchandise imports (% change in MYR)  17.0 4.6 -3.2 -7.1 25.4 
Service exports (% change in MYR) 8.0 1.9 4.8 -45.4 -6.7 
Service imports (% change in MYR)  9.4 -1.3 0.7 -22.6 5.2 
Gross official reserves (USD  billion, end -period)  102.4  101.4  103.6  107.6  116.9  
 in months of following year's imports of goods and 
non-factor services  5.5 5.8 6.7 5.6 5.4 
Gross external debt (USD  billion, end -period)  217.9  223.0  231.5  238.8  256.3  
 % of GDP  68.3 62.2 63.4 70.8 68.7 
Short -term external debt/total external debt (%)  39.7 43.9 41.1 38.3 37.5 
Debt service ratio  12.8 11.6 12.6 13.6 11.0 
.. Not available.  
Source:  Bank Negara Malaysia and Department of Statistics Malaysia, eStatistik ; and data provided by the 
authorities.  
1.2.  Malaysia's pre -pandemic solid macroeconomic position and its sound policy framework allowed 
it to react to the pandemic -induced  recession swiftly and boldly (Box  1.1).10 Nevertheless, downside 
risks to the economic outlook remain and are inter alia subject to COVID -19 pandemic 
developments. Domestic/endogenous risks to the economy may stem from, inter alia, a 
re-intensification of  the pandemic with mutated vaccine -resistant variants, fiscal risks from public 
debt and contingent liabilities, long -standing political and related policy uncertainty, and global 
information infrastructure failure.11 External/exogenous risks to the econom y may involve, inter alia, 
outbreaks of lethal and highly contagious COVID -19 variants with increased divergence across 
countries, extended global  supply chains disruptions (e.g.  lack of semi -conductors), abrupt growth 
slowdown in China, de -anchoring of in flation expectations in the United  States and/or advanced 
European economies, rising and volatile food and energy prices, spill -over from the 
Russian  Federation -Ukraine war, and natural disasters related to climate change.12 According to the 
IMF, macro pol icies need to be more accommodative if downside risks materialize.  
Box 1.1 Malaysia's response to the COVID -19 challenge  
The shock caused by the COVID -19 outbreak to Malaysia has been severe. Strict restrictions aimed at 
containing the first wave of infections in March  2020 result ed in one of the sharpest GDP  contractions in the 
region; after managing the second wave, the third wave of infections in 2021 required renewed strict but 
targeted restrictio ns. Malaysia, a  trade-dependent  economy well integrated into regional and global value 
chains (Section  1.2.1), was affected by the decline in international trade during the pandemic, a lthough  
external demand remained  an important source of growth. The impa ct has been felt disproportionately by 
firms (mainly small and medium -sized enterprises (SMEs)) in the contact -intensive service s sector and 
vulnerable households. Severe income losses occurred mainly in the service s and the agriculture sector s. 
Subsectors  such as arts, entertainment and recreation, food services, fishing , and transportation were among 
the most affected.  
Malaysia's robust economic position and the sound policy framework allowed it to react to the recession swiftly 
and boldly by introducing  sizeable fiscal stimulus packages and easing monetary policy (Section  1.2.3.1) as 
well by adopting a job -retention measure, which has been extended several times and currently remains in 
place. To finance economic stimulus  packages, a COVID -19 Fund was es tablished in September  2020 with a 
limit of MYR  45 billion, which was increased in December  2020 to MYR  65 billion and more recently to 
MYR 110 billion to account for COVID -19-related spending commitments in the 2022  Budget (see below). 
In 2020, five  stimu lus packages (the second included the first  one) amounting to 21.5% of GDP, including 
non-fiscal measures , were in place . The 2021  Budget strengthened the containment and support measures, 
increasing federal government expenditure by 2. 6% from 2020. In 202 1, four  additional stimulus packages 
(equivalent to 1 4.6% of GDP), some of which were front -loaded expenditures from the 2021  Budget, were 
introduced. The 2022  Budget allocated MYR  23 billion (1.4% of GDP) out of the COVID -19 Fund for 
COVID -19-related spen ding, with an increasing share spent on upskilling programs, social assistance support 
 
10 OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed at: 
https://doi. org/10.1787/cc9499dd -en. 
11 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://w ww.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
12 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-51739 8; and J.  Lim (2022),  "World Bank Trims Malaysia 's GDP 
Expansion to 5.5%, with Russia -Ukraine War a Key Growth Risk", The Edge Markets , 5 April. V iewed at: 
https://www.theedgemarkets.com/article/world -bank-cuts-2022-malaysia -gdp-growth -forecast -55-58. WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  to vulnerable  groups, and SME financing. A total of MYR  100 billion was to be spent from the COVID -19 Fund 
over 2020 -22, leaving a MYR  10 billion buffer for contingencie s or additional needed spending in  2022. The 
largest components were financial mitigation measures, mainly including a six -month loan moratorium on all 
bank loans except for credit card loans (MYR  100 billion) and government loan guarantees (MYR  50 billion ). 
In terms of allocation of spending categories, most spending has been on cash transfer program mes and wage 
subsidies , which according to the authorities accounted for 40% of total spending  (MYR 11.3 billion) . With 
several tax relief/exemption measures e xtended, including in the 2022  Budget, foregone revenues are 
estimated to have r anged from 0.3% (government data) to  0.8%  (IMF data)  of GDP over 2020 and 2021. The 
strong fiscal response widened deficit and debt levels, and the debt ceiling was twice raise d by a total of 
10 percentage points.  
Source : OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed at: 
https://doi.org/10.1787/cc9499dd -en; IMF  (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publication s/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -
Press -Release -Staff-Report -and-Statement -by-the-517398 ; Bank Negara Malaysia, Measures to 
Assist Businesses and Households Affected by the  COVID -19 Outbreak . Viewed at: 
https://www.bnm.gov.my/ -/measures -to-assist -businesses -and-households -affected -by-the-covid-
19-outbreak ; KPMG, Malaysia: Government and Institution Measures in Re sponse to COVID -19. 
Viewed at: https://home.kpmg/xx/en/home/insights/2020/04/malaysia -government -and-institution -
measures -in-response -to-covid.html ; S. Umair, U. Waqas, and M. Faheem (2020), "COVID -19 
Pandemic: Stringent Measures of Malaysia and Implications for other Countries", BMJ Journals , 
Vol. 97, Issue  1144. Viewed at: https://pmj.bmj.com/content/97/1144/130 ; Crowe, COVID -19 
Impact and Response . Viewed at: https://www.crowe.com/my/insights/COVID 19 -impact -and-
response , Ministry of Financ e (2021), "More than RM330 Bln of Economic Stimulus Packages 
Utilised – MOF", 5  October. Viewed at: https://www.mof.gov.my/p ortal/en/news/press -
citations/more -than-rm330 -bln-of-economic -stimulus -packages -utilised -mof; F. Ng (2021), 
"Malaysia 's Budget 2022 Aims for a Post-COVID -19 Economic Boost", In the Black , 1 November. 
Viewed at:  https://intheblack.cpaaustralia.com.au/economy/malaysian -budget -2022; and World 
Bank, The World Bank in Malaysia . Viewed at: 
https://www.worldbank.org/en/country/malaysia/overview#1 . 
1.2  Recent Economic Developments  
1.2.1   Growth, income, and employment  
1.3.  The Malaysian economy was on its targeted growth trajectory driven by strong private 
consumption and net exp orts. However, annual GDP growth slowed down progressively and 
contracted by  5.5% (2020) due to the various M CO phases implemented since 18  March  2020 to 
curb the COVID -19 outbreak after resuming at  3.1% in 2021 (equivalent to  53.4%  of its 
2017 growth rate  level), dragging down its annual average rate for the period 2017 -21 at  2.5%, a 
major drop compared to the average of about 5% in  2013-16 (Table  1.1).13 The economy rebounded 
in 2021 supported by the improvement in domestic demand and robust exports perfo rmance with 
growth driven by the manufacturing sector on the back of strong external demand; the 
export -oriented manufacturing sector underpinned growth, while lockdown measures affected other 
sectors (e.g.  the contact -intensive and the agriculture sectors ).14 According to the authorities , the 
economy was to improve further in  2022, with growth projected to expand by between 5.3% and 
6.3%, supported by the continued expansion in global demand, pent -up domestic demand, the lifting 
of domestic containment mea sures  following the transition to endemicity, reopening of international 
borders , and further improvement in labour market conditions. According to the IMF, growth is 
projected to be solid in the medium term, although risks of long -term economic scarring e xist as , 
inter alia, the pandemic could lead to permanent GDP reductions with a persistent negative impact 
on trade and Global Value Chain (GVC) patterns (Section  1.1 and below).  
1.4.  During the review period , the overall sectoral pattern of Malaysia's GDP and employment has 
mainly consisted of the increasing contribution of agriculture and manufacturing and the slight 
decline of services largely due to the COVID -19 outbreak (Table  1.2). For the same reasons an d 
reluctance to invest in automation and mechani zation, overdependence on low -skilled migrant 
workers, insufficient digital talent as well as low levels human capital upskilling and reskilling 
and R&D, both labour (in contrast with other Southeast Asian co untries) and multifactor productivity 
 
13 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
14 The severe delta variant outbreak in the middle of 2021 prompted strict nationwide containment 
measures, which limited real GDP growth. IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  growth slowed down and contracted in 2020 or 2021 depending on the indicator (Table  1.2 and 
Section  1.1).15 Malaysia remains deeply integrated in GVCs (Section  1.1), specializing in the final 
stages of the production p rocess (backward linkage).16 According to United  Nations Conference on 
Trade and Development (UNCTAD) estimates, in 2017, Malaysia ranked 3rd (same as in 2010) among 
the world's 25  top exporting developing economies by GVC participation rate; its GVC parti cipation 
in exports (64%  upstream) stood above the average of the developed exporting economies (60%) 
and the average of developing exporting economies (56%).17 Stringent COVID -19 lockdown 
episodes resulted in disruptions in the supply of semi -conductors , which led to shutdowns of many 
GVC-dependent global manufacturers.18 
Table 1.2 Basic economic and social indicators, 2017 -21 
 
2017  2018  2019  2020  2021  
Real GDP at market price (MYR  million, 
2015 prices)  1,300,769  1,363,766  1,423,952  1,345,144  1,386,738  
Current GDP at market price 
(MYR million)  1,372,310  1,447,760  1,512,738  1,418,000  1,545,372  
Current GDP at market price 
(USD  million)  319,109  358,789  365,178  337,339  372,981  
GDP per capita at current market price 
(USD)  9,965  11,080  11,228  10,353  11,422  
GDP by economic activity at constant 2015 prices (% age change)  
Agriculture, forestry and fishing  5.9 0.1 1.9 -2.4 -0.2 
 Agriculture  9.6 0.6 3.3 -0.5 -0.2 
 Forestry and logging  -15.9 -3.9 -8.6 -19.5 0.9 
 Fishing  -0.9 -0.8 -0.8 -6.9 -0.6 
Mining and quarrying  0.4 -2.2 -0.6 -9.7 0.3 
Manufacturing  6.0 5.0 3.8 -2.7 9.5 
Electricity, gas and water  2.9 5.0 6.1 -1.2 2.6 
Construction  6.7 4.2 0.4 -19.3 -5.2 
Services  6.5 7.0 6.2 -5.6 1.9 
 Wholesale and retail trade; 
accommodation and restaurants  7.3 8.4 7.3 -9.5 -0.1 
 Transport, storage, and 
communication  7.7 7.5 6.6 -4.7 4.7 
 Finance and insurance; real estate 
and business activities  5.9 6.4 6.1 -4.7 2.1 
 Other services  5.1 5.5 5.6 -10.4 -3.3 
 Government services  4.8 4.7 3.4 4.6 5.4 
Import duties  13.0 -8.5 -2.2 -5.2 1.7 
GDP by economic activities at current prices (%)  
Agriculture, forestry and fishing  8.6 7.5 7.2 8.2 9.6 
 Agriculture  7.1 6.0 5.8 6.9 8.4 
 Forestry and logging  0.6 0.5 0.5 0.4 0.4 
 Fishing  0.9 0.9 0.9 0.8 0.8 
Mining and quarrying  8.8 9.3 8.7 6.8 8.0 
Manufacturing  21.8 21.5 21.4 22.3 23.5 
Electricity, gas and water  2.6 2.6 2.7 2.9 2.7 
Construction  4.8 4.8 4.7 4.1 3.6 
Services  51.9 53.0 54.2 54.8 51.6 
 Wholesale and retail trade; 
accommodation and restaurants  19.2 19.9 20.5 20.0 18.6 
 Transport, storage, and 
communication  9.0 9.2 9.4 9.6 9.3 
 Finance and insurance; real estate 
and business activities  10.8 10.9 11.1 11.3 10.6 
 Other services  4.8 4.8 5.0 4.8 4.3 
 
15 OECD  (2021), OECD Economic Surveys: Malaysia  2021. Viewed  at: 
https://doi.org/10.1787/cc9499dd -en. 
16 L.M. Han and T .B. Hwa (2017), "Global Value Chains and the Drivers of Exports in Malaysia ", Bank 
Negara Mal aysia Quarterly Bulletin . Viewed at: 
https://www.bnm.gov.my/documents/20124/826874/Global+Value+Chains.pdf . 
17 The GVC participation rate indicates the share of a country's exports that is part of a multi -stage 
trade process. WTO, Trade in Value -Added and Global Value Chains: Statistical Profiles . Viewed at: 
https://www.wto.org/english/res_e/statis_e/miwi_e/MY_e.pdf ; and UNCTAD (2018), World Investment 
Report  2018 – Investment and New Industrial Policies . Viewed at: 
https://unctad.org/en/PublicationsLibrary/wir2018_en.pdf . 
18 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
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2017  2018  2019  2020  2021  
 Government services  8.2 8.2 8.1 9.0 8.7 
Import duties  1.4 1.2 1.1 1.1 1.1 
Share of sector in total employment  
Agriculture, forestry and fishing  12.7 12.4 12.4 12.4 12.3 
Mining and quarrying  0.6 0.6 0.5 0.5 0.5 
Manufacturing  16.8 16.9 16.9 16.9 17.1 
Electricity, gas and water  1.1 1.1 0.7 0.7 0.7 
Construction  8.9 8.7 9.7 9.3 9.1 
Service  59.8 60.3 59.9 60.3 60.4 
 Wholesale and retail trade  17.8 18.0 16.7 16.9 17.1 
 Accommodation and food service 
activities  8.3 8.8 10.8 10.8 10.7 
 Transport and storage  4.7 4.7 3.6 3.6 3.5 
 Information and communication  1.6 1.6 1.6 1.6 1.6 
 Financial and insurance activities  2.7 2.7 2.5 2.5 2.4 
 Real estate and business activities  7.0 7.1 7.4 7.5 7.3 
 Other services  17.7 17.4 17.3 17.4 17.6 
Source:  Bank Negara Malaysia and Department of Statistics Malaysia.  
1.5.  During the review period, Malaysia's unemployment rate remained relatively stable until it rose 
to 4.5% in  2020 and 4.6% in 2021 (Table  1.1) as a result, inter alia, of pandemic -prompted 
lockdowns in most sectors particularly those with the lowest ability to work from home (least 
teleworkable).19 However, since restrictions , including the closure of Malaysia 's international 
borders,  have been lifted and economic activity pick ed up, the unemployment rate was expected to 
decline further; as of June  2022, it stood at 3.8% of the labour force.20 As from  2015, employment 
in the informal sector declined from 10% of the labour market to 8.3% in  2019; own account workers 
and employees accounted for 71.7% and  17.1% of the informal sector , respectively , in 2019.21 
1.2.2   Prices  
1.6.  During the review period, headline inflation,  as measured by the consumer price index, dropped 
gradually, partially as a result of the 2017 -19 policies on retail fuel prices, the zero -rating of the 
Goods and Services Tax (GST) in 2018, and modest global cost pressures in 2019, and then turned 
in to d eflation in 2020 primarily due to the decline of global oil prices . In 2021 it rose to 2.5% due 
to the sharp rise of commodity prices, including global food and oil prices, driven by the recovery in 
economic activity and adverse weather conditions (Table  1.1); as of July  2022, inflation stood 
at 4.4%.22 According to the authorities, headline inflation was to average between 2.2% and 3.2% 
in 2022 amid higher core inflation. According to the IMF, in 2022 the outlook for core inflation 
remained benign, and hea dline inflation was to remain broadly unchanged.23 
 
19 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report-and-Statement -by-the-517398 . 
20 Bank Negara Malaysia (2022),  Economic and Monetary Review 2021 . Viewed at: 
https://www.bnm.gov.my/documents/20124/6458996/emr2021_en_book. pdf; and Publications: Monthly 
Highlights & Statistics in April  2022. Viewed at:  https://www.bnm.gov.my/ -/monthly -highlights -statistics -in-
april-2022; data viewed at: 
https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=124&bul_id=bU9ybEFIM2UrUlpxa2g4M
1JkOFhTdz09&menu_id=Tm8zcnRjdVRNWWlpWjRlbmtlaDk1UT09  and https://www.bnm.gov.my/national -
summary -data-page-for-malaysia . 
21 Department of Statistics Malaysia, Press Release: Informal Sector Work Force Survey Report, 
Malaysia, 2019 . Viewed at: 
https://dosm.gov.my/v1/index.php?r=column/pdfPrev&id=U0tMZmJudTkzNmhwdjZFb2FmVWxOUT09 . 
22 In mid-2018 the authorities announced the fixing of the retail fuel price of RON95  petrol at 
MYR 2.20 per litre for the remainder of the  year, with the 22  March  2018 price remaining unchanged. In 
January  2019, it was announced that the fuel price would be floated, but with the retail price of RON95 petrol 
capped at MYR  2.20 per litre. At end -February  2019, this price ceiling was lowered to  MYR 2.08 per litre. Bank 
Negara Malaysia (2022), Economic  and Monetary Review 2021. Viewed at: 
https://www.bnm.gov.my/documents/20124/6458996/emr2021_en_book.pdf ; and Publications: Monthly 
Highlights & Statistics in April  2022. Viewed at: https://www.bnm.gov.my/ -/monthly -highlights -statistics -in-
april-2022. 
23 IMF (2022), IMF Country Report N o. 22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
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  1.2.3   Main macroeconomic policy developments  
1.2.3.1   Monetary and exchange rate policy  
1.7.  During the review period , the objective of monetary policy remained to maintain price stability 
while giving due regard to the devel opments in the economy from the de jure independent central 
bank of Malaysia (Bank Negara Malaysia (BNM)), which uses an overnight policy rate (OPR) as its 
main policy instrument; BNM does not set a specific inflation target.24 According to the IMF, 
moneta ry policy decisions continued to be data -driven and guided by the evolving balance of risks 
surrounding the outlook for domestic growth and inflation. During the review period , the BNM 
continued its accommodative monetary policy stance to inter alia respon d to the pandemic, with 
its OPR gradually reduced from 3.25% (January  2018) to 3% (May  2019), 2.75% (January  2020), 
2.5% (March  2020), 2% (May  2020), and 1.75% (July  2020), until it was raised to 2% in May  2022 
and subsequently to 2.25% in July  2022.25 According to the IMF, the current accommodative 
monetary policy stance remains appropriate and Malaysia is well prepared to face a gradual increase 
in global interest rates although a sharp tightening of global financial conditions and risk-off investor 
behav iour could lead to surges in capital outflows.26 
1.8.  Malaysia's de jure and de facto  exchange rate arrangements have been floating (i.e.  floating 
exchange rate system) since September  2017.27 According to the IMF, the exchange rate should 
continue to serve as a shock absorber, with foreign exchange intervention limited to episodes of 
disorderly market conditions as Malaysia has a mature and multi -pronged monetary policy 
framework and its relatively liquid FX market lacks strong evidence of FX mismatches that po se 
systemic risk to the broader financial system .28 The BNM introduced a series of measures to improve 
the functioning of the foreign exchange market; resident exporters were inter alia exempted from 
the requirement to convert export proceeds into local currency below MYR  200,000 per transaction, 
among other measures , and the conversion requirement was finally removed in April  2021, 
liberalizing the foreign exchange market further.29 
1.9.  During the review period, the nominal MYR/USD exchange rate appreciated by an overall 
3.65% (2017 -21) (Table  1.1); in trade -weighted terms, overall, the effective exchange rate 
appreciated supported by Malaysia 's strong export performance, improving current a ccount balance, 
and strong GDP growth, thus reducing Malaysia's price competitiveness in international trade.30 The 
BNM's liquidity and foreign exchange operations provided further support in mitigating excessive 
market volatility and preserving orderly ma rket conditions.31 
 
24 OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed at: 
https://doi.org/10.1787/cc9499dd -en; IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 ; WTO document WT/TPR/S/366/Rev.1, 25  May 2018; and 
Bank Negara Malaysia, About the Bank . Viewed at: https://www.bnm.gov.my/introduction . 
25 Bank Negara Malaysia, Overnight Policy Rate Decisions . Viewed at: 
https://www.bnm.g ov.my/monetary -stability/opr -decisions . 
26 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
27 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Stateme nt-by-the-517398 . 
28 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf. org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
29 OECD (2021), OECD Economic Surveys: Malaysia 2021 . Viewed at: 
https://doi.org/10.1787/cc9499dd -en. 
30 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
31 Bank Negara Malaysia (2022), Economic  and Monetary Review 2021. Viewed at: 
https://www.bnm.gov.my/documents/20124/6458996/emr2021_en_book.pdf ; and Publications: Monthly 
Highlights & Statistics in April  2022. Viewed at:  https://www.bnm.gov.my/ -/monthly -highlights -statistics -in-
april-2022.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  1.2.3.2   Fiscal policy  
1.10.  During the review period, Malaysia continued to run a fiscal deficit, albeit at a rising rate, 
reaching 6.2% of GDP in 2020 and 6.4% of GDP in 2021, 117.5% higher than in 2017, largely due 
to subsidies, development expendit ure, pandemic response -related expenditure , and revenues 
continuing their pre -pandemic weakening trend (Table  1.1 and Box  1.1). Accordingly, Malaysia's 
relatively high level of government debt (according to the IMF) has been further pushed up from 
50% in  2017 to 63.4% of GDP in 2021 , of which 61.5  percentage points are domestically financed.32 
The 2022  Budget remained focused on supporting the recovery and minimizing the pandemic 's 
long-term effects while at the same time lifting -off a cautious adjustment p ath; it targets a slight 
narrowing of the overall deficit to 6% of GDP in 2022 and confirms the commitment to medium -term 
consolidation to rebuild fiscal buffers.33 Accordingly, the authorities plan to pursue fiscal 
consolidation through reform initiatives  including the introduction of a Fiscal Responsibility Act to 
further enhance fiscal discipline, expenditure effectiveness , and transparency in fiscal management; 
as at late October  2022, the relevant bill was pending approval by the Parliament.  
1.2.4   Structural  policies  
1.11.  Trade and domestic reform are considered intrinsically linked. During the review period , the 
authorities envisaged sustaining growth and achieving high -income status through their 
11th Malaysia Plan  2016-20, which laid out a comprehensive reform agenda to transform the country 
into a productivity -driven and knowledge -based economy (Section  1.1).34 The 12th Malaysia 
Plan (12MP or Twelfth Plan) for 2021 -25 aims for high -income status and a carbon -neutral economy; 
it provides a five -year road map, to boost labour productivity and transport infrastructure, accelerate 
innovation , and enhance the di gital and green economies, while narrowing development disparities 
across regions and strengthening fiscal governance.35 According to the IMF, coordinated policies are 
needed to inter alia address structural challenges including inequality.  
1.2.4.1   Tax reform  
1.12.  The ratio of federal government revenue to GDP remained on a steady decline driven by the 
decreasing share of petroleum -related revenues as a result of global declines in commodity prices 
until 2021 when it registered a minor rise (Table  1.1), and despite effo rts to diversify revenue 
sources (below), Malaysia remains overly dependent on this type of revenue.36 Furthermore, the 
authorities under -collect in key revenue areas, including consumption tax and personal income 
taxes, and the generous tax incentives system also contributes to the narrowing of the government's 
revenue base.  
1.13.  During the review period , tax reforms included efforts to broaden the tax base; the 
introduction of taxes concerning imported taxable services  (2019) and digital services purchased 
through foreign service providers  (2020) and excise duty on electronic cigarettes  (2021); the 
expansion o f the tourism tax to accommodation services booked through online platforms  (2021); 
 
32 OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed  at: 
https://doi.org/10.1787/cc9499dd -en; and IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
33 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Repor t-and-Statement -by-the-517398 . 
34 WTO document WT/TPR/S/366/Rev.1, 25  May 2018; and Prime Minister's Department, Mid-Term 
Review of the Eleventh Malaysia Plan 2016 -2020. Viewed at: https://www.epu.gov.my/en/economic -
developments/development -plans/rmk/mid -term-review -eleventh -malaysia -plan-2016-2020. 
35 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
36 OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed at: 
https://doi.org/10.1787/cc9499dd -en; and World Bank Group (2021), Aiming High : Navigating the Next Stage 
of Malaysia's Development . Viewed at: 
https://www.worldbank.org/en/country/malaysia/publication/aiminghighmalaysia . WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  and the enhancement of the progressivity of the personal income tax by introducing a new bracket 
of above MYR  2 million per annum subject to a 30% tax rate (before  28%) (20 20).37 
1.14.  According to the World Bank, financing the transition to high -income status (above and 
Section  1.1) would require an enhanced effort to raise more revenue and spend it effectively; 
therefore, reforms to increase tax revenues, strengthen the social s afety net, and effectively target 
assistance are required.38 According to the OECD, there is also need to strengthen tax compliance 
and efficiency of tax collection, while securing the transparency of its enforcement (including by 
reviewing tax incentives and exemptions).39 In response, the 2022 Budget called for bold and 
effective reforms to the tax system through the adoption of a medium -term revenue strategy, to 
ensure sufficient funding for expenditure needs under the Twelfth  Plan.40 
1.2.4.2   Privatization  
1.15.  The a dministration maintains a controlling stake in key industries through government -linked 
companies (GLCs) controlled by government -linked investment companies (GLICs) that account 
for 5%) of employment and more than half of the value of the local benchmark stock index. As at 
the previous Review, there has been no progress in this area as the public -private  partnership is 
preferred (Section  3.3.5).41 In 2022 , GLCs and GLICs were requested to direct their efforts towards 
the three  main focus areas outlined in Budget  2022 (i.e.  the Malaysian Family ( Keluarga Malaysia ), 
businesses , and economy) so as to prioritize economic recovery efforts for a return to sustainability 
and to narrow the economic gap through community empowerment, sustainability concept -based 
projects, and development projects to stimulate recovery , as well as digital connectivity projects.42 
1.2.4.3   Competition policy  
1.16.  According to the authorities, an economy with healthy levels of competition increases a 
country's attractiveness as a place of doing busin ess and lead to large flows of domestic and foreign 
investments; the Malaysia Competition Commission (MyCC) continued to ensure that concerted 
efforts are taken to combat anti -competitive practices and to cultivate a healthy and competitive 
marketplace in sync with the needs for sustainable growth of the Malaysian economy 
(Section  3.3.4).43 In January  2022, MyCC suggested structural policies to facilitate the adoption of 
e-commerce strategies, particularly by SMEs, taking the lessons from the pandemic years .44 
Furthermore, work to amend the Malaysian Competition Act  2010 has been under way since 2019 
(Section  3.3.4); key amendments would introduce a merger control regime and strengthen MyCC's 
investigation and enforcement powers.45 
 
37 OECD (2021), OECD Economic Surveys: Mal aysia 2021. Viewed at: 
https://doi.org/10.1787/cc9499dd -en. 
38 World Bank Group (2021), Aiming High : Navigating the Next Stage of Malaysia's Development . 
Viewed at: https://www.worldbank.org/en/country/malaysia/publication/aiminghighmalaysia . 
39 OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed at: 
https://d oi.org/10.1787/cc9499dd -en. 
40 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https: //www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
41 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
42 The Malaysian Reserve  (2022), " GLCs, GLICs Should Give Focus on Three Main Areas under 
Budget  2022", 13 March. Viewed at: https://themalaysianreserve.com/2022/03/13/glcs -glics-should -give-
focus -on-three -main-areas -under -budget -2022/ . 
43 Malaysia Competit ion Commission (2020), Annual Report 2019 . Viewed at: 
https://www.mycc.gov.my/sites/default/files/pdf/newsroom/MyCC%20AR%2719_ENG_0.pdf . 
44 The Malaysian Reser ve (2022), " MyCC to Amend Competition Law to Drive Innovation ", 10 January. 
Viewed at: https://themalaysianreserve.com/2022/01/10/mycc -to-amend -competition -law-to-drive-
innovationn/ . 
45 Baker McKenzie (2022),  Malaysia: Proposed Amendments to Competition Act 2010 – Strengthening 
MyCC's Investigation and Enforcement Powers . Viewed at: 
https://insightplus.bakermckenzie.com/bm/antitrust -competition_1/malaysia -proposed -amendments -to-
competition -act-2010-strengthening -myccs -investigation -and-enforcement -powers . WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  1.2.4.4   Corporate governance  
1.17.  Good corporate governance contributes to sustainable economic development by enhancing 
the performance of companies and increasing their access to outside capital.46 Malaysia's Securities 
Commission's (SC) Corporate Governance Strategic Priorities  2017–2020 com prised enhancing the 
corporate governance (CG) regulatory framework; strengthening the CG ecosystem; promoting 
greater gender diversity on boards; embedding CG early in the life cycle of companies and among 
youth; and leveraging technology to enhance monit oring of CG practices and shareholder activism.47 
Under the Corporate Governance Strategic Priorities  2021-2023, the SC will be focusing on inter alia 
strengthening board capacity to address sustainability, scale up investor stewardship, 
enhance  availabili ty of CG data through the use of digital tools, and further develop the collaboration 
with universities to deepen engagement with youth on CG.48 In 2019, the relevant rules 
and guidelines  were updated to mandate listed issuers and capital market intermedia ries to have 
anti-corruption and whistleblowing policies in place. In April  2021, the SC issued an update of the 
Malaysian Code  on Corporate Governance (MCCG). In relation to promoting board diversity and 
independence, a 12 -year tenure limit was introduced  in January  2022 for independent directors on 
boards of listed issuers, effective on or after 1  June 2023. Furthermore, the Listing Requirements 
were also amended to require boards of listed issuers to include  at least one female director, coming 
into effe ct on 1  September  2022 for large issuers (those with market capitali zation of MYR 2 billion 
and above) and on 1  June 2023 for the remaining issuers.  
1.18.  Efforts to strengthen the GLCs' (Section  1.2.4.2) governance included the issue of a directive 
in 2018 requiring all such to establish an Integrity and Governance Unit (IGU) in order to strengthen 
internal controls and prevent the risk of corruption and abuse of power; however, it seems that 
political appointments for board and chair person  positions  persist and threaten the autonomy of 
GLCs decision -making bodies.49 According to the OECD, Malaysia could benefit from adopting the 
recommendations of the OECD Guidelines on Anti -Corruption and Integrity in State -Owned 
Enterprises. Consequently, the updated MCCG highlighted that the OECD Guidelines on Corporate 
Governance  of State -Owned Enterprises (Guidelines) inter alia recommend that SOE board 
composition should allow the exercise of objective and independent judgement.  
1.2.4.5   Labour market policies  
1.19.  During the review period , labour market developments took place in several ar eas. The 
minimum wage was standardized in 2018 across the country to MYR  1,100  per month (USD  273), a 
rise from MYR  1,000 (USD  241) in Peninsular Malaysia and MYR  920 (USD  222) in East Malaysia 
in 2016, followed by another increase to MYR  1,200 per month ( USD 286) (MYR  5.77 per hour) in 
56 city and municipal council areas and MYR  1,100 per month (MYR  5.29 per hour) in other areas 
in 2020. Effective from 1  May 2022, a minimum wage of MYR  1,500 has been implemented for 
employers with five or more workers and employers who are carrying out professional activities 
regardless of the number of employees employed , while those employing five workers or less are 
given deferment until 31  December  2022; as from 1  January  2023, the minimum wage of MYR 1,500 
is to be imp lemented across the country.50 While the statutory retirement age of public sector 
workers was raised to 60  in 2013 (Minimum Retirement Age Act  2012), private sector employees 
are allowed to opt for early retirement by the age of  55 as mandatory retirement  is at 60 for them 
too. According to the OECD, encouraging more elderly people to stay longer in the labour force would 
bring about multiple economic benefits; however, others consider that it is not the right time for 
 
46 World Bank Group, World Bank Group A to Z 2016: Corporate Governance . Viewed at: 
http://elibrary.worldbank.o rg/doi/full/10.1596/978 -1-4648-0484-7_corporate_governance . 
47 Securities Commission (2018), Corporate Governance: Strategic Priorities 201 -2020. Viewed at: 
https://www.sc.com.my/api/documentms/download.ashx?id=7373ce94 -78e9-456b-9b8f-c7749f11c08c . 
48 Securities Commission, Corporate Governance . Viewed at: 
https://www.sc.com.my/regulation/corporate -governance . 
49 OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed at: 
https://doi.org/1 0.1787/cc9499dd -en. 
50 Reportedly, enforcement of the minimum wage remains lax for certain migrant workers , especially 
low-skilled labourers recruited by labour supply companies from poor neighbouring countries. EIU  (2021), 
Regulatory Environment: Malaysia , 1 July. Viewed at: 
https://viewpoint.eiu.com/analysis/geography/XO/MY/reports/regulatory -environment ; Rödl & Partner (2022), 
"Malaysia: New Minimum Wages Ord er Effective as of 1  May 2022", 11  May. V iewed at: 
https://www.roedl.com/insights/malaysia -increase -minimum -wage -amendment ; and OECD (2021), 
OECD  Economic Surveys: Mala ysia 2021 . Viewed at: https://doi.org/10.1787/cc9499dd -en. WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Malaysia to implement a blanket incre ase in the statutory retirement age taking into account the 
current overall and youth (aged between 15 and 24) unemployment rates amid COVID -19 and 
economic uncertainties.51 
1.20.  During the review period , a mix of measures were introduced to , inter alia, limit the number 
of migrant workers; they included a new job advertisement requirement for the employment of 
expatriates, effective January  2021, at the government -run portal for jobseekers called 
MyFutureJobs ( https://www.myfuturejobs.gov.my ), managed by the Social Security Organisation 
(SOCSO) as a prerequisite condition when applying for expatriate posts to the relevant 
approving  authorities that include , inter alia, the Malaysian Investment Development Authority  
(MIDA) and the Malaysia Digital Economy Corporation (MDEC) , according to their respective sectors 
and scope of coverage, as well as a Malaysia@Work incentive programme providing cash incentives 
for a two -year period to encourage the recruitment of four ca tegories of nationals (those who replace 
migrant workers, women returning to work after a career break of at least one year, 
college  graduates who were unemployed for at least 12  months , and apprentices).52 As a result of 
pandemic -related restrictions on e conomic activities and border closures, the share of the 
non-Malaysian citizens dropped from  15% (2019) to 14% (2020) of the total labour force; as of 
end-November  2020 there were about 1.38  million registered migrant workers and seemingly an 
estimated 1.8  million more worked illegally. Several industries – including electronics manufacturing, 
oil palm plantations , and construction – continue to rely on lower -skilled migrant labour.  
1.21.  Malaysia's labour market saw a distinctive advancement in its inclusiveness. Female labour 
force participation increased from 5.95  million (55.2% of total labour force) in 2018 to 6.17  million 
(55.5%) in 2021; furthermore, according to the OECD, prior to the pandemic the share of women 
in the total labour force parti cipation (aged 15 -64) rose from 64% in  2010 to 69% in  2019 along 
with the increase in their education attainment, helping the economy achieve high growth.53 
According to the IMF, active labour market policies to upskill workers dislocated by the pandemic 
could incentivize movement from informal to formal employment, thus facilitat ing a reallocation of 
resources and limit ing the pandemic's scarring.54 
1.2.5   Balance of payments  
1.22.  During the review period, Malaysia's current account surplus peaked at 4.2% of GDP in 20 20, 
reflecting higher goods surplus and lower deficits in the primary and secondary income accounts, 
and then slightly declined to 3.8% in 2021 as a result of a larger decline in travel receipts and higher 
income accrued to foreign investors in Malaysia am id strong external demand for manufactured 
goods with these factors more than offsetting the larger goods surplus (Tables  1.1 and  1.3); it 
averaged 3.3% of GDP during 2017 -21, the same as in 2013 -16. According to the IMF, the current 
account surplus is to decline gradually over the medium term, as consumption and capital -related 
imports recover, despite a gradual pick -up in foreign tourism flows as the economy reopens.55 
 
51 OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed at: 
https://doi.org/10.1787/cc949 9dd-en; and information viewed at: 
https://www.thestar.com.my/news/natio n/2022/03/06/no -to-increasing -retirement -
age#:~:text=Malaysia's%20retirement%20age%20for%20public,at%2060%20instead%20of%2055 .  
52 OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed at: 
https://doi.org/10.1787/cc9499dd -en; and EIU (2021), Regulatory Environment: Malaysia , 1 July. Viewed at: 
https://viewpoint.eiu.com/analysis/geography/XO/MY/reports/regulatory -environment . 
53 OECD (2021), OECD Economic Surveys: Malaysia  2021. Viewed at: 
https://doi.org/10.1787/cc9499dd -en. 
54 IMF (2022), IMF Co untry Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/ 28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
55 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 1.3 Balance of payments, 2017 -21 
(MYR million)  
  2017  2018  2019  2020  2021  
Current account balance  38,296.1  32,295.0  52,917.5  59,091.1  58,700.3  
Goods and services balance  94,254.5  97,105.8  113,863.3  90,325.1  109,845.0  
 Goods balance  117,113.2  114,620.8  124,738.3  137,486.4  170,572.9  
 Exports  801,394.1  830,136.7  817,260.2  780,510.8  977,076.2  
 Imports  684,280.9  715,515.9  692,521.9  643,024.4  806,503.3  
 Services balance  -22,858.7  -17,514.9  -10,875.0  -47,161.3  -60,727.9  
 Credit  159,383.9  162,374.5  170,221.2  92,966.6  86,740.9  
 Debit  182,242.6  179,889.4  181,096.1  140,127.9  147,468.9  
 Primary income balance  -38,658.3  -45,082.2  -39,495.8  -28,520.2  -41,550.5  
 Credit  53,706.5  60,413.7  65,344.1  53,124.4  98,165.7  
 Debit  92,364.7  105,495.8  104,839.9  81,644.6  139,716.2  
 Secondary income balance  -17,300.4  -19,728.6  -21,450.0  -2,713.8  -9,594.2  
 Credit  16,796.8  15,601.7  16,905.1  27,185.4  20,503.5  
 Debit  34,097.1  35,330.3  38,355.1  29,899.2  30,097.6  
Capital account  -25.7 -89.1 370.7  -419.1  -570.6  
Financial account  -4,730.0  11,430.5  -38,023.5  -77,396.4  13,021.3  
Direct investment  16,171.1  10,103.5  6,554.5  3,111.1  28,465.5  
 Assets  -24,234.3  -23,431.1  -31,154.5  -13,807.8  -48,896.8  
 Liabilities  40,405.5  33,534.6  37,709.0  16,918.9  77,362.3  
Portfolio investments  -15,358.0  -49,395.6  -32,402.9  -49,584.5  18,769.0  
 Assets  -19,442.2  -11,984.4  -46,919.5  -60,694.6  -35,822.5  
 Liabilities  4,084.2  -37,411.2  14,516.5  11,110.1  54,591.5  
Financial derivatives  -196.9  980.8  -477.8  407.2  -2,250.0  
Other investments  -5,346.2  49,741.8  -11,697.3  -31,330.3  -31,963.2  
 Net acquisition of financial 
assets  -2,260.8  9,581.9  -2,561.6  3,907.5  23,236.4  
 Net incurrence of liabilities  -9,208.9  -1,675.6  10,274.8  -20,826.3  36,060.8  
Reserve assets  -16,408.6  -7,758.3  -8,416.0  19,296.6  -45,685.7  
Errors and omissions  -17,131.9  -35,878.1  -6,848.0  -573.0  -25,465.0  
Memorandum:       
Direct investment according to 
directional principle  16,171.1  10,103.5  6,554.5  3,111.1  28,465.5  
 Malaysia's direct investment 
abroad  -24,247.9  -20,637.5  -25,809.7  -10,169.8  -19,678.8  
 Direct investment in Malaysia  40,419.0  30,741.0  32,364.2  13,281.0  48,144.3  
Source:  Bank Negara Malaysia.  
1.23.  During the review period , Malaysia's gross external debt grew by 17.6%, to USD  256.3  billion 
(37.5% (government data) or 36.8% (IMF data)) short -term by original maturity in  2021) due to, 
inter alia, an increase in non -resident holdings of Ringgit -denominated government debt secur ities, 
net issuances of foreign currency bonds and notes, higher trade credits, and an additional allocation 
of Special Drawing Rights (SDRs) to Malaysia by the IMF in 2021 (Table  1.1). As a result, during the 
review period the debt  service ratio peaked at 13.6% of GDP in 2020 and then bottomed to 11% 
in 2021. As a percentage of GDP, gross external debt peaked at 70.8% in  2020 due to the smaller 
GDP value, and dropped slightly in 2021 driven by a reduction in offshore borrowings, namely 
private  sector external debt (Table  1.1).56 According to the IMF, over the medium term, external 
debt-to-GDP ratio is to return to a steady downward path, reflecting the net effect of sustained 
current account surpluses (excluding interest payments), a recovery in ec onomic growth supported 
by domestic demand, capital inflows, and low external financing rates; the share of short -term debt, 
by original maturity, is to stabilize at about 35% by the end of the medium term.57 According to the 
authorities, while external de bt is high, it remains manageable due to mitigating factors.  
1.24.  During the period 2018 -21, Malaysia's foreign exchange reserves increased steadily by an 
overall 15.2%, largely due to strong export performance from 2019 to 2021 and the IMF's SDRs 
allocation in  2021 (Table  1.1), and as from February  2022 they have declined progressively.58 As at 
30 August  2022, foreign exchange reserves had dropped slightly to USD  108.2  billion, equivalent 
 
56 OECD (2021), OECD Economic Surveys: Mala ysia 2021. Viewed at: 
https://doi.org/10.1787/cc9499dd -en; and IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
57 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Mal aysia-2022-Article -IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
58 Bank Negara Malaysia, International Reserves and Foreign Currency Liquidity . Viewed at: 
https://www.bnm.gov.my/international -reserves -and-foreign -currency -liquidity . WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  to 5.4 months of imports of goods and services, and 1.1  times the total short -term external debt.59 
Gross official reserves are adequate under the IMF As sessing Reserve Adequacy ((ARA) or 
risk-weighted) metric.60 
1.3  Developments in Trade and Investment  
1.3.1   Trends and patterns in merchandise and services trade  
1.25.  Openness to trade and investment has been instrumental in employment creation and income 
growth (Section  1.1).61 The openness of the Malaysian economy to international trade and its 
integration into the world economy continued to be reflected in the high ratio of the country's trade 
(exports plus imports) in goods and services to GDP . Nevertheless, this ratio  continued to drop 
progressively from 133.2% in  2017 to 130.6% in  2021 (Table  1.1), including a bottoming to 116.8% 
in 2020, partly due to global economic conditions affecting the volume of trade, compared with the 
decrease from 142.7% in 2013 to 126.9% in  2016.62 
1.26.  Since the previous Review, merchandise trade has remained almost entirely dependent on 
manufactures (Chart  1.1, and Tables  A1.1 and  A1.2). As of  2021, the share of all items 
(e.g. machinery and electrical equipment, precision equipment, base metal s and articles thereof, 
chemicals, and plastics and rubber ) in total exports had risen except for the share of petroleum and 
mineral products , which registered a drop related to global oil prices developments. Machinery and 
electrical equipment and petrole um and mineral products continued to account for more than half of 
total imports.  
 
59 Bank Negara Malaysia, International Reserves of Bank Negara Malaysia as at 30  August  2022. 
Viewed  at: https://www.bnm.gov.my/ -/international -reserves -of-bank-negara -malaysia -as-at-30-august -2022.  
60 IMF (2022), IMF Country Report No.  22/126. Viewed at: 
https://www.imf.org/en/Publications/CR/Issues/2022/04/28/Malaysia -2022-Article-IV-Consultation -Press -
Release -Staff-Report -and-Statement -by-the-517398 . 
61 World Bank, The World Bank in Malaysia . Viewed at: 
https://www.worldbank.org/en/country/malaysia/ov erview#1 .  
62 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Chart 1.1 Product composition of merchandise trade by main HS section, 2017 and 2021  
 
Source:  WTO Secretariat  calculations, based on UN Comtrade database.  
1.27.  At the same period, Malaysia's more than 70% dependence on merchandise trade with 
economies in the region remained unchanged , with shares varying on annual basis for both imports 
and exports (Chart  1.2, and Tab les A1.3 and  A1.4). Notwithstanding some fluctuation in trade 
shares, as of 2021 , 25.9% (27.2% in  2018) of total merchandise trade was conducted with trading 
partners from the Association of Southeast Asian Nations (ASEAN) (Section  2.3.2.1). Malaysia's mai n 
individual trading partners remain China, Singapore, the European  Union (EU -27), and the 
United  States.  
Chart 1.[MYS]  Product composition of merchandise trade by main HS section, 2017 and 2021
2017 2021
Total:   USD 217.7 billion Total:  USD 299.2 billion  
Base metals & 
articles thereof
8.4%Petroleum & 
mineral products 
13.2%
Base metals &
articles thereof
8.6% 
Total:   USD 194.7 billionTotal:   USD 238.2 billion Other
10.6%
Source:  WTO Secretariat calculations, based on UN Comtrade database.Other 
13.2%Fats & oils
6.2%
Other
14.0%Transport equipment
3.4%
Prepared food, 
beverages & tobacco  
3.2%Other
13.3%
Chemicals 
8.2%Transport equipment
5.0%Fats & oils
6.6%
Plastics & rubber
6.8%
Machinery;
electrical 
equipment
39.8% Machinery; 
electrical 
equipment
39.1% 
Plastics & rubber
6.5% Plastics & rubber 
6.0% Petroleum & 
mineral products
14.0%Petroleum & 
mineral products
14.1%Precision equipment
3.2%
Prepared food, 
beverages & tobacco 
3.2%Exports (f.o.b.)
Imports (c.i.f.)Plastics & rubber
9.0%Petroleum & 
mineral products
16.2%
Chemicals
5.6%Chemicals
6.0%
Chemicals 
7.3%Base metals &
articles thereof
7.3%Base metals & 
articles thereof
5.6%
Precision equipment
2.9%Precision
equipment
4.4%Precision 
equipment
3.8%
Machinery; 
electrical 
equipment
42.6% Machinery; 
electrical
equipment
42.8% WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Chart 1.2 Direction of merchandise trade, 2017 and 2021  
 
Source:  WTO Secretariat calculations , based o n UN Comtrade database.  
1.28.  During the review period, Malaysia remained a net importer of services, running a deficit in 
the services account that bottomed at 0.7% of GDP in  2019, then rose to peak at 3.9% of GDP 
in 2021 (Section  1.2.4. 5, and Tables  1.1, 1.3, and 1.4). Other business services, transportation, 
travel, and manufacturing services remain the major traded services.  
Chart 1.2  Direction of merchandise trade, 2017 and 2021
2017 2021
(a)    Exports (f.o.b.)
Other Asia
42.0%
Total:   USD 217.7 billion Total:  USD 299.2 billion
(b)    Imports (c.i.f.)
Other 
11.2%
China
19.7%
EU-27
8.8%
Singapore
11.1%United States
7.8%
EU-27
7.8%China
23.2%
Thailand
4.6%Singapore
9.5%United States
7.6%
Total:   USD 194.7 billion Total:   USD 238.2 billionOther Asia
42.7%Japan
8.1%
United States
9.5%Other Asia
11.7%
United States
11.5%Other 
9.6%
Source :  UNSD, Comtrade database.Japan
7.5%China
15.5%
Singapore
14.0%EU-27
8.4%China
13.5%
Singapore
14.3%
Other Asia
50.7%Other Asia
46.5%Japan
7.6%
Other
10.4%Other Asia
12.3%Hong Kong,
China
6.2%
EU-27
9.2%Other
10.4%India  
3.7%
Viet Nam
3.7%Hong Kong, 
China
5.1%
Japan
6.1%
Thailand
4.2%Other Asia
11.4%
Thailand 
5.8%Other Asia 
13.0%Chinese Taipei
7.6%Chinese  Taipei
6.5%
Indonesia
4.5% Indonesia
5.7%Thailand
5.4%Indonesia
3.2%Indonesia
3.6%
ASEAN
23.6%ASEAN
25.7%ASEAN
27.7%ASEAN
28.9%
Other ASEAN
4.0%Other ASEAN
4.1%Other ASEAN
2.6%Other ASEAN
2.7%India
3.6%
Viet Nam
3.0%WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 1.4 Trade in services, 2017 -21 
  2017  2018  2019  2020  2021  
Total credit (MYR billion)  159.4  162.4  170.2  93.0 86.7  
(% of total credit)  
Manufacturing services on physical inputs owned by others  6.7 7.2 7.0 13.7 17.8 
Maintenance and repair services  1.1 1.3 1.4 2.0 2.0 
Transport  12.1 12.6 12.8 14.8 17.8 
Travel  49.5 48.8 48.3 13.4 0.4 
Construction  2.6 2.1 1.6 3.5 4.4 
Insurance and pension  0.8 0.8 0.9 1.9 2.3 
Financial services  1.4 1.5 1.5 2.9 2.9 
Charges for intellectual property  0.8 0.7 0.5 1.1 1.4 
Telecommunication, computer and information  7.2 7.0 7.3 14.4 15.9 
Other business services  16.2 16.5 17.2 29.3 31.2 
Personal, cultural and recreational services  1.3 1.2 1.4 2.7 3.4 
Government goods and services n.i.e.  0.3 0.2 0.2 0.4 0.4 
Total debit (MYR  billion)  182.2  179.9  181.1  140.1  147.5   
(% of total debit)  
Manufacturing services on physical inputs owned by others  0.2 0.3 0.3 0.6 0.9 
Maintenance and repair services  1.1 1.1 1.3 1.3 1.4 
Transport  26.8 26.8 26.3 29.4 32.5 
Travel  25.5 27.2 28.3 14.3 10.1 
Construction  9.2 6.5 3.1 2.7 3.0 
Insurance and pension  5.4 5.5 5.4 6.7 7.1 
Financial services  1.3 1.4 1.5 1.8 1.8 
Charges for intellectual property  4.3 4.5 5.1 7.2 7.3 
Telecommunication, computer and information  7.2 7.3 8.1 11.9 11.9 
Other business services  16.2 17.0 18.2 21.2 21.0 
Personal, cultural and recreational services  1.9 1.8 1.8 2.1 2.3 
Government goods and services n.i.e.  1.0 0.6 0.6 0.7 0.8 
Source:  Department of Statistics Malaysia , eStatisti k. 
1.3.2   Trends and patterns in FDI  
1.29.  Inward foreign direct investment (FDI ) is not only an additional source of capital, but it also 
brings entrepreneurship, management skills, and especially new technology, which contribute to 
improved multifactor productivity. Malaysia's relatively liberal foreign investment regime and ease 
of doing business continued to ensure robust and rising FDI inflows during the review period . On a 
balance of payments basis , FDI inflows bottomed in 2020 amid the contraction in global economic 
activity, domestic lockdown measures to contain the pandemic an d low commodity prices, and 
peaked in 2021 (Table  1.3) driven by the recovery in global and domestic economies, which 
encouraged global multinational corporations to expand capacity and undertake new investment in 
the country. Malaysia 's FDI was also suppo rted by the continued global technology upcycle as foreign 
firms invested to meet rising demand for electrical and electronics (E&E) -related products. 
Between  2017 and 2021 , inward FDI stock rose steadily by 32.5%. As of 2020, it remained largely 
allocated  to services (mainly finance and insurance/takaful activities) and manufacturing; it mainly 
originated in Singapore ; Hong Kong,  China ; and Japan  (Table  1.5). 
Table 1.5 Stock of foreign direct investment in Mal aysia, 2017 -21 
  2017  2018  2019  2020  2021  
Total (MYR  billion – end-period)  595.5  639.7  687.8  684.9  788.8  
 % of GDP  43.4 44.2 45.5 48.3 51.0 
By sector (% of total)       
Agriculture, forestry and fishing  2.0 1.8 1.8 1.6 1.8 
Mining and quarrying  8.3 7.1 6.5 5.1 5.3 
Manufacturing  39.4 40.8 39.5 39.9 42.2 
Construction  1.5 1.5 1.7 1.6 1.5 
Services  48.8 48.8 50.6 51.7 49.2 
 Wholesale and retail trade  6.9 5.9 5.9 6.0 5.6 
 Finance and insurance/takaful activities  20.9 23.8 23.0 24.8 22.5 
 Information and communication  8.1 5.9 5.4 5.0 4.8 
 Other services  12.8 13.1 16.2 16.0 16.3 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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    2017  2018  2019  2020  2021  
By partner (% of total)       
Singapore  19.7 18.7 20.7 22.2 21.4 
Hong Kong,  China  9.5 11.7 12.8 12.2 10.9 
Japan  12.1 12.8 10.9 11.0 10.5 
United  States  5.6 5.8 6.0 5.8 9.7 
Netherlands  6.8 6.9 8.5 7.8 7.8 
Switzerland  5.0 6.6 6.1 5.5 4.1 
United  Kingdom  3.5 3.4 3.2 2.6 3.8 
British  Virgin  Islands  4.8 3.2 2.9 3.3 3.6 
China  3.0 2.8 2.6 3.3 3.2 
Korea,  Rep. of 2.9 2.7 2.1 2.1 2.5 
Germany  4.1 3.9 3.3 3.1 2.4 
Cayman  Islands  2.5 2.3 2.6 2.5 2.3 
Bermuda  2.8 2.3 1.7 1.8 1.6 
Australia  1.2 1.3 1.0 1.2 1.3 
Denmark  1.0 1.0 1.2 1.0 1.2 
France  1.0 1.1 1.1 1.1 1.0 
Chinese  Taipei  0.8 0.6 0.5 0.6 0.6 
Thailand  0.2 0.2 0.2 0.7 0.2 
Other  13.7 12.8 12.5 12.3 11.9 
Source:  Bank Negara Malaysia.  
1.30.  Malaysia remains not only an exporter of goods, but also of capital , with domestic companies 
investing their earnings and savings abroad. As such, there is considerable direct investment abroad 
(DIA) by Malaysian companies. On a balance of payments basis , DIA outflows peaked in  2019 and 
bottomed in 2020 to recover at 81.1% of their 2017 level in 2021 (Table  1.3). DIA outflows were 
lower in 2020 and were mainly channelled into the financial servic es and information and 
communication services subsectors , as well as manufacturing and mining sectors , with Canada, the 
United  Kingdom , and Indonesia being the major recipients. In 2021, DIA outflows were higher and 
mainly channelled into the same activiti es in the Netherlands, Canada , and Indonesia. DIA stock 
declined considerably in  2018 as from when it rose progressively by an overall 3.9% above its 
2017 level in 2021 (Table  1.6). During the review period , it remained concentrated in the services 
sectors  (mainly financial, insurance , and takaful activities) followed by siz eable investments in the 
mining, agricultural , and manufacturing sectors. The bulk was channelled into Singapore, Indonesia, 
the United  Kingdom, and the Cayman  Islands.  
Table 1.6 Stock of direct investment abroad, 2017 -21 
  2017  2018  2019  2020  2021  
Total (MYR  billion – end-period)  526.5  489.0  498.4  515.1  547.0  
 % of GDP  38.4 33.8 32.9 36.3 35.4 
By sector (% of total):  
Agriculture, forestry and fishing  7.8 8.1 8.5 8.7 8.1 
Mining and quarrying  15.6 16.8 15.2 13.1 11.9 
Manufacturing  7.2 7.4 7.3 7.1 9.8 
Construction  2.3 2.2 1.5 1.5 1.8 
Services  67.2 65.6 67.5 69.6 68.4 
 Wholesale and retail trade  2.6 2.6 2.4 2.1 2.1 
 Finance and insurance / takaful activities  35.8 41.3 43.2 44.4 43.2 
 Information and communication  9.0 -0.6 -0.5 0.5 0.4 
 Other services  19.7 22.2 22.4 22.7 22.7 
By partner (% of total):  
Singapore  17.5 19.1 19.5 21.3 20.0 
Indonesia  8.6 9.5 9.5 9.4 9.4 
United  Kingdom  4.9 6.1 6.1 6.5 6.4 
Cayman  Islands  5.7 6.1 7.1 6.6 6.3 
Netherlands  1.1 1.6 2.2 2.2 4.6 
Canada  5.3 2.9 2.6 3.3 4.1 
United  States  1.4 3.7 3.9 3.5 3.6 
Hong Kong,  China  3.2 3.3 3.1 3.0 2.6 
British  Virgin  Islands  3.1 3.0 3.0 2.4 2.4 
China  1.7 2.0 2.0 2.2 2.3 
Thailand  1.8 1.9 2.1 2.2 2.3 
Viet Nam 1.2 1.5 1.8 2.0 2.3 
Cambodia  0.9 1.1 1.2 1.3 1.4 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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    2017  2018  2019  2020  2021  
Chinese  Taipei  1.0 0.4 0.4 0.7 0.8 
Philippines  0.2 0.3 0.4 0.5 0.8 
Germany  1.0 0.8 0.7 0.7 0.7 
Australia  4.7 4.7 2.9 2.1 0.5 
India 3.2 0.3 0.3 0.3 0.4 
United  Arab Emirates  0.2 0.2 0.3 0.2 0.2 
Other  33.3 31.3 30.9 29.6 28.9 
Source:  Bank Negara  Malaysia.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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2  TRADE AND INVESTMENT REGIMES  
2.1  General Framework  
2.1.  The Federal Constitution of Malaysia provides for Malaysia as a federation of 13  states and 
3 federal territories. The Yang di -Pertuan Agong is the Supreme Head of the Federation and acts as 
a constitutional monarch. There are three  branches of government, i.e.  the executive, the 
legislature, and the judiciary. Each state is headed by its own ruler and has similar structures of 
government for non -federal matters. Islam is the relig ion of the Federation , but other religions may 
be practised in peace and harmony in any part of the Federation.  
2.2.  Federal legislative authority is vested in a Parliament comprising the Yang di -Pertuan Agong, 
the House of Representatives, and the House of Sen ate. The House of Representatives comprises 
222 elected members while the House of Senate comprises 70 elected and appointed members. 
Unless dissolved earlier, Parliament continues for five  years from the date of its first meeting and 
then stands dissolved . Once dissolved, a general election must be held within 60  days of the 
dissolution and Parliament shall be summoned to meet on the date not later than 120  days from 
that date. Under the Westminster system adopted by Malaysia, Parliament may also be dissol ved by 
the Yang di -Pertuan Agong upon advice of the Cabinet before the expiry of the life of the legislature, 
or upon request of the Prime Minister should he cease to command the confidence of the majority 
of the members of the House of Representatives.  
2.3.  Dissolution of Parliament does not affect the membership of the House of Senate. Of the  
70 members , 26 are elected by the State Legislative Assembly, 2 for each state (irrespective of size 
or importance) and 4 for the federal territories. The other 44  member s are appointed by the 
Yang di-Pertuan Agong on the advice of the Cabinet and must be persons who have rendered 
distinguished public service or have achieved distinction in the professions, commerce, industry, 
agriculture, cultural activities, or social se rvice, or who are representative of racial minorities or are 
capable of representing the interests of aborigines. A Senator's term of office is three  years. It is 
not affected by the dissolution of Parliament and the term shall not be more than two  terms e ither 
continuously or otherwise.  
2.4.  The powers and authority of Parliament and the state legislatures to make laws are derived 
from the Federal Constitution. It distributes the powers to legislate between Federal Parliament and 
the state legislatures, and the  law-making bodies must operate and act within their own or respective 
spheres of constitutional legislative function and authority prescribed by the Federal Constitution. 
The distribution of legislative powers between the Federation (to be exercised by Pa rliament) and 
the state (to be assumed by the state legislatures) are set out in the Federal List, the State List, the 
Concurrent List, the Supplement to State List for States of Sabah and Sarawak, and the Supplement 
to Concurrent List for States of Sabah and Sarawak in the Ninth Schedule to the Federal Constitution. 
The state legislatures may make laws with respect to any matters not enumerated under any of the 
subject matters in any one of the Legislative Lists.  
2.5.  Treaties and other international legal inst ruments have no legal force in Malaysia until and 
unless they are incorporated into municipal or domestic law. Pursuant to Article  76(1)(a) of the 
Federal Constitution, Parliament may make laws with respect to any matter in the State List but no 
law shall be made for that purpose with respect to any matters of Islamic law or the custom of the 
Malays or to any matters of native law or custom in the States of Sabah and Sarawak. Furthermore, 
no bill for a law for the purpose of implementing any treaty, agreeme nt, or convention between the 
Federation and any other country, or any decision of an international organization of which the 
Federation is a member, for the purpose of promoting uniformity of the laws of two or more states 
or if so requested by the Legisl ative Assembly of any state shall be introduced into either House of 
Parliament until the government of any state concerned has been consulted.  
2.6.  Malaysia's legal system is based mainly on British common law tradition, and all courts take 
cognizance  of federal and state laws. The highest court, the Federal Court, has original, appellate, 
referral , and consultative jurisdiction. The Federal Court has  an exclusive original jurisdiction to 
determine whether a law made by Parliament or the legislature of a state is invalid on the ground s 
that it makes provision with respect to a matter it has no power to legislate and decide disputes on 
any other questio n between states or between the federation and any state. In exercising its 
appellate jurisdiction, the Federal Court hears appeals referred to it by the Court of Appeal, the WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  High Court in Malaya , and the High Court of Sabah and Sarawak. In exercising its referral 
jurisdiction, the Federal Court has the jurisdiction to decide a question that may have arisen in 
another court concerning interpretation or the effect of any provision of the Federal Constitution. 
When the Federal  Court has decided, it shall remi t the case to the other court to be disposed of in 
accordance with the determination. The Federal Court in exercising its consultative jurisdiction shall 
pronounce in open court its opinion on the question referred to it by the Yang di -Pertuan Agong 
regard ing the effect of any provision in the Federal Constitution (which has arisen or appears likely 
to arise). The Court of Appeals has jurisdiction over decisions of High Court and Session Court. 
Matters of Islamic law are decided by Shariah Courts. Native Co urts were established under the law 
of the states of Sabah and Sarawak. They serve as a mechanism for settling disputes concerning 
breach of customary law among the natives in the state.  
2.7.  The executive branch of government consists of the Cabinet of Ministe rs led by the 
Prime  Minister. The Prime Minister is appointed by the Yang di -Pertuan Agong from among the 
members of the House of Representatives (the person who in his judgement is likely to command 
the confidence of the majority of the members of that House). The Yang di -Pertuan Agong on the 
advice of the Prime Minister appoints other Menteri (Ministers) from among the members of either 
House of Parliament. The rest of  the members of the Cabinet are selected from either House of 
Parliament and are collectively responsible to Parliament. The current government, formed on 
21 August  2021, comprises 4 Senior Ministers, 26  ministers , and 38  deputy ministers.  
2.2  Trade Policy For mulation and Objectives  
2.8.  The Twelfth Malaysia Plan , 2021 -2025 (Twelfth  Plan) is transformational and designed to inject 
fundamental reforms to alter the development trajectory of Malaysia. While it is recognized that the 
COVID‑19 pandemic accelerated the ad option of digital technology through its impact on business 
operations and the way people interact, the pandemic also exacerbated socio -economic inequalities 
and disparities. The formulation of the Twelfth  Plan has taken into account the strategy of phased  
reopening of the economy and the eight stimulus packages (amounting to more than 35% of GDP) 
under the National Recovery Plan, introduced in June  2021. The Twelfth  Plan is organized around 
three key themes (resetting the economy; strengthen ing security, well-being , and inclusivity; and 
advancing sustainability), four  catalytic policy enablers (developing talent, accelerat ing innovation 
and technology adoption, enhanc ing connectivity and transport infrastructure, and improv ing public 
service), and 14  "game changers". The development priorities are aligned with the Sustainable 
Development Goals of the 2030  Agenda for Sustainable Development.  
2.9.  Since its establishment in 2009, the Malaysian Anti -Corruption Commission has been 
responsible for combating corruption  through investigation, prevention, and community action. 
Several high -profile scandals in the public sector in recent times exposed weaknesses in procurement 
practices, enforcement, and administration, and seriously eroded public confidence in institution al 
transparency and credibility. The National Anti -Corruption Plan  2019-2023 focuses on 
six dimensions of importance: political governance, public sector administration, public 
procurement, laws and the administration of justice, law enforcement, and corpo rate governance. 
The plan's 17  strategic objectives encompass 115  initiatives to be implemented over the 5  years. 
According to the National Centre for Governance, Integrity and Anti -Corruption ), 29 initiatives had 
been implemented by the end of 2020, notab ly the establishment of a code of ethics for members 
of the administration.  
2.10.  The Ministry of International Trade and Industry (MITI) is responsible for international trade, 
including strategic trade, as well as matters pertaining to investment, productivity , development 
finance, small and medium -sized enterprises  (SMEs) , industry generally, and the specific 
development of the halal, automotive , and steel subsectors. The MITI carries out its functions 
together with associated agencies such as the Malaysian In vestment Development Authority (MIDA), 
the Malaysian External Development Corporation, the Malaysia Productivity Corporation, Malaysian 
Industrial Development Finance, the Malaysia Automotive, Robotics and IOT Institute, the Malaysia 
Steel Institute, SIRIM  Berhad, EXIM Bank, Department of Standards Malaysia, Invest KL, 
Halal Development Corporation, Malaysia Design Council, and National Development Council.  
2.11.  On 31  October  2018, the National Policy on Industry  4.0 (Industry  4WRD) was launched to 
drive the dig ital transformation of the manufacturing and related services sectors by facilitating 
companies to embrace Industry  4.0 technologies in a systematic and comprehensive manner, and 
be smarter and more strongly  driven by people, process , and technology. The p olicy envisions WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Malaysia to be a strategic partner for smart manufacturing and related services in Asia -Pacific, a 
primary destination for high -tech industries, and a total solutions provider for advanced technology. 
Transformation progress is to be monito red through indicators on labour productivity growth (a 
30% increase is targeted), manufacturing's contribution to the economy, the capacity to innovate 
(global innovation index ranking), and the creation of high -skilled jobs. The "enablers" of 
Industry  4WRD involve funding and outcome -based incentives , an enabling ecosystem and efficient 
digital infrastructure , the adoption of Industry  4.0 technologies and processes with regulatory 
support , upskilling and producing future talent , and access to smart techno logies and standards.1 
2.3  Trade Agreements and Arrangements  
2.3.1   WTO  
2.12.  As a strong supporter of multilateral cooperation, Malaysia participates actively in the WTO. 
Over the last two  years, Malaysia has chaired the Committee of Participants on the Expansion of 
Trade in Information Technology Products as well as the Working Groups on Trade and Transfer of 
Technology and Trade, Debt and Finance. Malaysia has joined the Joint Statement I nitiatives on 
electronic commerce, investment facilitation for investment, and micro, small , and medium -sized 
enterprises. For Malaysia, the WTO with its principles of non -discrimination and transparency 
provides stability, security , and predictability to the conduct of trade. Malaysia welcomes the 
outcomes of the 12th Ministerial Conference towards the curbing of harmful fisheries subsidies, 
responding to the COVID ‑19 pandemic, facilitating purchases by the World Food Programme, and 
continuing the moratorium on customs duties on electronic transmissions.  
2.13.  Malaysia is a  strong advocate at the WTO of special and differential treatment, which it sees 
as a fundamental developmental tool that has facilitated its own integration into the global economy. 
Among the priorities in revitalizing the negotiating functions of the WTO , Malaysia considers it 
essential to find a permanent solution to the issue of public stockholding of agricultural commodities. 
Supporting efforts on WTO reform, Malaysia considers an effective dispute settlement mechanism 
critical to ensure equal and impa rtial application of multilateral trade rules.  
2.14.  Malaysia has not been involved in new WTO dispute settlement cases as a respondent 
since 2018. At the request of Malaysia, the WTO established a dispute panel in July  2021 to examine 
EU measures affecting palm  oil and oil palm crop -based biofuels. It has reserved its third -party rights 
in 17 recent cases, namely the United Arab Emirates – Goods, Services and IP Rights , complaint by 
Qatar (DS526); US – Fish Fillets , complaint by Viet  Nam (DS536); US – Steel and Aluminium 
Products , complaints by China (DS544), India (DS547), the European  Union (DS548), Canada 
(DS550), Mexico (DS551), Norway (DS552), the Russian  Federation (DS554), Switzerland (DS556) , 
and Türkiye  (DS564); US – Safeguard Measures on PV Products , complaints by the Republic  of Korea 
(DS545) and China (DS562); Russia – Additional Duties , complaint by the United  States (DS566); 
India – Additional Duties , complaint by the United  States (DS585); EU – Palm Oil , complaint by 
Indonesia (DS593); and Australia  – AD/CVD on Certain Products , complaint by China (DS603).  
2.15.  Malaysia provided notifications on many subjects covered by the WTO framework during the 
review period (Table  A2.1). However, their timeliness could be improved in some areas. In 
agriculture, the m ost recent notifications on domestic support date from August  2022 and 2018, 
covering the periods 2015 and 2012 -14, respectively. Moreover, Malaysia's obligations under 
Article  III:3 of the GATS to notify "any new, or any changes to existing laws, regulati ons or 
administrative guidelines which significantly affect trade in services" remain unfulfilled.  
2.3.2   Regional and preferential agreements  
2.3.2.1   Association of Southeast Asian Nations (ASEAN)  
2.16.  Malaysia forms the ASEAN together with Brunei  Darussalam, Cambodia, Indon esia, 
Lao People's Democratic Republic , Myanmar, Philippines, Singapore, Thailand, and Viet  Nam. ASEAN 
leaders decided to establish the ASEAN Free Trade Area (AFTA) in 1992. The main instrument for 
the reduction and eventual elimination of intra -regional t ariffs was the Common Effective Preferential 
 
1 The entire policy document may be downloaded from the Official Portal of the Ministry of International 
Trade and Industry: https://www.miti.gov.my/index.php/pages/view/industry4WRD?mid=814 .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Tariff (CEPT). AFTA members do not apply a common external tariff to imports from third countries, 
and export duties remain national policy instruments.  
2.17.  ASEAN leaders took regional integration efforts one step further when they decided to 
establish the ASEAN Economic Community (AEC) in 2003, aiming at the free movement of goods, 
services, investment, skilled labour, and liberalized capital flows. The original deadline for the 
creation of the AEC of 2020 was  later pushed forward to 2015. The CEPT scheme was replaced by 
the ASEAN Trade in Goods Agreement (ATIGA) in 2010 with a view to establishing a single market 
and production base. ATIGA consolidated and streamlined rights and obligations, including for the 
modification of concessions and trade remedies, and expanded the scope to full tariff reduction, 
addressing non -tariff measures (such as TBT and SPS) and behind -the-border measures, trade 
facilitation, and transparency.2 ATIGA was amended in January  2019 to simplify rules or origin 
requirements through self -certification by the operators. ASEAN economic ministers agreed to 
upgrade ATIGA in March  2022. The negotiations are expected to commence in 2022. The agreement 
may include new elements such as digital trade in making the agreement modern and relevant to 
cater to business needs.  
2.18.  Trade facilitation is embedded in the AEC Blueprint  2025, and includes the ASEAN 
Self-Certification Scheme; the ASEAN Single Window, which integrates ASEAN member States' 
nationa l single windows to enable exchange of electronic trade documents via a streamlined, 
synchronized submission and processing of data for faster clearance of cargo and release of 
shipments; the ASEAN Trade Repository , bringing together comprehensive national  trade 
repositories of trade and customs legislation and trade -related information (e.g.  rules of origin, 
administrative rulings, lists of authorized economic operators) ; the ASEAN Solutions for 
Investments, Trade and Services (a consultative mechanism to resolve issues encountered by 
enterprises expeditiously); the ASEAN Customs Transit System ; and the ASEAN Trade Facilitation 
Joint Consultative Committee.  
2.19.  The ASEAN Framework Agreement on Services (AFAS) covers horizontal commitments by the 
member States, specific commitments at sector/subsector levels, and lists of MFN exemptions. 
Liberalization has proceeded gradually through the adoption of packages; the last such package 
(10th) was concluded in 2018. Liberalization of financial services and air transpor t is conducted 
through separate packages. In addition, trade in certain professional services is facilitated through 
mutual recognition agreements (MRAs) covering accountancy, medical professionals, dental 
practitioners, engineering services, nursing servi ces, architectural services , and a framework MRA 
for surveying qualifications. The ASEAN Trade in Services Agreement (ATISA), which entered into 
force on 5  April 2021, has become the new legal instrument for further integration of services sectors 
within  ASEAN.  
2.20.  The ASEAN Comprehensive Investment Agreement (ACIA) aims at the creation of a free and 
open investment environment within an integrated economic community through progressive 
liberalization of the investment regimes of the member States. ACIA foresee s progressive 
liberalization of existing investment restrictions in manufacturing, agriculture, fisheries, forestry and 
mining, and services incidental to these sectors. ACIA strengthens investment protection and 
enhances the transparency of laws, regulati ons, and administrative guidelines related to investment. 
Restrictions maintained under the ACIA Reservation Lists may be phased out or eliminated. Three 
protocols to amend ACIA have been adopted since its initial conclusion in 2009, but these 
modification s did not concern measures maintained by Malaysia.  
2.21.  The ASEAN Agreement on Electronic Commerce, signed on 22  January  2019 and in force since 
2 December  2021, is intended to facilitate e -commerce transactions within ASEAN. It includes 
elements such as harmon ized consumer rights and protection laws, a harmonized legal framework 
for online dispute resolution, e -identification and authorization (electronic signature) schemes, and 
a framework for personal data protection.  
 
2 Malaysia includes alcoholic beverages, arms, and weapons (82  tariff lines) on its General Exclusion List 
and applies tariffs ranging from 5% to 20% on certain highly sensitive items (i.e.  rice products), tobacco, and 
tropical fruit (73  tariff lines).  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  2.22.  ASEAN member States have pursued trade li beralization with partners in the region through 
a network of FTAs (Table  2.1). The most recent ASEAN FTA – with Hong  Kong,  China (known as the 
AHKFTA) – was signed in March  2018, and depending on the domestic ratification processes in the 
member States, e ntered into force between June  2019 and February  2021. The AHKFTA comprises 
14 chapters addressing market access liberalization, trade facilitation, rules to promote confidence 
in trade, and cooperation to facilitate trade in the region. Currently, subcomm ittees on rules of origin 
and investment are undertaking work under the built -in agenda in their respective areas.  
Table  2.1 Malaysia's regional (ASEAN) and bilateral FTAs, 2022  
Regional/  
bilateral FTAs  Coverage/principal 
instruments  Implementation 
date 
(by Malaysia)  Further information  
ASEAN Free 
Trade Area  Common Effective 
Preferential Tariff (CEPT) 
Scheme, superseded by the 
ASEAN Trade in Goods 
Agreement (ATIGA).  
ASEAN Framework 
Agreement on Services 
(AFAS).  
ASEAN Trade in Services 
Agreement (ATISA), signed 
on 07/10/2020.  
ASEAN Agreement on the 
Movement of Natural 
Persons, signed on 
19/11/2012.  
ASEAN Compreh ensive 
Investment Agreement 
(ACIA). Three  protocols to 
amend ACIA have been 
signed.  29/03/2012  https://asean.org/asean -trade -in-goods -
agreement -atiga/  
ASEAN – 
Australia, 
New Zealand 
(AANZFTA)  Trade in goods, services, 
investment, movement of 
natural persons, intellectual 
property, competition policy, 
economic cooperation.  01/01/2010  http://aanzfta.asean.org  
https://fta.miti.gov.my/index.php/pages/vi
ew/asean -australia -newzealand  
ASEAN – China 
(ACFTA)  Trade in goods and services, 
investment, early harvest 
programme, dispute 
settlement, e conomic 
cooperation. Protocol to 
upgrade the ACFTA signed 
on 22/11/2015.  2005 (goods)  
2007 (services)   
ASEAN – India Goods and services.  01/01/2010 
(goods)  
01/07/2015 
(services)   
ASEAN – Japan 
(AJCEP)  Goods, and services, 
investment, rules of origin, 
TBT, SPS, dispute 
settlement, economic 
cooperation.  2009 https://fta.miti.gov.my/index.php/pages/vi
ew/asean -japan?mid=36   
ASEAN – Korea 
(AKFTA)  Goods and services . 2007 (goods)  
2009 (services)  https://fta.miti.gov.my/index.php/pages/vi
ew/asean -korea?mid=37  
ASEAN – 
Hong Kong, 
China  
(AHKFTA)  Goods and services, customs 
procedures and trade 
facilitation, intellectual 
property, economic and 
technical cooperation, 
dispute settlement.  13/10/2019  https://asean.org/wp -
content/uploads/2012/05/AHKFTA -
compressed.pdf  
Its annexes: https://asean.org/wp -
content/uploads/2012/05/AHKFTA -annex -
2-11.pdf  and https://asean.org/wp -
content/upload s/2012/05/Annex -8-1-
compressed.pdf  
Investment: https://asean.org/wp -
content/uploads/2012/05/AHKIA.pdf  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Regional/  
bilateral FTAs  Coverage/principal 
instruments  Implementation 
date 
(by Malaysia)  Further information  
Malaysia – 
Australia  Goods and services.  01/01/2013  Malaysia -Australia Free Trade Agreement   
Malaysia – 
Chile Goods.  25/02/2012  MCFTA Agreement  
Malaysia – 
India Goods and services.  01/07/2011  Comprehensiv e Economic Cooperation 
Agreement between the Republic of India 
and Malaysia  
Malaysia – 
Japan  Goods and services.  13/07/2006  MJEPA Agreement  to be read together with 
the Implementing Agreement   
Malaysia – 
New Zealand  Goods and services.  01/08/2010  MNZFTA Agreeme nt 
Malaysia – 
Pakistan  Goods and services.  01/01/2008  MPCEPA Agreement  
Malaysia – 
Türkiye  Goods.  01/08/2015  MTFTA Agreement  
Source:  WTO Secretariat, based on information provided by the authorities.  
2.23.  The ASEAN -Korea FTA (AKFTA) is currently undergoing a joint review study. The final report 
is targeted to be endorsed during the 20th AKFTA -IC Meeting in the second quarter of 2023. 
Regarding the ASEAN -Japan Comprehensive Economic Partnership (AJCEP), the agreement was 
initially limited  to trade in goods, but additional chapters on trade in services, movement of natural 
persons , and investment were agreed in 2016. These chapters were incorporated into AJCEP through 
a First  Protocol, which Malaysia ratified on 5  April 2021, and which ente red into force (for Malaysia) 
on 1 July 2021. Malaysia has been implementing the AJCEP Tariff Reduction Schedule (in HS17) 
since 1  July 2020. Implementation of product -specific rules (also in HS17) under the AJCEP is 
targeted for implementation by 1  March  2023.  
2.24.  Within the ASEAN -India Framework Agreement on Comprehensive Economic Cooperation, the 
parties have agreed to activate a joint committee to make their ASEAN -India Trade in Goods 
Agreement (AITIGA) more user -friendly, simple, and trade facilitative for  businesses. The 
ASEAN -India Trade in Services Agreement and the ASEAN -India Investment Agreement entered into 
force on 1  July 2015. Negotiations to upgrade the AANZFTA have been underway since October  2020 
and are expected to be concluded by the end of 20 22. 
2.3.2.2   Bilateral FTAs  
2.25.  Malaysia has concluded bilateral FTAs that are either stand -alone FTAs (Chile, Pakistan, and 
Türkiye) or complement the ASEAN FTAs with the same partners (Australia, New  Zealand, India, 
and Japan). Although the AANZFTA is the single most  ambitious undertaking made by ASEAN, the 
Malaysia -Australia FTA is also a comprehensive agreement that covers goods, services, investment , 
and economic cooperation , as well as provisions for intellectual property rights, e -commerce, and 
competition policy . No new bilateral FTAs have been concluded since 2018.  
2.26.  Although ASEAN member States and the E uropean  Union have discussed the establishment 
of a region -to-region ASEAN -EU FTA in the past, the joint committee formed to detail the modalities, 
work programme , and timetable paused its work in 2009, and the E uropean  Union moved to pursue 
bilateral FTAs. With Malaysia, the negotiations for an FTA reached an impasse in 2012 as both sides 
had exhausted their negotiating options. Instead, Malaysia and the E uropean  Union concluded an 
Agreement on Partnership and Cooperation in December  2015. Negotiations with European Free 
Trade Association (EFTA) countries for a partnership agreement were initiated in 2012, and the last 
round of negotiations (1 3th) was held in Octob er 2022.   
2.3.3   Other agreements and arrangements  
2.3.3.1   Regional Comprehensive Economic Partnership (RCEP) Agreement  
2.27.  The RCEP Agreement, which entered into force on 1  January  2022 for most of the participants, 
broadens and deepens the engagement between the 10  member States of ASEAN and five of its FTA 
partners (Australia, China, the Republic  of Korea, Japan, and New  Zealand). The 20  chapters of the 
RCEP Agreement include areas not covered in the existing ASEAN FTAs with its partners such as 
government procurement. Amo ng the key elements of the trade in goods chapter (Chapter  2) are WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  reduction and elimination of customs duties, duty -free temporary admission, general elimination of 
quantitative restrictions, and enhanced transparency in the application of non -tariff measu res, 
import licensing procedures, and fees and formalities.  
2.28.  Provisions on reasonability, objectivity , and impartiality of domestic regulations in the trade 
in services chapter (Chapter  8) go beyond the existing FTAs. The general removal of restrictive and 
discriminatory measures is combined with a negative list approach for the scheduling of services 
commitments. Specific annexes on financial services, telecommunication services, and professional 
services govern the further liberalization of these sectors. Chapter  9 of the RCEP Agreement is 
designed to facilitate the temporary entry and stay of natural persons engaged in trade in goods or 
services, or investment activity.  
2.29.  The investment chapter, which is based on four pillars (protection, liberalization, pro motion, 
and facilitation) , also addresses investor aftercare, e.g.  assistance in resolving complaints and 
grievances, and sets up a work programme on investor -state dispute settlement provisions. The 
provisions relating to intellectual property rights go beyond the WTO TRIPS  Agreem ent, notably with 
respect to technological protection measures and enforcement in a digital environment, with 
appropriate criminal procedures and penalties to be applied to unauthorized commercial -scale 
copying of cinematographic works. Procedures for the establishment of certain intellectual 
property  rights are aligned and streamlined, for example in regard of electronic filing of applications 
and online availability of relevant information.  
2.30.  Regarding electronic commerce, the parties have agreed to adopt o r maintain a legal 
framework that constitutes a conducive environment for e -commerce, including the protection of 
consumer rights and protection of user information. Data -related issues, such as the location of 
computing facilities and electronic cross -border transfer of information, are also addressed. Other 
areas specifically covered in the RCEP Agreement include customs procedures and trade facilitation, 
rules of origin, TBT and SPS matters, trade remedies, competition policy, SMEs, government 
procuremen t, and economic and technical cooperation.  
2.31.  For Malaysia, participation in RCEP mainly involved revision of its IP laws governing patents, 
copyright, and geographical indications. Parliament amended the three laws in December  2021, 
which paved the way for M alaysia's deposit of its instrument of ratification with the ASEAN  
Secretariat in January  2022. The RCEP Agreement entered into force for Malaysia on 18  March  2022.  
2.3.3.2   Comprehensive and Progressive Agreement for Trans -Pacific Partnership 
(CPTPP)  
2.32.  The CPTPP is a separate treaty that incorporates, by reference, the provisions of the original 
Trans -Pacific Partnership (TPP) Agreement. Certain provisions of the TPP remain suspended until the 
CPTPP partners agree, by consensus, to remove their reservations. Malaysia  was among the 
11 countries that signed the CPTPP in March  2018, and it has concluded bilateral arrangements (side 
letters) with some its partners in the context of the CPTPP. Malaysia submitted its instrument of 
ratification to New  Zealand (the CPTPP's de positary) on 30  September  2022. Malaysia was the 
ninth signatory to ratify the CPTPP, and the Agreement officially took effect for Malaysia 
on 29 November  2022.  
2.3.3.3   Indo -Pacific Economic Framework (IPEF)  
2.33.  Although the stated purpose is not to create an FTA, the  negotiations launched on 
23 May 2022 to establish the IPEF are to address fair and resilient trade; supply chain resilience; 
clean energy, decarbonization , and infrastructure; and tax and anti -corruption. Malaysia has taken 
the position to participate in all the pillars. The IPEF Ministerial meeting held on 8 -9 September  2022 
concluded and adopted ministerial statements for all the pillars. The next phase of the framework is 
to negotiate the agreements for each pillar.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  2.3.3.4   Other arrangements  
2.34.  Malaysian exporters are eligible for GSP treatment in Norway, Switzerland , and Liechtenstein.3 
Malaysia is a signatory to the Global System of Trade Preferences among Developing Countries, 
under which it grants a 10%  preferential tariff for certain woven fabrics made of man -made fibres.  
2.35.  As a member of the Asia -Pacific Economic Cooperation ( APEC), in respect of achieving free 
and open investment by 2020 through reduction in trade barriers and promotion of free flow of 
goods, services, and capital (the Bogor  Goals), Malaysia submitted its Individual Action Plan for 2018 
as well as the final review of the Bogor Goals in 2020.4 During Malaysia's tenure as host in 2020, 
APEC Ministers issued a declaration to ensure the openness of the supply chain for essential  goods 
during the pandemic, and Malaysia participated in a survey that led to a report on non -tariff 
measures on essential goods during the COVID ‑19 pandemic in the APEC region.5 
2.36.  The APEC Economic Committee oversees structural reforms in six areas: compet ition policy, 
regulatory reform, ease of doing business, strengthening economic and legal infrastructure, public 
sector governance, and corporate law governance. Under the Enhanced APEC Agenda for Structural 
Reform  2021-2025, Malaysia holds several leaders hip roles in the Economic Committee, notably on 
regulatory reform, and it is the "Champion Economy" for resolving insolvency under the Third APEC 
Ease of Doing Business Action Plan 2020 -2025.6 Malaysia has led capacity -building programmes on 
regulatory po licy development, good regulatory practice, and crowdfunding between 2018 and 2022. 
Malaysia has submitted its Timber Legality Guidance Documents to the APEC Experts Group on Illegal 
Logging and Associated Trade. These documents serve to promote trade in l egally harvested forest 
products in the APEC region.  
2.4  Investment Regime  
2.37.  The Special Task Force to Facilitate Business (PEMUDAH) was established in February  2007 
to improve public service delivery to the business community. The process for setting up a busin ess 
was examined by a technical working group under PEMUDAH. Entrepreneurs wishing to start a 
business have first to register with the Companies Commission of Malaysia (SSM). Registration may 
be in the form of sole proprietorship or partnership under the R egistration of Business Act  1956 
(Act 197); company (limited or unlimited liability, private or public) under the Companies Act  2016 
(Act 777); or limited liability partnership under the Limited Liability Partnerships Act  2012. Changes 
to the particulars o f a business (e.g.  type, ownership, address) and a company (e.g.  director, 
company secretary, address) should be notified within 30  days and 14  days, respectively. As at the 
end of 2020, the SSM had registered just under eight million businesses, mainly so le proprietorships. 
Nearly 44,000  new companies (20 of them foreign) were incorporated during 2020, bringing the 
total number of registered companies to nearly 1.4  million.  
2.38.  The stakeholders involved in the establishment of a business are the SSM (general l icence 
covering registration of a company), the Royal Malaysian Customs Department and the Inland 
Revenue Board (tax registration), the Employees Provident Fund, the Social Security Organization, 
and the Human Resources Development Fund. In addition, busin ess premise/signboard licences are 
delivered by the responsible state authority.  
2.39.  Malaysia uses the World Competitiveness Yearbook (WCY) of the International Institute for 
Management Development to measure indicators for starting a business. The WCY measure s the 
number of procedures, time, cost , and paid -in minimum capital requirement for a small to 
medium -size limited liability company to start up and formally operate in each economy's largest 
 
3 Malaysia graduated from the GSP schemes of the Russian  Federation, Belarus, and Kazakhstan on 
21 October  2021, and Japan on 1  April 2019. ASEAN member States graduated from the G SP donor schemes 
of the European  Union and Türkiye on 1  January  2014.  
4 The reports may be downloaded from: APEC, Assessment of Achievements of the Bogor Goals in 2018 . 
Viewed at: https://www.apec.org/about -us/about -apec/achievements -and-benefits/2018 -bogor -goals; and 
https://www.apec.org/about -us/about -apec/achiev ements -and-benefits/bogor -goals.  
5 APEC (2021), Non-Tariff Measures (NTMs) on Essential Goods during COVID -19 in the APEC Region . 
The report may be downloaded from: https://www.apec.org/publications/2021/04/non -tariff-measures -on-
essential -goods -during -covid-19-in-the-apec-region . 
6 The wor kplan on regulatory reform prepared by Malaysia may be accessed at: 
http://mddb.apec.org/Documents/2022/EC/EC1/22_ec1_015.pdf .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  business city. Malaysia's indicators in the WCY are start -up pro cedures (ranked 53rd among 
63 economies in  2020) and start -up days (50th out of 63  economies).  
2.40.  The MalaysiaBiz Portal was launched in December  2020 and is currently managed by 
SME Corporation  Malaysia, an agency under the Ministry of Entrepreneur and Cooperative  
Development  (MECD). This Portal acts as a one -stop centre for business registration and licensing 
to improve ease of doing business and to encourage formation of new businesses. To dat e, 
information regarding nearly 3,000  licensing or registration requirements have been uploaded onto 
the Portal. Covering the requirements at federal, state , or local authority levels of 6  registration 
bodies and 518  licensing authorities encompasses 1,174  business activities. Among these, 
6 registration bodies and 66  licensing authorities have been integrated through the Portal.  
2.41.  Commencing 1  March  2018, the SSM made mandatory the lodgement of annual returns, 
unaudited financial statements , and the certific ate relating to exempt private companies through the 
Malaysian Business Reporting System (MBRS). However, the lodgement  of audited financial 
statements and reports via the MBRS remains voluntary for the time being.  
2.42.  The SME Corporation Malaysia was establis hed under the Small Medium Enterprises Act  1995 
(Act 593) as a single dedicated agency to formulate policies and strategies towards SMEs and to 
work as a coordinator of programmes across ministries and agencies. SME programmes include 
access to financing, human capital development, market access, innovation and adoption of 
technology, and infrastructure. Under the Business Accelerator Programme  2.0, SMEs may apply for 
grants (50/50 basis) and soft loans provided in collaboration with the SME Bank and Bank R akyat.  
2.43.  MIDA is the principal agency overseeing and driving investment into manufacturing and 
selected industries in the services sector in Malaysia. Within MIDA, an Advisory Services Centre that 
includes representatives of various government agencies and d epartments assists investors, and the 
Project Acceleration and Coordination Unit facilitates projects that have been approved by the 
National Committee on Investment (NCI). On 8  May 2019, the NCI was approved as the sole 
approving committee for incentives in accordance with the government decision to centralize all 
assessment and approval of investment packages relating to tax incentives and grants art the 
national level. MIDA has launched several digital applications to ease approval processes, including 
the e-Manufacturing Licence  2.0 (e -ML 2.0) platform that enables licences to be issued within 
two business days for non -sensitive industries,  the e-Incentive  2.0 module according import duty 
and sales tax exemptions for raw materials,  components, machinery,  and equipment. The 
InvestMalaysia  portal ( https://investmalaysia.mida.gov.my/EIP/InvestMalaysia.aspx ) guides 
investors towards these and other services.  
2.44.  The Promotion of Investment s Act  1986 and the respective tax laws offer incentives for 
investment in the form of partial or full relief of direct or indirect taxation (Section  3.3.1). 
Information about investment incentives offered by the Federal Government such as tax exemptions, 
grants, soft loans, equity funding, training, and regional establishment status may be accessed 
through MIDA's i -Incentives portal ( https://incentives.mida.gov.my ). These incentives are offered 
to domestic and foreign investors alike.  
2.45.  The Cabinet approved a programme for comprehensive reform of Malaysia's investment 
agenda on 21  April 2021. The National Investment Aspirations (NIA) programme seeks to attract 
high-quality investments that create high -income jobs and emphasizes the fostering of a robust and 
dynamic tax and incentives regime, building a talent pool in close collaboration with the relevant 
industries, improved regulatory and licensing frameworks, and augmenting facilitation elements 
such as customs p rocedures. The NIA has six thrusts: a unified investment strategy to laser -focused 
delivery, agile and forward -looking incentive packages, clear roles and responsibilities for a simplified 
investor journey, an accelerated innovation system, a vibrant talen t pool meeting the needs of the 
labour market, and improved ease of doing business.7 
2.46.  In general, Malaysia welcomes foreign investment, and there are 61  Investment Guarantee 
Agreements in force that are  intended to provide reciprocal protection against nat ionalization and  
expropriation, guarantee prompt and adequate compensation in case of 
nationalization/expropriation, ensure free transfer of profits and capital, and allow for arbitration of 
 
7 MITI, National Investment Aspirations, Overview . Viewed at: 
https://www.miti.gov.my/NIA/overview.html .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  investment disputes under the Convention on the Settlement of Inv estment Disputes (which 
Malaysia joined in 1966). Investors may also resort to the United  Nations Commission on 
International Trade Law (UNCITRAL), the Asian International Arbitration Centre, or other fora for 
arbitration or adjudication.  
2.47.  Foreign investmen t is not regulated by general legislation, regulations , or guidelines in 
Malaysia. Limitations, to the extent that they exist, are sector -specific and upheld by the supervisory 
authorities for the sectors in question. Some regulatory agencies may have absolute discretion in 
rejecting or approving transactions.  Restrictions may take the form of equity caps and/or local 
representation requirements such as membership on the board of directors or the hiring of Malaysian 
workers. For example, companies that provide transportation services to third parties in Peninsu lar 
Malaysia must obtain a Carrier Licence A from the Land Public Transport Agency (APAD) under the 
Ministry of Transport, and APAD is required to ensure that the company has minimum 51% Malaysian 
equity, of which  30% must be in indigenous (Bumiputera) own ership.  
2.48.  Since June  2003, foreign investors have been allowed 100% ownership in new projects in the 
manufacturing sector, as well as investments in expansion or diversification projects by existing 
companies, irrespective of the level of exports and without  excluding any product or activity. Some 
45 services subsectors were liberalized in 2009, and foreign investment restrictions have 
subsequently been removed for unit trust management companies (2014), quantity surveying 
services (2016), credit rating agenc ies (2017), and investment banks. Restrictions or limitations on 
foreign ownership remain in education, communication and multimedia, freight forwarding and 
shipping, financial services, and oil and gas.  
2.49.  Policies to encourage Bumiputera ownership have been  in place for decades, but there is no 
exhaustive or indicative list of Bumiputera requirements that affect foreign direct investment. 
Approval must be sought if an acquisition leads to dilution of Bumiputera or government agency 
ownership, which may not b e less than 30% of the equity or MYR  250,000 in paid -up capital. Joint 
ventures between Malaysian and foreign investors are encouraged, particularly for the bidding on 
government procurement contracts.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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3  TRADE POLICIES AND PRACTICES BY ME ASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.  The Customs Act  1967 provides the main framework for customs procedures. The Act was 
amended several times during the review period, mainly to meet the needs of industry, facilitate 
trade, and enhance transparency.1 The changes pertain, inter alia, to provisions governing customs 
rulings, duty payments and refunds, duty drawback, enhanced powers of customs officers, the 
regulation of transit and transhipment, pen alties for customs offences related to non -compliance, 
and origin of goods (Table  3.1). 
Table 3.1 Main amendments to the Customs Act, 2017 -22 
Part/section in the Act  Overview  
Public ruling  
(Part IIA, Section  10F) The Director General of Customs is authorized to make a public ruling on the 
application of any provision under the Customs Act.  
Refund of duty or other 
charges overpaid or 
erroneously paid  
(Part III, Section  16) The amendment imposes a one-year timeline to submit a claim for refund of 
customs duties paid under protest or appeals of decisions of the Director 
General or the Customs Appeal Tribunal (counting from the date a decision on 
classification, valuation, verification of origin, revi ew or appeal is made known 
to the claimant).  
Payment of duty etc., 
underpaid or erroneously 
refunded  
(Part III, Section  17) The timeline that the Royal Malaysian Customs Department may demand for 
settlement of erroneously refunded or underpaid duties is e xtended from 
three  to six  years.  
Transit and transhipment  
(Part IVA) The amendment introduces, inter alia, detailed procedures on transit and 
transhipment activities, necessary measures to safeguard against any 
unauthorized interference with goods, the r equirements for the owner of the 
goods to pay duties in case of termination of transit and transhipment 
procedures, and hefty penalties for non -compliance with the procedures.  
Conditions under which 
drawback may be paid  
(Part X, Section  93) Drawback duty may be claimed on imported goods to be re -exported. Changes 
include raising the minimum amount for eligibility to MYR  200 (from MYR  50) 
and shortening the timeline for goods to be re -exported from 12 to 3  months 
from the date on which customs duty is paid.   
Offsetting of drawback or 
refund against amount 
owed  
(Part X, Section  99A) Customs is authorized to offset any amount of drawback or refund due to a 
person against any unpaid customs duty, excise duty, sales tax, service tax, 
Goods and Services Tax ( GST), etc.  
Origin of goods, and 
preferential and 
non-preferential tariff 
treatm ent 
(Part XA) A new chapter on origin of goods deals with various issues covering the 
appointment of a government agency to issue preferential or non -preferential 
certificate of origins; application for a certificate of origin, responsibility of 
importer, producer, or exporter; and the eligibility for preferential tariff 
treatment; verification of documents and information related to origin of 
goods, among others. A customs ruling may be sought on matters relating to 
the origin of goods under the public rul ing (Part  IIA, Section  10F).  
Records relating to 
customs matters  
(Part XI, Section  100A)  The amendment provides a list of items to be kept for seven years (six years 
under old provisions), including all payments and bank records; all accounting, 
managemen t, and financial records; inventory records; and sales, distribution, 
and royalty contracts or agreements. Any person shall keep full and true 
records of all the transactions on any matters under the Act.  
Power to intercept 
communications  
(Part XII, Secti on 111C)  The Public Prosecutor may authorize customs officers to intercept 
communications such as postal shipments, messages, and conversations 
through telecommunications that may be relevant for investigations of any 
offence under the Act.  
Compounding of  offences 
(Part XIII, Section  131) The amendment provides for the issuance of regulations setting out the 
offences to be compounded, and criteria, methods, and procedures for the 
compounding of offences.  
 
1 The Customs Act  1967 as at 1  June 2021 incorporates the Customs (Amendment) Act  2018, the 
Customs (Amendment) (No.  2) Act  2018, and the Customs (Amendment) Act  2019.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Part/section in the Act  Overview  
Offences and penalties 
(Part XIV) Several changes have been made to the penalties applicable for a range of 
customs violations, including illegal/incorrect declarations and documents for 
customs procedures; offences related to damages, destruction or manipulation 
of data stored in computers; illeg al claims for drawback; unlawful claims for 
refund; and smuggling.  
Pangkor (Part  XIXD)  Pangkor is a new duty -free island. Part  XIXD stipulates the appropriate 
customs treatment of goods transported to or from Pangkor or the principal 
customs area.  
Source:  Compiled by the WTO Secretariat, based on the Customs Act  1967 (as at 1  June 2021); Asia 
Business Law Journal  (2019), " Malaysian Customs Act Revamp Affects Businesses ", 18 September. 
Viewed at: https://law.asia/malaysian -customs -act-affects -businesses/ ; and information provided by 
the authorities.  
3.2.  The Royal Malaysian Customs Department (RMCD) is responsible for enforcing import 
procedures, while other government agencies such  as the Ministries of International Trade and 
Industry (MITI) and Health (MOH) may issue import licences. All imports are subject to declarations 
made by customs agents, authorized economic operators (AEO), or direct users. The declarations 
should be accom panied by commercial invoices, bills of lading, packing lists, and approval documents 
(where applicable).2 Malaysia does not maintain any laws or regulations that mandate pre -shipment 
inspection of any goods.3 
3.3.  Customs procedures have been fully automated  since 2007. Import declarations are processed 
electronically (eDeclare) for the assessment and payment of duties, and customs release. Most 
import licences are paperless, and they may be attached electronically to the customs declarations.4 
Customs has n o facility to enable electronic submission of other supporting documents (e.g.  invoice, 
bill of lading) with the import/export declaration.  
3.4.  Malaysia ratified the WTO  Agreement on Trade Facilitation (TFA) on 26  May 2015.5 Malaysia 
implemented all categorie s, including Articles  7.8 and 11.9 of the TFA, on 1  June 2021.6 It is a party 
to the World Customs Organization Revised Conve ntion on the Simplification and Harmonization of 
Customs Procedure (Revised Kyoto Convention).  
3.5.  Malaysia continues to streamline cu stoms procedures and facilitate trade through its National 
Single Window (NSW) launched in 2009. All documents required for regulatory trade processes can 
be submitted through the NSW (myTRADELINK) operated by Dagang  Net. Hard copies of supporting 
document s need only be presented by traders, as requested.7 The system links traders with the 
relevant government agencies and other trade and logistics operators to simplify clearance 
procedures and facilitate the exchange of trade data.8 According to the autho rities, the RMCD uses 
the Time Release Study (TRS) analysis continuously to improve customs clearance procedure. A 
TRS report should be available by the end of 2022.  
3.6.  The AEO  programme continues to play an important role in securing and facilitating trade, as 
well as in increasing operational efficiency. The Government announced in the 2021 budget speech 
that it would simplify the AEO accreditation process and broaden the AEO programme to include 
logistics services providers and approved warehouse operators.9 As of 31  August  2022, there 
were 114 AEOs in Malaysia, up from 94 AEOs in 2021.10 
3.7.  At the regional level, Malaysia is pursuing several initiatives to facilitate trade together with 
other ASEAN members, notably the ASEAN Single Window (ASW), the ASEAN -wide Self -Certification 
 
2 RMCD, Import Procedure . Viewed at: http://www.customs.gov.my/en/cp/Pages/cp_iimp.aspx .  
3 Malaysia National Trade Depository, Pre-Shipment Inspection and Other Forma lities. Viewed at: 
http://mytraderepository.customs.gov.my/en/ntm/psi/Pages/psi.aspx .  
4 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
5 WTO document WT/PCTF/N/MYS/1, 23  July 2014.  
6 WTO document G/TFA/N/MYS/1/Add.2, 9  August  2021. Malaysia designated all provisions in 
Articles  1-12 of the Agreement under Category  A, except for Article  7.8 (Expedited Shipments) and Article  11.9 
(Advance Filing and Processing of Transit Documentation and Data Prior to the Arrival of Goods).  
7 myTRADELINK, eDeclare . Viewed at: https://www.mytradelink.gov.my/web/guest/edeclareinfo . 
8 Dagang  Net, NSW for Trade Facilitation . Viewed at: http://www.dagangnet.com/trade -
facilitation/national -single -window/ .  
9 Ministry of Finance of Malaysia, Budget  2021 Speech, p.  38. 
10 Information provided by the authorities.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Scheme (AWSC), and the ASEAN Customs Transit System (ACTS). The ASW integrates each 
member's NSW and allows the electronic exchange of trade documen ts. By the end of 2019, all 
10 ASEAN members were connected through the ASW network.11 The ASW currently supports the 
exchange of intra -ASEAN certificates of origin (ASEAN Trade in Goods Agreement (ATIGA) Form  D) 
for preferential tariff treatment. Malaysia  has issued e -Form D since 18  March  2020.12 Paper -based 
Form D will only be issued if there are any technical issues that cannot be resolved promptly. The 
authorities note that the COVID -19 pandemic catalysed Malaysia's 100% issuance of e -ATIGA 
Form D in o rder to encourage faster and contactless service delivery in facilitating intra -ASEAN trade 
and business. The AWSC is fully operational in Malaysia since 20  September  2020.13 Under the 
scheme, certified exporters, who demonstrate their competence to comply  with ATIGA Rules of 
Origin requirements14, may self -declare the country of origin for their goods in certain commercial 
documents (e.g.  invoice, bill of lading) for ATIGA tariff preferential claims, instead of applying for a 
paper -based Certificate of Ori gin (Form  D) or e -Form D.15 As at 22  August  2022, there were 
193 Certified Exporters (CE) registered in Malaysia.16 
3.8.  Concerning the cross -border transit movement of goods via land within the ASEAN, the ACTS 
was launched on 2  November  2020, immediately opera tional in Malaysia.17 The purpose of the ACTS 
is to increase the efficiency of moving goods across land transport routes, reduce transaction costs 
and movement time for the trading community, and improve the prevention and detection of 
smuggling and fraud.18 The system facilitates free transit of goods within the region and allows 
traders to make a single electronic customs declaration. Each participating ASEAN member State 
may track the status and movement of goods using a regional computerized customs tra nsit 
management system. All traders are eligible to use the system, but must first register as transit 
trader with the Customs Administration of the participating member  State (i.e.  to become an 
Authorised Transit Trader).19 According to the authorities, n o trader was given the status of 
Authorised Transit Traders as at October  2022.  
3.9.  Concerning Malaysia's appeals system, under the current provisions in the Customs Act  1967, 
any person aggrieved by the decision of the Director General of Customs may apply fo r a review of 
the decision within 30 days from the date of notification of the decision, provided that the appeal of 
the same decision has not been made to the Customs Appeal Tribunal (CAT). Upon such application, 
the Director General of Customs shall carr y out the review, where practicable, within 60  days from 
the date the application is received. The current provisions also allow any person aggrieved by the 
decision resulting from the review to file an appeal to CAT within 30  days from the date of notific ation 
of the said decision in writing. There were 460 appeals to CAT from 2018 to September  2022 and 
1,672 applications for review from 2020 to September  2022.20 
3.10.  Smuggling remains a concern and is related to, inter alia, duties and tax evasion, 
circumventi on of prohibitions.21 As noted earlier, the amendments introduced hefty penalties for 
smuggling offences, for example in relation to cigarettes containing tobacco and intoxicating liquor.22 
Information regarding value of seized goods is confidential and th erefore not publicly available.  
 
11 MITI, " ASEAN Single Window (ASW) Under ASEAN Trade in Goods Agreement (ATIGA) ". The ASW 
initially became operational on 1  January  2018 with five  members, i.e.  Indonesia, Malaysia, Singapore, 
Thailand, and Viet  Nam.  
12 MITI, " ASEAN Single Window (ASW) Under ASEAN Trade in Goods Agreement (ATIGA) ".  
13 MITI, Preferential Certificate of Origin (PCO) . Viewed at: 
https://www.miti.gov.my/index.php/pages/view/3911 . The First Protocol to amend the ATIGA to i nclude the 
AWSC was signed on 22  January  2019.  
14 Requirements to become a certified exporter are described at the MITI website related to preferential 
certificates of origin. Viewed at: https://www.miti.gov.my/index.php/pages/view/3911 .  
15 MITI, Preferential Certificate of Origin (PCO) .  
16 Information provided by the authorities.  
17 Malaysia participated in the pilot stage of the ACTS from November  2016 to April  2017.  
18 ASEAN, ASEAN Customs T ransit System . Viewed at: https://acts.asean.org/acts .  
19 ASEAN, ASEAN Customs Transit System .  
20 Information provided by the authorities.  
21 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
22 Customs Act  1967 (as at 1  June 2021), Part  XVI, Section  135. WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  3.1.1.1   Customs valuation  
3.11.  There have been no significant changes to the Customs (Rules of Valuation) Regulations  1999 
since the previous Review. Malaysia's customs valuation rules follow the hierarchy of valuation 
methods laid down in the WTO  Agreement on Implementation of Article  VII of the GATT  1994 as 
they stipulate the transaction value (based on the c.i.f. price) as the principal basis for the valuation 
for imported goods. If this method cannot be used, the Customs Regulations o utline the alternative 
valuation methods, i.e. the transaction value of identical or similar goods, the deductive value, the 
computed value, or other valuation methods.23 
3.12.  Section  12 of the Customs Act authorizes the Minister of Finance to fix the value of any 
dutiable goods by notification in Federal Government Gazette . In this capacity, the Minister acts 
upon recommendations of the Customs Valuation Management Section.24 The measure has been 
applied to completely built -up (CBU) motor vehicles (new or used)  imported by open Approved 
Permit (AP) holders, ostensibly to combat under -invoicing.25 However, according to the authorities, 
effective from March  2020, the Minister of Finance stopped exercising his power under Section  12 of 
Customs  Act on the CBU motor vehicles. The newly imported CBU (New) and CBU (Used) vehicles 
are now processed using the WTO valuation method.26 
3.1.2   Rules of origin  
3.13.  Malaysia has not established non -preferential rules of origin. Preferential rules apply to 
imports under preferential trading arrangements and FTAs. As noted earlier, the amendments to the 
Customs Act set out pro visions that regulate various aspects of origin of goods, as well as 
non-preferential and preferential tariff treatment. All Malaysia's FTAs contain preferential rules of 
origin of varying complexity. In general, the rules stipulate as stand alone or in co mbination the 
(i) wholly obtained or produced criterion for natural products; and/or (ii)  the substantial 
transformation criterion based on value added, change in tariff classification at the HS  2-, 4- or 
6-digit level (tariff -shift rule), or specific proc essing requirements that must be fulfilled for a product 
to be considered an originating good.  
3.1.3   Tariffs  
3.1.3.1   Bound rates  
3.14.  According to Schedule XXXIX, Malaysia has bound approximately 80% of its MFN tariff lines.27 
The majority of the lines (72.2%) are bound at ad valorem  rates ranging from 2% to 168%. 
About  4.5% of all tariff lines are bound at zero. The simple average ad valorem  bound tariff 
is 15.6%, 10.9% for agricultural products, and 16.5% for non -agricultural  products 
(WTO  definition).28 Non-ad valorem  rates primarily concern preparations of vegetables, fruit, and 
nuts; edible fruits and nuts; edible vegetables; alcoholic beverages; and sugar. Some 20% of 
Malaysia's tariff lines remain unbound, mainly items of  iron and steel, organic chemicals, plastics 
and articles thereof, machinery and parts thereof, and motor vehicles. On all tariff lines where 
Malaysia has bound the import duty, it has also bound other duties and charges (ODCs) within in 
the meaning of Art icle II.1(b) of the GATT at zero. ODCs are unbound when the import tariff is 
unbound.  
 
23 Customs (Rules of Valuation) Regulation  1999.  
24 Customs (Rules of Valuation) Regulation  1999, Regulation 11.  
25 The most recent values for new and used CBU imported motor vehicles  were publish ed in the Federal 
Government Gazette on 6  August  2020.  
26 The power of the officer to value the goods is under Section  13 of the Customs Act  1967. Methods 
used to determine the value for imported goods as per the Customs (Rules of Valuation) Regulations  1999 
conferred by subsections  142 (35b) of Customs Act  1967.  
27 The Secretariat's calculations reported here are based on Malaysia's Schedule  XXXIX at the national 
tariff line level in the HS  2002 nomenclature extracted from the WTO CTS database. However, it may be worth 
noting that Malaysia's binding coverage is estimated at 84.3% at the six -digit level according to the World 
Tariff Profile  2021. Viewed at: https://www.wto.org/ english/res_e/booksp_e/tariff_profiles21_e.pdf .  
28 Ad valorem  equivalents (AVEs) of non -ad valorem  rates have not been included due to 
HS nomenclature differences.  Bound in -quota TRQ rates have also been excluded, while the  ad valorem 
components of compoun d and alternate rates have been taken into consideration in the calculations.   WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  3.1.3.2   Applied MFN rates  
3.15.  Under Part  III (11) of the Customs Act  1967, Malaysia levies import duties on goods in 
accordance with the Customs Duties Order  2022.29 The applied tari ff is reviewed annually as part of 
the national budget process. The authorities and the business community engage regularly in 
dialogues that include discussions about the tariff structure and tariff rates.30 The RMCD maintains 
a public online database, JK DM HS Explorer, that contains information about applied MFN and 
preferential duties and other relevant charges.31 Malaysia continues to submit its applied tariff (MFN 
rates only) regularly to the WTO Integrated Database.  
3.16.  Overall, the tariff structure has r emained unaltered since the previous Review. The 2022 
applied tariff  is based on HS22. It comprises 11,435 tariff lines (excluding in -quota tariff lines) at 
the 10 -digit level, of which 99% carry ad valorem  rates (Chart  3.1). About 74.3% of all tariff line s 
face ad valorem  rates of 10% or less, as more than 50% the tariff lines are duty -free on an MFN 
basis. Non -ad valorem  duties affect 119 tariff lines – mainly agricultural products such as edible 
fruits, alcoholic beverages, and tobacco – and involve cons iderable tariff protection in some 
instances. The AVEs the Secretariat was able to estimate ranged from 4.4% to 452.8% (on 
flue-cured Virginia -type tobacco) and exceeded 50% on nearly one quarter of the estimated tariff 
lines.32 
Chart 3.1 Tariff distribution by type and rate of duty, 2022  
 
Note:  The MFN tariff rate presentation highlights the main applied rates. A modest number of tariff lines 
(0.1%) are subject to other rates (e.g.  2%, 3%, 17%, and 18%). Figures above the bars refer to 
the percentage of total lines.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
3.17.  Malaysia's applied rates (excluding AVEs) fell slightly from 2017 to 2022 (Table  3.2). This was 
mainly due to im plementation of tariff cuts on products covered by the expansion of the Information 
Technology Agreement. The inclusion of AVEs in the 2022 tariff analysis, which raises the simple 
average applied MFN rate from 7.1% to 7.6%, mainly affects agriculture (3.5 % vs. 7.0%) due to 
high AVEs on certain alcoholic beverages and tobacco (Chart  3.2). 
 
29 Federal Government Gazette, Customs Duties Order 2022 (P.U.(A)  114), 15 April 2022.  
30 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
31 RMCD, JKDM HS Explorer . Viewed at: http://mysstext.customs.gov.my/tariff/home .  
32 The Secretariat used import data provided by the authorities to compare the specific rates in the 2022 
applied tariff with average import values using 2020 trade data (at the 10 -digit level). AVEs could not be 
calculated for slightly more than one third of the tariff lines due to lack of imports, insufficient volume data to 
estimate reliable unit values, etc. Beyond the tariff peak, estimated AVEs are also hi gh for certain other 
tobacco goods (206.3% to 321.8%).  
WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 3.2 Malaysia's tariff structure, 2017 and 2022  
 
2017  2022  2022 including  
AVEs  
Simple average rate (%)  7.5 7.1 7.6 
 HS 01 -24 2.7 2.8 5.5 
 HS 25 -97 8.3 7.9 7.9 
 WTO agricultural products  3.3 3.5 7.0 
 WTO non -agricultural products  8.0 7.6 7.6 
Duty-free tariff lines (% of all tariff lines)  56.2 57.4 57.4 
Simple average of dutiable lines only  17.2 16.9 17.8 
Tariff quotas (% of all tariff lines)  0.2 0.2 0.2 
Non-ad valorem  tariffs (% of all tariff lines)  1.0 1.0 1.0 
Domestic tariff "peaks" (% of all tariff lines)a 13.9 12.6 13.1 
International tariff "peaks" (% of all tariff lines)b 20.7 19.8 20.4 
Nuisance applied rates (% of all tariff lines)c 0.03 0.03 0.03 
Coefficient of variation  1.4 1.5 1.8 
Total number of tariff lines  11,690  11,435   
 Duty-free rates  6,573  6,566   
 Ad valorem  rates (>0%)  5,001  4,750   
 Specific rates  64 64  
 Compound rates  50 53  
 Alternate rates  2 2  
a Domestic tariff peaks are defined as those exceeding three  times the overall simple average applied 
rate. 
b International tariff peaks are defined as those exceeding 15%.  
c Nuisance rates are those greater than zero, but less than or equal to 2%.  
Note:  Calculations exclude in -quota tariff rate quota (TRQ) rates and specific rates, but include ad valorem  
components of  compound and alternate rates. The 2017 and 2022 applied tariffs are based on the 
HS17 and HS22 nomenclatures, respectively.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
Chart 3.2 Average applied MFN tariff rates, by HS section, 2017 and 2022  
 
Note:  The 2017 and 2022 applied tariffs are based on the HS17 and HS22 nomenclatures, respectively. 
Calculations exclude in -quota and specific rates and including the ad valorem  part of comp ound and 
alternate rates.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
3.18.  The applied 2022 MFN tariff structure indicates some tariff escalation: on average, rates 
are 3.5% on raw materials, 6.3% on semi -processed products,  and 8.7% on fully processed goods 
(Table  A3.1). For example, whereas imported cocoa beans are duty free, the average duty on cocoa 
WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  paste and cocoa powder is 8%, and 14.4% on cocoa preparations. Similarly, average import duties 
on raw timber (zero) increas e for semi -processed wood (6.9%) and processed wood (16.0%).33 
3.19.  Significant nomenclature differences render impossible a full comparison between the bound 
Schedule  XXXIX (in HS02) and the 2022 applied tariff (in HS17).34 Approximately 20% of the tariff 
lines could not be compared. Although almost all applied MFN rates are lower than their bound rates, 
some 11  tariff lines appear to be exceeding their bound levels. The authorities acknowledged that 
these errors should be c orrected.  
3.1.3.3   Tariff rate quotas (TRQs)  
3.20.  Malaysia continues to apply TRQs to satisfy the needs of small and medium domestic 
producers, affecting approximately 0.2% of total tariff lines (Table  3.2). TRQs apply to certain 
agricultural products, mainly live swine  and poultry, poultry meat, liquid milk and cream, eggs, and 
round cabbage. The allocation of TRQs is determined by the Ministry of Agriculture and Food 
Industries and allocated to importers on a first -come, first -served basis. The in -quota rates 
averaged  15.2% in  2022, whereas the out -of-quota rates averaged 43%. In -quota rates ranged 
from 0% to 25% while out -of-quota rates varied between 20% and 90%.  
3.21.  Malaysia administers 19  WTO tariff quotas to regulate market access, mainly for  milk, poultry 
meat, and eg gs.35 Its most recent notification of TRQs to the WTO covers 2018 (calendar year).36 
Quota fill rates reached 100% for poultry meat in 201837, but otherwise most TRQs were 
underutilized or not filled at all. According to the authorities, low fill rates wer e due to high import 
prices for products such as eggs, poultry, and liquid milk, and low demand for products such as live 
swine and pork carcasses.  
3.1.3.4   Tariff exemptions and reductions  
3.22.  The Customs Duties (Exemption) Order  2017 enumerates various products that allow specific 
users to claim import duty exemption according to prescribed conditions under the Order.38 
Moreover, manufacturers are eligible to apply for import duty exemptions on raw materials and 
components used in the manufacture of goods, and for mac hinery and equipment not available in 
Malaysia essential to the manufacturing process. Only the Ministry of Finance (MOF) has the 
authority to approve and grant duty exemptions.  
3.1.3.5   Tariff preferences  
3.23.  As indicated in Table  3.2, Malaysia grants duty -free treatm ent on 57.4% of its tariff lines on 
an MFN basis, and its network of preferential agreements widens the duty -free regime significantly. 
At present, Malaysia has implemented 15  FTAs, including the newly signed ASEAN -Hong Kong,  China 
FTA and the Regional Com prehensive Economic Partnership (RCEP).  
3.24.  Towards its ASEAN partners, Malaysia grants duty -free treatment to nearly all originating 
products (98.7% of all tariff lines) from ASEAN partners  under the ATIGA. Products excluded from 
the ATIGA are mainly alcoholi c beverages, tobacco, and arms and ammunition (Table  3.3). 
Malaysia's preferential tariffs for intra -ASEAN trade remain under the ASEAN Harmonized Tariff 
 
33 The WTO Secretariat considered the following product groups: for raw cocoa (HS  1801), 
semi-processed (HS  1802-1805), and processed cocoa (HS  1806); and raw timber (HS  4403), semi -processed 
wood (HS 4404-4413), and processed wood (HS  4414-4421).  
34 Malaysia's most recent certified Schedule  XXXIX is in the HS02 nomenclature and annexed to 
WTO document WT/Let/1555, 13  August  2021. The original transposition of the schedule from HS1996 to HS02 
include d a number of errors and inconsistencies. A rectification to the initial certification (WTO document 
WT/Let/793, 24  June 2011) was accordingly circulated in 2017 (WTO document WT/Let/1243, 
28 February  2017).  
35 WTO document G/AG/N/MYS/55, 26  September  2022. 
36 WTO document G/AG/N/MYS/55, 26  September  2022.  
37 TQ IDs for Q008, Q009, and Q010 corresponding to tariff lines HS  0207130000 and HS  0207140000.  
38 Federal Government Gazette, Customs Duties (Exemption) Order  2017, P.U.(A)  455, 
29 December  2017. The amendments to the Order  2017 include Customs Duties (Exemption) 2017 
(Amendment) Orders  2021 (P.U.(A)  280), 2021 (P.U.(A)  335), 2022 (P.U.(A)  20), 2022 (P.U.(A)  80), 2022 
(P.U.(A)  177), 2022 (P.U.(A)  299), and 2022 (P.U.(A)  300), al l of which have been published in the Federal 
Government Gazette.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Nomenclature (AHTN)  2022 classification system, which consists of 11,435 at the 10 -digit tariff line 
level (excluding in -quota tariff lines).39 
Table 3.3 Preferential tariff regime, 2022  
 Total  WTO agriculture  WTO non -agriculture  
Average 
(%) Duty -free 
rates 
(%) Average  
(%) Duty -free 
rates 
(%)  Average  
(%) Duty -free 
rates 
(%) 
MFN 7.6 57.4 7.0 66.6 7.6 56.1 
ASEAN Trade in Goods Agreement 
(ATIGAa) (HS17)  0.3 98.7 1.7 91.3 0.0 99.7 
ASEAN -Australia -New Zealand FTA  
(AANZFTA) (HS12)  0.7 94.3 3.9 89.4 0.3 95.0 
ASEAN -China FTA (ACFTA – HS17)  1.8 88.9 3.5 92.4 1.6 88.4 
ASEAN -Hong Kong,  China FTA  
(AHKTA) (HS17)  5.2 66.3 5.7 81.1 5.1 64.2 
ASEAN -India FTA (AIFTA) (HS07)  3.6 78.1 4.9 87.4 3.4 76.8 
ASEAN -Japan (AJCEPA) (HS07)  1.5 89.5 4.6 88.8 1.0 89.7 
ASEAN -Korea,  Rep. of, FTA  
(AKFTA) (HS12)  2.0 85.3 4.3 89.2 1.7 84.7 
Malaysia -Australia FTA (MAFTA) (HS12)  0.5 98.6 3.8 91.0 0.0 99.7 
Malaysia -Chile FTA (MCFTA) (HS07)  1.0 90.2 4.3 88.8 0.6 90.4 
Malaysia -India CECA (MICECA) (HS07)  3.4 78.6 4.6 87.7 3.2 77.3 
Malaysia -Japan EPA (MJEPA) (HS07)  0.6 98.1 4.3 90.6 0.1 99.2 
Malaysia -New Zealand FTA  
(MNZFTA) (HS07)  0.5 98.6 3.8 91.0 0.0 99.7 
Malaysia -Pakistan CEPA  
(MPCEPA) (HS07)  4.8 73.3 3.9 88.8 4.9 71.1 
Malaysia -Türkiye FTA (MTFTA) (HS12)  0.6 96.8 4.1 88.9 0.1 98.0 
RCEPb 7.0 63.1 5.9 81.9 7.2 60.3 
a Malaysia together with Brunei  Darussalam, Cambodia, Indonesia, Lao  People's Democratic Republic, 
Myanmar, Philippines, Singapore, Thailand, and Viet  Nam.  
b RCEP comprises Australia, Brunei  Darussalam, Cambodia, China, Indonesia, Japan, 
the Republic  of Korea, Lao  People's Democratic Republic, Malaysia, Myanmar, New  Zealand, 
the Philippines, Singapore, Thailand, and Viet  Nam.  
Note:  Calculations exclude in -quota TRQ rates and specific rates and include the ad valorem  part of 
compound and alternate rate s. The Secretariat adjusted the preferential tariffs in various 
HS nomenclatures into HS22, to the best extent possible, for computation purposes.  
Source:  WTO Secretariat calculations, based on data received from the authorities and information taken 
from the Official Portal of the MITI – Malaysia's Free Trade Agreements.  
3.25.  Under preferential tariff arrangements (other than ATIGA noted above), duty -free treatment 
covers about 87% of tariff lines on average. The main exceptions from preferences relate to motor  
vehicles, iron and steel, alcoholic beverages, plastics, and tobacco. The simple average tariff rates 
under preferential tariff arrangements remain lower than the average MFN tariff rate overall. 
However, at a disaggregated level, the rates vary considera bly between the arrangements and 
among sectoral groups.  
3.1.4   Other charges affecting imports  
3.26.  The RMCD  charges no fees for customs procedures or formalities connected with importation 
(or exportation). However, imported goods and services are subject to the same internal taxes as 
those applicable to domestically produced goods and services, in particular t he Sales and Service 
Tax (SST) and excise duties on selected products. The SST accounted for nearly 15% of total 
government tax revenue in 2021 (Table  3.4). Revenues from excise duties are also substantial 
(about 5%) and far more important for the budget t han the contributions from import duties 
(1.5%  of total tax revenue).  
 
39 Federal Government Gazette, Customs Duties (Goods of ASEAN Countries Origin) (ASEAN Harmonized 
Tariff Nomenclature and ASEAN trade in Goods Agreement) Order  2022, P.U.(A)  199, 31 May 2022. WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 3.4 Structure of direct and indirect tax revenue, 2018 -2021  
(MYR million, unless otherwise indicated)  
  2018  2019  2020  2021  
Total tax revenue  174,060  180,566  153,050  172,874  
Share of GDP (%)  12.0 11.9 10.8 11.2 
Direct taxes  130,034  134,723  112,511  130,116  
% of total tax revenue  74.7 74.6 73.5 75.3 
 Corporate income tax  66,474  63,751  50,065  79,829  
 Petroleum income tax  20,082  20,783  12,772  11,570  
 Income tax on persons  32,605  38,680  38,953  27,051  
 Stamp duties  5,924  6,213  5,506  6,340  
 Other  4,949  5,296  5,215  5,326  
Indirect taxes  44,026  45,843  40,539  42,758  
% of total tax revenue  25.3 25.4 26.5 24.7 
 Export duties  1,725  1,126  746 2,057  
 Import duties  2,897  2,733  2,346  2,645  
 Excise duties  10,779  10,511  8,507  8,768  
 Domestic  4,918  5,131  3,900  4,200  
 Import  5,861  5,380  4,607  4,568  
 GST 20,236  n.a. n.a. n.a. 
 Sales tax  3,971  15,385  14,767  14,241  
 Domestic  1,095  6,445  6,494  5,306  
 Import  2,876  8,940  8,273  8,935  
 Services tax  1,473  12,283  12,006  12,018  
 Other  2,945  3,805  2,167  3,029  
Memorandum     
  
Petroleum income tax (% of total tax revenue)  11.5 11.5 8.3 6.7 
Import duties (% of total tax revenue)  1.7 1.5 1.5 1.5 
n.a. Not applicable. The Goods and Services Tax (GST) system was replaced by Sales and Service 
Tax (SST).  
Source:  Bank Negara Malaysia; and information provided by the authorities.  
3.27.  The Goods and Services Tax (GST), introduced on 1  April 2015, was abrogated with effect 
from 1  September2018 as Malaysia reverted to the SST system. The MOF announced the decision 
in May  2018, and a tax holiday (i.e.  GST rates reduced to zero) was declared  on 1 June for the 
period of transition to the SST. The present SST regime is governed by the Sales Tax Act  2018 and 
the Service Tax Act  2018. SST tax rates are generally either 5% or 10% for goods, while the service 
tax rate is 6%. Certain petroleum produ cts are subject to specific rates of sales tax.  
3.28.  On goods, the sales tax is a single -stage tax levied on taxable imports and locally 
manufactured taxable goods, either at the time of importation or at the time the goods are sold by 
the manufacturer.40 The sales tax is levied at a standard rate of 10% of the dutiable value or  a 
reduced rate of 5% on certain goods listed in the First Schedule of the Sales Tax (Rates of Tax) 
Order  2022, e.g. basic food stuffs, building materials, personal computers, and w atches. Specific 
rates for petroleum products are listed in the Second Schedule of the Sales Tax (Rates of Tax) 
Order  2022. Furthermore, the Sales Tax (Person Exempted from the Payment of Tax) Order 2018 
stipulates that the SST does not apply to certain le gal persons such as government departments, 
duty-free shops, public higher education institutions, and manufacturers.41 These exemptions under 
Order 2018 are classified into three schedules: (i)  Schedule  A – classes of persons meeting the 
criteria and cond itions; (ii)  Schedule  B – manufacturers exempt of tax on the acquisition of all goods 
excluding petroleum to be used solely and directly in manufacturing of specific goods listed under 
Schedule B and non -taxable good for export activities; and (iii)  Schedu le C – registered 
manufacturers of taxable goods exempt of tax on the acquisition of raw materials, components, and 
packaging materials to be used solely and directly in manufacturing of taxable goods. A sales tax 
exemption for passenger vehicles of 100% o f the purchase price on domestically assembled 
passenger cars and 50% on imported passenger cars has been in place since 15  June 2022. Buyers 
who made reservations for vehicles before 30  June 2022 could still enjoy the benefit of sales tax 
 
40 RMCD, Malaysia Sales & Service Tax (SST) , Legislation and Guide s. Viewed at: 
https://mysst.customs.gov.my/ . 
41 Federal Government Gazette, Sales Tax (Persons Exempted From Payment of Tax) Order  2018, 
P.U.(A)  210, 28 August  2018.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  exemption incent ives after the registration period of the vehicles at the Road Transport Department, 
now extended until 31  March  2023.42 
3.29.  SST on goods is levied on registered manufacturers. Registration is mandatory when the 
annual turnover of taxable goods exceeds MYR  500,000. Manufacturers whose sales do not meet 
the prescribed annual threshold may apply for voluntary registration.43 
3.30.  Regarding services, the SST initially did not apply to imported services. However, a 6% service 
tax has been applied to imported digital ser vices supplied by registered foreign services providers 
since 1  January  2020.44 The authorities note that the introduction of this policy aims to ensure equal 
treatment for services supplied by both local and foreign service providers to consumers in 
Malay sia.45 The total number of registered foreign service providers was 376 as at October  2022. 
Digital services are subject to 6% services tax when the total value of taxable services exceeds 
MYR 500,000 within a 12 -month period.  
3.31.  Excise duty is charged on cer tain goods considered non -essential or harmful to health or the 
environment, including sugar -sweetened beverages, motor vehicles, liquor, cigarettes and tobacco, 
playing cards, and mahjong tiles.46 The Excise Duties Order  2022, effective since 1  June 2022, 
lists 386 items at the 10 -digit tariff line level (Table  A3.2). Motor vehicles account for about 70% of 
the excisable tariff lines, followed by alcoholic beverages (14.8%). Malaysia levies high ex cise duties 
on motor vehicles (60% -105% in most cases), differentiated by engine size and type of vehicle. 
Non-ad valorem  excise duties mainly apply to beverages. Although the rates of excises do not 
distinguish between domestic and foreign alcoholic bever ages at the tariff line level, some beverages 
(e.g. rice wine, samsu, arrack, and bitters) are taxed considerably more lightly than imported wine 
and spirits (e.g.  whiskies, brandy, gin and Geneva, vodka, and rum).  
3.32.  The tax base was broadened during the rev iew period as the coverage of excise duties 
was extended to sugary drinks or sugar -sweetened beverages (MYR  0.40 per litre, effective from 
1 July 2019) as well as devices for all types of electronic and non -electronic cigarettes (10%) and 
liquid used in el ectronic cigarettes (MYR  0.4 per ml, effective from 1  January  2021).47 In addition, 
excise duties of MYR  0.47/100  g were introduced on sugar -containing premix preparations 
(exceeding 33.3  g/100  g), effective from 1  November  2022.48 
3.33.  Excise duties are exempt ed for some goods specified in the Excise Duties (Exemption) 
Order  2017 and its amendments. The 2017  Order specifies persons or institutions that may claim 
duty exemption provided they meet the conditions prescribed in the Order. For example, the Rubber 
Research Institute of Malaysia may apply for duty exemption on all goods except motor vehicles 
when goods are imported from a licensed manufacturer for research purposes.  
3.1.5   Import prohibitions, restrictions, and licensing  
3.34.  Pursuant to subsection  31(1) of the Cu stoms Act, importation of certain goods into Malaysia 
may be fully prohibited or admitted conditionally. The Customs (Prohibition of Imports) Order  2017, 
effective since April  2017, remains Malaysia's main legislation for import prohibition and licensing 
requirements, along with other legislation related to poisonous substances, drugs, chemicals, and 
security concerns (Table  3.5). 
 
42 Information provided by the authorities.  
43 RMCD, Malaysia Sales & Service Tax (SST) , Legislation and Guides .  
44 RMCD, Malaysia Sales & Service Tax (SST) , Legislation and Guides ; and Federal Government Gazette, 
Service Tax (Rate of Digital Services Tax) Order 2019, P.U.(A)  271, 30 September  2019.  
45 The imposition of service tax on imported services was done in phases: services imported by 
businesses (business to business (B2B)) implemented from 1  January  2019, and digital services im ported by 
consumers (business to consumer (B2C)) from 1  January  2020.  
46 RMCD, Excise Duty . Viewed at: http://www.customs.gov.my/en/cp/Pages/cp_exc1.aspx .  
47 Federal Government Gazette, Excise Duties (Amendment) Order  2019, P.U.(A)  154, 31 May 2019, 
and Excise Duties (Amendment) Order  2020, P.U.(A)  417, 31 December  2020.  
48 Federal Government Gazette, Excise Duties (Amendment) Order 2022 , P.U.(A)  287, 
9 September  2022.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 3.5 Structure of the Customs (Prohibition of Imports) Order 2017  
Schedule  Description  
First Schedule  Goods absolutely prohibited from importation  
Second Schedule   
 Part I  Conditional prohibition except under import licence  
 Part II  Conditional prohibition except under import licence, and does not apply to specified 
free zones  
 Part III  Conditional prohibition except under import licence, and shall not apply to Labuan, 
Langkawi, Tioman,  Pangkor,  and specified free zones  
Third Schedule   
 Part I  Conditional prohibition except in the manner provided for  
 Part II  Conditional prohibition, except in the manner provided for, and shall not apply to the 
free commercial zones  
 Part III  Conditional prohibition, except in the manner provided for, goods controlled under 
the International Trade in Endangered Species Act 200 8 
Fourth Schedule   
 Part I  Conditional prohibition except conforming to the Malaysian Standard or other 
standards approved by the Malaysian authorities and in the manner provided  
 Part II  Conditional prohibition except conforming to the Malaysian Standard or other 
standards approved by the Malaysian authorities and in the manner provided for, and 
does not apply to the free commercial zones  
Source:  Federal Government Gazette, Customs (Prohibition of Imports) Order  2017, P.U.(A)  103, 
31 March 2017; and Customs (Prohibition of Imports) (Amendment) (No.  6) Order  2019, 
P.U.(A)  407, 31 December  2019.  
3.35.  The RMCD administers import controls, while other government ministries and agencies are 
responsible for legislation and approval of licences.49 The importation of certain goods is prohibited 
or restricted for reasons of sanitary and phytosanitary (SPS), health, safety, religion, environmental 
purposes, or Malaysia's compliance with international agreements. The product coverage may 
change, and the modifications are announced in the Federal Government Gazette. Since the previous 
Review, the 2017  Order has been amended several times to account for changes in the licensing 
requirements for various products.50 Import restrictions also apply to infringin g goods, infringing 
copies, and goods with falsely applied geographical indication. The Trademarks Act  2019 provides 
restriction on importation of infringing goods (Section  82). The Copyright Act  1987 provides 
restriction on importation of infringing copie s (Section  39). The Geographical Indications Act  2022 
provides that importing or selling goods with falsely applied geographical indication is an offence 
(Section  35). 
3.36.  The First  Schedule of the Customs (Prohibition of Imports) Order  2017 lists products tha t may 
not be imported or transited through Malaysia, mainly for the protection of human health or safety, 
the environment, or on religious grounds (Table  3.6). One product group – mixed waste and scrap 
of miscellaneous paper or paperboard – was added to th e list in early 2022.51 The authorities note 
that this amendment is to ensure the importation of the product into the country is controlled by 
relevant government agencies and does not contribute to negative externalities to the environment 
in the long ter m. 
 
49 WTO document G/LIC/N3/MYS/15, 28  January  2021.  
50 Federal Government Gazette, Customs (Prohibition of Imports) Order  2017 (P.U.(A)  103), 
31 March  2017, together with Customs (Prohibition of Imports) (Amendment) Orders  2017 (P.U.(A)  225), 2018 
(P.U.(A)  57), 2018 (P.U.(A)  223), 2019 (P.U.(A)  35), 2019 (P.U.(A)  73), 2019 (P.U.(A)  228), 
2019 (P.U.(A)  332), 2019 (P.U.(A)  358), 2019 (P.U.(A)  407), 2020 (P.U.(A)  70), 2020 (P.U.(A)  175), 
2020 (P.U.(A)  231), 2020 (P.U.(A)  370), 2020 (P.U.(A)  406), 2022 (P.U.(A)  7), 2022 (P.U.(A)  8), 
2022 (P.U.(A)  156), and 2022 (P.U.(A)  257). 
51 Federal Government Gazette, Customs (Prohibition of Imports) (Amendment) (No.  2) Order  2022, 
P.U.(A)  8, 7 January  2022.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 3.6 Import prohibitions  
Description of product  
Imported from all countries :  
• A number of products related to religious, security, health, environmental protection, and safety;  
• Some broadcast receivers;  
• Comb or comb chunk;  
• Lightning arresters containing radioactive material;  
• Liquid -filled type electric heating bag; cushion, pillow, pouch or pad using alternating current (AC) 
or AC and direct current (AC/DC);  
• New pneumatic snow tyres a nd new re -treaded snow tyres;  
• Poisonous chemicals and minerals;  
• Certain animal feed;  
• Sodium arsenite;  
• Substances covered under the Montreal Protocol; and  
• Mixed waste and scrap of miscellaneous paper or paperboard.  
Imported from Indonesia :  
• Logs; wood in the rough logs; wood in the rough, whether or not stripped of its bark or merely 
roughed down; wood roughly squared or half -squared but not further manufactured; and baulks.  
Source:  Federal Government Gazette, Customs (Prohibition of Imports) Order  2017, P.U.(A)  103, 
First Schedule , 31 March  2017; and Customs (Prohibition of Imports) (Amendment) (No.  2) 
Order  2022, P.U.(A)  8, 7 January  2022.  
3.37.  Import licence/import permit requirements may be automatic or non -automatic, depending 
on the product. Licences a re also utilized to allocate TRQs (Section  3.1.3.3). According to the 
authorities, automatic licence/import permit is implemented to collect data or for monitoring 
purposes. Products subject to automatic licence/import permit include sugar; passenger and 
commercial motor vehicles; motorcycles; bodies (including cabs) of motor vehicles; chassis and 
parts thereof for motor vehicles; ships' derricks; semi -finished products of iron and steel, including 
slab, bloom, and billets; and flat -rolled products of iron or non -alloy steel.52 
3.38.  The import licensing system is mainly non -automatic. The Customs (Prohibition of Imports) 
Order  2017 lists three  types of situations (schedules) where import licences or permits are issued 
by the relevant authorities. The import licence is required upon arrival. All types of licence 
applications may be submitted electronically (ePermit) through the NSW o perated by Dagang  Net or 
manually to the licence -issuing authorities.53 Once issued, import licences may not be changed, 
amended, or reused.54 
3.39.  Items listed in the Second Schedule of the 2017 Order  include sugar, rice, radar apparatus, 
used brakes, unmanufa ctured tobacco, and all goods originating in (or exported to) Israel 
(Table  A3.3). However, the import controls authorized according to the second schedule do not apply 
to certain goods destined for Labuan, Langkawi, Tioman, Pangkor, and specified free zon es.55 Most 
Second Schedule import licences are issued by the MITI, the MOH, or the Ministry of Environment  
and Water . In 2019, import licences issued by the MITI for the importation of certain iron and steel 
products were replaced by Certificate of Approva l requirements.56 According to the authorities, 
importation of certain iron and steel products and steel require a certificate of approval from the 
Construction Industry Development Board (CIDB) for construction purposes and SIRIM Berhad for 
non-constructi on purposes.  
 
52 WTO documents G/LIC/N/3/MYS/15, 28  January  2021; and WT/TPR/S/366/Rev. 1, 25 May 2018.  
53 WTO document G/LIC/N/3/MYS/15, 28  January  2021.  
54 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
55 Federal Government Gazette, Customs (Prohibition of Imports) Order  2017, P.U.(A)  103, 
Second  Schedule, Parts  II and III , 31 March  2017; and WTO document G/LIC/N/2/MYS/8, 19  August  2017. 
As noted in the previous Review (2017), import licence requirements for some of iron and steel products 
(181 tariff lines) were abolished in July  2017.  
56 Federal Government Gazette, Customs (Prohibition of Imp orts) (Amendment) (No.  3) Order  2019, 
P.U.(A)  228, 16 August  2019; and Ministry of International Trade and Industry, Approved Permit . Viewed at: 
https://www.miti.gov.my/index.php/pages/view/ 3796. Items include flat -rolled products of other alloy steel, of 
a width of 600  mm or more under HS  7225.30.9000 and 7225.40.9000 (effective on 1  June 2019) and bars 
and rods, hot -rolled of other alloy steels under HS  7225.30.1000, 7225.40.1000, 7225.50.1 000, 
7225.50.9000, 7227.10.0000, 7227.20.0000, and 7227.90.0000 (effective from 1  November  2019).  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  3.40.  The Third Schedule of the 2017  Order, Part  I, predominantly lists goods subject to licensing 
or approval57 on SPS grounds, but also includes imports restricted for other reasons 
(e.g. bullet -proof suits, pepper spray, arms and ammunition, and rough diamonds) (Table  3.7). 
Licences (or approval) are issued, inter alia, by the Malaysian Quarantine and Inspection Services 
(MAQIS), the Department of Environment, the Department of Wildlife and National Park s, the Food 
Safety and Quality Division of t he MOH, the Department of National Solid Waste Management, the 
Ministry of Home Affairs, the Pesticide Board under the Department of Agriculture (DOA), the 
Malaysia Timber Industry Board, and the Atomic Energy Licensing Board.58 In many cases, inspection 
may be required prior to release by the RMCD. Legislation on which the licensing requirements (or 
approval) include the Malaysian Quarantine and Inspection Services Act  2011, the Plant Quarantine 
Act 1976, the Plant Quarantine Regulations  1981, the Wildlife  Conservation Act  2010, Atomic Energy 
Licensing Act  1984, the Radiation Protection (Licensing) Regulations  1986, Atomic Energy Licensing 
(Low Activity Radioactive Material) (Exemption) Order  2020, the Food Act  1983 and Food 
Regulations  1985, the Internatio nal Trade in Endangered Species Act  2008, the Animals Ordinance, 
1962 (Sabah No.  16 of 1962) (Sabah), the Veterinary Public Health Ordinance,  1999, Cap  32 
(Sarawak), and the Environmental Quality Act  1974. For imports into Sabah and Sarawak, permits 
and ap provals are issued by the competent state authorities.  
Table 3.7 Products covered the Customs (Prohibition of Imports) Order 2017, 
Third Schedule  
Category  Main items  
Part I   
Products 
related to SPS 
reasons  Animals and animal products; plant and plant products; agricultural products 
(e.g. pasta, rice, flour, vegetables, coffee), soil including earth, food products, solid 
waste; logs and wood in the rough from all countries (except Indonesia), wood and  
articles wood, radioactive materials and irradiating apparatus, baby feeding bottles, 
ceramic tableware and kitchenware; tobacco and manufactured tobacco; alcohol; 
stones; and water  
Products not 
related to SPS 
reasons  Bullet -proof suits, pepper spray, arms and ammunition, fireworks; toxic and hazardous 
waste; amusement machines; rough diamonds; substances covered under the 
Rotterdam Convention  
Second -hand 
materials  Used pneumatic tyres and used retreaded pneumatic tyres of rubber; used household  
electronics (e.g. televisions, washing machines)  
Part II  Cigarettes; apparatus or equipment for the brewing of beer at home; beer, wine, 
vermouth and other wine of grapes; other fermented beverages; ethyl alcohol, spirits 
and liqueurs, etc.  
Part III  Goods controlled under the International Trade in Endangered Species Act 2008: any 
terrestrial animal; any marine animal; any terrestrial plant excluding timber species; 
and any timber species as specified in the CITES  
Source:  WTO Secretariat based on Feder al Government Gazette, Customs (Prohibition of Imports) 
Order  2017, P.U.(A)  103, 31 March  2017; and WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
3.41.  The requirements applicable to Third Schedule, Part  II items, i.e.  cigarettes and alcoholic 
beverages, do not apply to free commercial zones (FCZs). Part  III concerns importation and transit 
of goods controlled under the International Trade in Endangered Species Act  2008. CITES permits 
are principally issued by the DOA, the Malaysian Timber Indus try Board, or the Department of 
Fisheries.59 For goods in transit, each consignment must be accompanied by: (i)  a valid export or 
re-export permit, licence, certificate, or written permission in accordance with CITES issued by the 
competent authority of th e country of export or re -export; and (ii)  where required by the country of 
importation, a valid import permit, licence, certificate, or written permission, in accordance with 
CITES, issued by its competent authority.60 
3.42.  In addition to import requirements r egulated by the 2017 Order, Malaysia continues to 
maintain its AP system for the automobile industry. A company must obtain APs to import 
foreign -built or assembled cars, trucks, and motorcycles as part of the National  Automotive Policy.61 
 
57 According to the authorities, the term "approval" is applied for food products under the MOH.  
58 WTO document WT/TPR/S/366/Rev.1, 25  May 2018; and Federal G overnment Gazette , Customs 
(Prohibition of Imports) Order 2017 , P.U.(A)  103, 31  March  2017.  
59 Federal Government Gazette, Customs (Prohibition of Imports) Order  2017, P.U.(A)  103, 
Third Schedule, Part  III, 31 March  2017.  
60 Federal Government Gazette, Custo ms (Prohibition of Imports) Order  2017, P.U.(A)  103, 
Third Schedule, Part  III, 31 March  2017.  
61 WTO documents WT/TPR/S/292/Rev.2, 8  April 2014; and WT/TPR/S/366/Rev.1, 25  May 2018.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  The system does not set a maximum number of APs that a company may obtain. The approval for 
AP is based on the performance, business plan, and financial capability of the company. The MITI 
introduced a New Open AP policy on 1  January  2019. The new policy is intended to provide 
opportunities for qualified Bumiputera automotive entrepreneurs to be involved in the industry.62 
The stated purpose of the Franchise AP  Policy is to monitor and collect data, as well as to facilitate 
the participation of Bumiputera in the autom otive supply chain.63 
3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.43.  The Countervailing and Anti -Dumping Duties Act  1993 and the Countervailing and 
Anti-Dumping Duties Regulations  1994 constitute Malaysia's basic legal framework for the 
investigation , imposition, and revocation of anti -dumping and countervailing measures. The 
legislation is administered by the MITI.  
3.44.  Malaysia initiated 25  anti-dumping cases between January  2017 and June 2022. According to 
the most recent WTO notification, Malaysia had 25 anti-dumping measures in the form of duties in 
force on 30 June 2022, mainly covering iron and steel products (Table  3.8).64 In some cases, the 
duties had been extended as a result of the outcome of sunset reviews investigations. Malaysia 
terminated ant i-dumping measures relating to 15  cases during the review period.65 Malaysia notified 
the WTO Committee on Subsidies and Countervailing Measures (SCM  Committee) that it had not 
taken any countervailing measures during the review period.66 
Table 3.8 Anti-dumping measures in force, 30  June  2022  
Product  HS Code  Trading partner  Current expiry date  
Cold-rolled stainless steel 
in coils, sheets or any 
other form  7219.31.00 00, 7219.32.00 00  
7219.33.00 00, 7219.34.00 00  
7219.35.00 00, 7220.20.10 00  
7220.20.90 00  China  
Korea,  Rep. of 
Chinese  Taipei  
Thailand  
Indonesia  
Viet Nam 07/02/2023  
23/04/2026  
Galvanized iron coils/ 
sheets or galvanized steel 
coils/sheets  7210.41.11 00, 7210.41.12 00  
7210.41.19 00, 7210. 41.91 00  
7210.41.99 00, 7210.49.11 00  
7210.49.12 00, 7210.49.13 00  
7210.49.19 00, 7210.49.91 00  
7210.49.99 00, 7212.30.11 00  
7212.30.12 00, 7212.30.13 00  
7212.30.14 00, 7212.30.19 00  
7212.30.90 00, 7225.92.90 00  
7225.99.90 00, 7226.99.11 00  
7226.99.19 00, 7226.99.91 00  
7226.99.99 00  China  
Viet Nam 07/03/2024  
Cellulose fibre reinforced 
cement flat and pattern 
sheets (FCB)  6811.82.90 10, 6811.82.90 90  Thailand  
Indonesia  23/09/2024  
20/03/2025  
Cold-rolled coils of iron or 
non-alloy steel, of width 
more than 1,300  mm 7209.15.00 00, 7209.16.90 00  
7209.17.90 00, 7209.18.99 00  
7225.50.90 00  China  
Japan  
Korea,  Rep. of 
Viet Nam 21/02/2025  
 
62 MITI (2019), " New Open AP Policy Implementation" , 13 March. Viewed at: 
https://www.miti.gov.my/miti/resources/Media%20Release/Media_Release_ -
_New_Open_AP_Policy_Implementation.pdf .  
63 MITI, National Automotive Policy  2020 (NAP  2020) , 21 February  2020.  
64 WTO document G/ADP/N/370/MYS, 26  August  2022.  
65 WTO documents G/ADP/N/314/MYS, 16  October  2018; G/ADP/N/322/MYS, 4  February  2019; 
G/ADP/N/328/MYS, 21  October  2019; and G/ADP/N/342/MYS, 28  September  2020.  
66 WTO documents G/SCM/N/321/Add.1, 23  October  2017; G/SCM/N/328/Add.1, 20  April 2018; 
G/SCM/N/334/Add.1, 19  October  2018; G/SCM/N/342/Add.1/Rev.1, 15  November  2019; G/SCM/N/349/Add.1, 
15 November  2019; G/SCM/N/356/Add.1/Rev.1, 14  October  2020; G/SCM/N/363/Add.1, 14  October  2020; 
G/SCM/N/371/Add.1/Rev.1, 14  October  2021; and G/SCM/N/392/Add.1, 13  October  2022.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Product  HS Code  Trading partner  Current expiry date  
Steel concrete reinforcing 
bar 7214.10.11 00, 7214.10.19 00  
7214.10.21 00, 7214.10.29 00  
7214.20.31 00, 7214.20.39 00  
7214.20.41 00, 7214.20.49 00  
7214.20.51 00, 7214.20.59 00  
7214.20.61 00, 7214.20.69 00  
7214.30.10 00, 7214.30.90 00  
7214.99.11 00, 7214.99.19 00  
7214.99.91 00, 7214.99.92 00  
7214.99.93 00, 7214.99.99 00  
7228.10.10 00, 7228.10.90 00  
7228.20.11  00, 7228.20.19 00  
7228.20.91 00, 7228.20.99 00  
7228.30.10 00, 7228.30.90 00  
7228.40.10 00, 7228.40.90 00  
7228.50.10 00, 7228.50.90 00  
7228.60.10 00, 7228.60.90 00  
7228.80.11 00, 7228.80.19 00  
7228.80.90 00  Singapore  
Türkiye   
Flat-rolled product of 
non-alloy steel plated or 
coated with aluminium and 
zinc 7210.61.11 00, 7210.61.12 00  
7210.61.19 00, 7210.61.91 00  
7210.61.92 00, 7210.61.99 00  
7212.50.23 00, 7212.50.24 90  
7212.50.29 10, 7212.50.29 90  China  
Korea,  Rep. of 
Viet Nam 11/12/2025  
Prepainted, painted or 
colour coated steel coils 
(PPCCSC)  7210.70.11 00, 7210.70.19 00  
7210.70.91 10, 7210.70.91 90  
7210.70.99 10, 7210.70.99 90  China  
Viet Nam 19/07/2026  
Cold rolled coils below 
than 1 ,300 mm 7209.15.00 00, 7209.16.10 00  
7209.16.90 00, 7209.17.10 00  
7209.17.90 00, 7209.18.99 00  
7225.50.10 00, 7225.50.90 00  China  
Korea,  Rep. of 
Viet Nam 08/10/2026  
Stranded steel wires for 
prestressing concrete  7312.10.91 00  China  24/12/2026  
Source:  WTO document G/ADP/N/370/MYS, 26  August  2022; and MITI, Investigations . Viewed at: 
https://www.miti.gov.my/index.php/pages/view/8405 . 
3.45.  The Safeguards Act  2006 and the Safeguard Regulations  2007 regulate the procedures for 
investigation, imposition, and revocation of safeguard measures. The MITI is responsible for 
conducting investigations. In 2020, Malaysia notified to the WTO Committee on Safeguards that it 
had initiated a safeguard investiga tion on imports of ceramic floor and wall tiles.67 The investigation 
was terminated on 11  January  2021 based on the negative preliminary determination since the 
investigation was not able to ascertain any causal link between the increase in imports and a serious 
injury of the domestic industry.  
3.2  Measures D irectly Affecting Exports  
3.2.1   Customs procedures and requirements  
3.46.  Exports are regulated under the Customs Act  1967, the Strategic Trade Act (STA)  2010, and 
other legislation enforced by relevant the competent authorities. All goods for export must be 
declared electronically on Customs Form No.  2, and an export permit, and veterinary health 
certificate, where applicable, must be attached electronically (ePermit) or in hard copy. The RMCD 
reserves the right to inspect consignments to ensure that exports comply wi th laws and 
regulations.68 At the regional level, Malaysia has been rolling out ASEAN Customs Declaration 
Documents (ACDD) since 31  March  2021. ACDD, which is fully operational in Malaysia, is an 
electronic document for the exchange of export declaration i nformation between ASEAN 
member  States.  
3.47.  Export proceeds must be repatriated to Malaysia in full, as per the sales contract, within 
six months from the date of export. Proceeds may be received in foreign currencies (except for the 
 
67 WTO documents G/SG/N/6/MYS/6, 23  September  2020; and G/SG/N/9/MYS/3, 15  January  2021. The 
products under investigation refer to tariff c odes 6907.21.21  00, 6907.21.23  00, 6907.21.91  00, 
6907.21.93  00, 6907.22.11  00, 6907.22.13 00, 6907.22.91  00, 6907.22.93  00, 6907.23.11  00, 
6907.23.13  00, 6907.23.91  00, and 6907.23.93  00. 
68 RMCD, Export Procedure . Viewed at: http://www.customs.gov.my/en/cp/Pages/cp_timp.aspx .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  currency of Israel) or in ringgit from a licensed onshore bank to meet foreign currency obligations.69 
Resident exporters may extend the repatriation of export proceeds beyond 6 months (up to 
24 months) in exceptional circumstances (e.g.  buyer in financial difficulties, foreign exc hange 
restrictions in the buyer's country, quality and/or quantity claims, or fraud).70 
3.2.2   Taxes, charges, and levies  
3.48.  Malaysia levies export taxes on a number of products in accordance with the Customs 
Act 1967, Part  III (11) (Table  3.9). The revenue from exp ort duties accounted for 0.8% of total tax 
revenue on average between 2018 and 2021. In 2022, 123 tariff line items at the 10 -digit level were 
subject to export duties. Most tariff lines carry ad valorem  duties ranging from 5% to 20%. The 
authorities note that the rationale for levying export duties on selected items is for conservation of 
natural resources. Regarding palm oil, the rate of export duty varies according to the market price, 
and an export duty exemption is in place to ensure that smallholders'  income is supported and 
improve oil palm industry competitiveness. Malaysia fully exempted the duty for exports of crude 
palm oil from 1  July 2020 until 31  December  2020 under the National Economic Recovery Plan 
(PENJANA) initiatives in order to cushion t he impact of COVID -19 pandemic. Approval for the 
exemption is under the purview of the MOF.  
Table 3.9 Export duties, 2022  
Export duty 
rate (%)  No. of tariff 
lines  Products  
5 66 Live animals; palm kernel oil; palm nuts suitable for sowing/planting; platinum; 
slag and ash; copper and articles; unwrought zinc  
10 14 Palm kernel oil; crude petroleum oil; gutta -percha; jelutong; waste and scrap of 
alloy steel; remelting scrap ingots; copper waste and scrap; master alloys of 
copper; nickel mattes; nickel oxide sinters; unwrought nickel; aluminium waste or 
scrap  
15 26 Wood in the rough (19 tariff lines); ferrous waste and scrap; lead waste and scrap; 
unwrought lead  
20 2 Kernels  
3-8a 5 Crude palm oil; processed palm oil  
Specific rate  10 Live plants; rattan; rubber tree seeds  
a Export duty rates only refer to crude palm oil (tariff code: 1511.10.0000); these rates vary 
according to the gazetted value.  
Source:  WTO Secretariat calculations, based on information provided by the authorities.  
3.2.3   Export prohibitions, restrictions, and licensing  
3.49.  Subsection  31(1) of the Customs Act stipulates that exportation may be prohibited absolutely 
or conditionally. Export controls, enforced pursua nt to the Customs (Prohibition of Exports) 
Order  2017, apply to a number of products. The stated purposes for export prohibitions or export 
licensing requirements are mainly to safeguard health, safety, or security; for environmental 
purposes; or to comply  with international agreements.  
3.50.  Prohibited exports, enumerated in the first schedule of the 2017  Order, include poisonous 
chemicals and minerals, and substances covered under the Montreal Protocol. Export licensing 
requirements apply to products listed in the second schedule of the Order, notably plants and plant 
products, sugar, cement, and waste and scrap (Table  A3.4). The Third Schedule lists products that 
may be exported subject to certain conditions, including SPS -related requirements for animals and 
animal products, arms and ammunition, toxic and/or hazardous waste, pesticides, and second -hand 
household electronics (Part  I). Face masks (surgical/medical) were added to the product list on 
20 March  2020 with reference to the Control of Supplies Act  1961,  and these export restrictions are 
still in place.71 Face masks may be exported with a letter of approval from the Controller of Supplies, 
Ministry of Domestic Trade and Consumer Affairs. Part  II of the Third Schedule covers goods 
 
69 Bank Negara Malaysia (BNM) (2021), "Liberalization of Foreign Exchange Policy", 31  March. 
Viewed  at: https://www.bnm.gov.my/ -/liberalisation -of-foreign -exchange -policy -2021.  
70 BNM (2021), "Liberalization of Foreign Exchange Policy", 31  March.  
71 Federal Government Gazette, Customs (Prohibition of Expor ts) (Amendment) (No.  2) Order  2020 
(P.U.(A)  92), 19 March  2020.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  controlled under the CITES, and include terrestrial animals, marine animals, and terrestrial plants 
(excluding timber except as specified in the CITES).72 
3.51.  The Strategic Trade Act (STA)  2010, in force since 2011 and last amended in 2017, regulates 
the export, transhipment, and transit of various strategic items such as arms and related materials 
in compliance with Malaysia's international obligations stemming from the United Nations Security 
Council Resolution  1540.73 The Strategic Trade (Strategic Items) List 2021 contains a co mprehensive 
list of such items.74 Export licences for such goods are granted by the MITI's strategic trade controller 
and other relevant authorities which are Atomic Energy Licensing Board, Malaysian Communication s 
and Multimedia Commission, and Pharmaceut ical Services Programme. According to the Strategic 
Trade (Compounding of Offences) Regulations  2022, effective since 1  June 202275, any offence 
committed by any person handling strategic goods prescribed in the Regulations may be 
compounded. An offer to c ompound may be made at any time after the offence is committed.  
3.2.4   Export support and promotion  
3.52.  The Malaysian External Trade Development Corporation (MATRADE) assists exporters in 
developing and expanding their opportunities overseas. Its services include dev eloping training 
programmes to enhance the marketing skills of exporters, conducting market research and collect ing 
commercial intelligence, matching exporters with foreign importers, representing Malaysia in 
international trade fora, protecting Malaysia's  trade interests abroad, and advising the Government 
on trade -related matters. Focusing on exports of manufactured and semi -manufactured goods, 
MATRADE formulates and implements an export marketing strategy for such goods. MATRADE also 
promotes imports on a selective basis.  
3.53.  Market development grants (MDGs) were introduced in 2002 to assist exports in promoting 
their goods and services globally. MDGs' lifetime limit is MYR  300,000. They may be used for physical 
or virtual participation in international trade  fairs and exhibitions or business -to-business meetings, 
and trade missions. SMEs, professional services providers, trade and industry associations, 
chambers of commerce, and cooperatives are eligible for MDGs, and the grant applications are 
submitted onli ne through MATRADE's website.  
3.54.  The Services Export Fund (SEF)  is a trade support facility that assists Malaysian entities 
involved in the service industry such as companies (Malaysian Service Providers (MSPs)), trade and 
industry associations, chambers of c ommerce, professional bodies, government -linked investment 
companies (GLICs), government -linked companies (GLCs), and cooperatives to undertake 
export -related activities in international markets. At least 60% of the equity of the business must 
be Malaysian  owned, and the provider must have been in operation for at least one year. The 
maximum grant per business entity is MYR  4.3 million, also taking into account specific grant limits 
for each of the 12  eligible activities.76 
3.55.  Malaysia operates a number of fre e zones under the Free Zones Act  1990 and governed by 
the Free Zones Regulations  1991 (as amended). They were established to facilitate the expansion 
of export -oriented businesses. The free zones are designated areas supervised by the MOF where 
enterprises  engage in production (free industrial zones (FIZs)) or commercial activities (FCZs). At 
present, there are 21 FIZs and 23 FCZs. Free zone enterprises enjoy multiple tax benefits, including 
exemptions from customs duties, sales tax, and excise taxes on spe cific raw materials and 
equipment. As the free zones are not considered part of Malaysia's regular customs territory, sales 
from enterprises located in the free zones into Malaysia's principal customs area will be subject to 
normal customs procedures, incl uding the payment of duties and taxes.  
 
72 WTO document WT/TPR/S/366/Rev.1, 25  May 2018; and Customs (Prohibition of Exports) Order  2017 
(P.U.(A)  102), Part  II, 31 March  2017.  
73 MITI, Strategic Trade Act (STA) 2010 . Viewed at: 
https://www.miti.gov.my/index.php/pages/view/sta2010 .  
74 MITI, Strategic Trade Act (STA), Strategic Items List . Viewed at: 
https://www.miti.gov.my/index.php/pages/view/8702 .  
75 Federal Government Gazette, Strategic Trade (Compounding of Offences) Regulations 2022 
(P.U(A)  154), 10 May 2022.  
76 MATRADE, Services for Exporters . Viewed at: https://www.matrade.gov.my/en/about -
matrade/media/news -clippings/25 -malaysian -exporters/services -for-exporters/3750 -services -export -fund.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  3.56.  Manufacturers established in the FIZs must export at least 80% of their production, unless a 
lower export requirement (minimum 60%) has been approved by MITI. Import duty exemptions also 
depend on the value of local c ontent; if this is less than 40%, then non -originating raw materials 
must have undergone substantive transformation during the manufacturing process. Goods 
manufactured inside a free zone area are intended for export in accordance with subsection  (8)(1)(a)  
of the Free Zones Act  1990. However, based on the current policy, manufacturers are eligible to 
enjoy local sales not exceeding 20% of their total production. Manufacturers are required to obtain 
approval from Malaysian Investment Development Authority (M IDA) for local sales of finished goods 
exceeding 20%. Good removed from an FIZ to the principal customs area are subject to import duty 
according to the rate under Customs Duty Orders. Starting 1  January  2011, manufacturers in FIZs 
may enjoy payment of imp ort duty equal to the ATIGA rate for local sales if they comply with the 
following conditions: (i)  the percentage of raw materials from ASEAN countries used in the 
manufacturing of finished goods exceeds 40 %; or (ii)  the final product has undergone substan tive 
transformation either resulting in a change in HS  chapter, tariff heading, or tariff subheading; or 
according to a process rule.  
3.57.  The free zones regulations were amended twice during the review period, but the 
amendments did not materially change the benefits applicable in the free zones.77 The objective of 
the Free Zones (Amendment) Act  2019 is to enhance measures in controlling and preventing 
revenue leakages in the free zones through additional enforcement provisions. The Free Zones 
(Amendment) Regulations  2019 seek to balance the role of Customs between facilitating trade and 
securing the trade environment for the purposes of national and global security and also for 
subsequent amendments to the Customs Regulations  2019. Outside the free zones, manufacturers 
may alternatively apply to operate licensed manufacturing warehouses (LMWs) to avail themselves 
of the same privileges and benefits. In September  2022, there were 2,202  LMWs registered with 
Customs. Companies with LMW status (or those that op erate in an FIZ) may, upon application, sell 
up to 40% of their production on the domestic market.  
3.58.  Claims for drawback of import duty and excise tax paid on goods subsequently exported may 
be submitted to the RMCD in accordance with Section  93 of the Custo ms Act  1967 and Section  19A 
of the Excise Act  1976, as amended. The rules were tightened through amendment Acts  A1593 and 
A1594 with effect from 1  January  2020. The period of eligibility from the date of importation and 
re-exportation was shortened from 12  months to 3 months, and the minimum amount of paid duty 
or excise tax to be reclaimed was raised from MYR  50 to MYR  200 per consignment. The RMCD 
subsequently ruled that the earlier conditions were still applicable for goods imported before 
31 December  2019 and re -exported in the course of 2020.78 
3.59.  Malaysia accords exporters reductions in their statutory income tax that are dependent on 
the value of increased exports. Manufacturing companies that attain 30% of value -added exports 
receive an allowance equal to 10% of the value of the increased exports (limited to 70% of the 
statutory income). The allowance is 15% when the value -added percentage is 50% or more. In 
agriculture, a 10% allowance applies to the value of increased exports of prescribed agricultural  
produce. Enhanced allowances are available for companies (in agriculture or manufacturing) that 
attain significant increases in exports (at least 50%) or are successful in penetrating new markets.79 
These incentives are limited to firms with minimum 60% M alaysian equity. In addition, successful 
exporters may qualify for Export  Excellence Awards that correspond to 100% of the value of the 
increased exports.80 In the case of services exports, deductions are applicable for qualifying 
expenditures, and the al lowance for increased exports corresponds to 50% of the value of the growth 
in exports.  
3.2.5   Export finance, insurance, and guarantees  
3.60.  Export -Import Bank of Malaysia Berhad (EXIM Bank) is the only institution dedicated to the 
promotion of cross -border businesse s. In 2005, EXIM Bank merged with Malaysia Export Credit 
 
77 Federal Government Gazette, Free Zones (Amendment) Regulations  2019, 31 December  2019, and 
Free Zones (Amendment) Regulations  2022, 1 April 2022. Viewed at: 
http://www.customs.gov.my/en/pg/Pages/pg_prtnzb.aspx . 
78 RMCD, Public Ruling No.  2/2020 . Viewed at: http://www.customs.gov.my/en/pg/pg_pr/PR%2002 -
2020%20 -%20Relation%20To%20Drawback%20Claims.pdf .  
79 The allowances correspond to 30% of the value of the increased exports in case of significant export 
increase and 50% for the penetration of new markets.  
80 All allowances, including enhanced allowances,  are always capped at 70% of the statutory income.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Insurance Berhad to provide export credit as well as export credit insurance. EXIM Bank offers 
conventional and Islamic banking facilities as well as export credit takaful services, overseas 
investme nts, and guarantee facilities. Malaysian manufacturers, exporters, and suppliers of 
Malaysian goods may also take advantage of the Bank's trade finance facilities to increase their 
exports to international markets through supplier credit or financing facil ities. Cross -border term 
financing is provided directly to Malaysian companies, foreign governments, or foreign buyers of 
Malaysian goods or services. EXIM Bank is owned by the MOF but operates under the purview of 
MITI.  
3.61.  EXIM Bank's balance sheet has been contracting in recent years. Its total assets declined from 
MYR 13.6 billion in 2017 to MYR  7.9 billion in 2021.81 After three  years of consecutive and mounting 
losses, the Bank's  operations were once again profitable overall in 2020 and 2021. At the end 
of 2021, its portfolio of gross loans and other financing assets totalled MYR  5.3 billion, divided 
between conventional products (57.4%) and Islamic financing (42.6%). Its exposures covered 
52 countries.  
3.3  Measures Affecting Production and Trade  
3.3.1   Incentives  
3.62.  Malaysia provides qualifying companies incentives in the form of partial exemption or relief 
from company income tax and indirect taxation (customs duty and excise tax) further to the 
Promotion of Investments Act  1986, Income Tax Act  1967, Custo ms Act  1967, Excise Act  1976, and 
Free Zones Act  1990. The beneficiaries may be investing in manufacturing, agriculture, tourism 
(including hotels), or approved services sectors. More generally, incentives are also available to 
support research and develop ment, training, and environmental protection activities.  
3.63.  The MIDA reviews applications from enterprises seeking "pioneer status" or recourse to the 
"investment tax allowance", which are the principal incentive tools for new investments. Eligibility is 
determined according to priorities such as the level of value added, choice of technology, and 
industrial linkages. Based on the Promotion of Investments Act  1986, a general list of 22  categories 
of promoted activities and products (with subcategories) has bee n established. The general list is 
supplemented by lists promoting certain high technologies, specific activities for small -scale 
companies, selected industries, and reinvestments.82 
3.64.  An enterprise that has been granted pioneer status pays tax on 30% of its  statutory income 
during the first five  years from the start of production.83 Unutilized capital allowances may be carried 
forward past the pioneer stage, and accumulated losses are deductible for up to seven consecutive 
years following the end of the pion eer period. As an alternative to seeking pioneer status, an 
enterprise may apply for the investment tax allowance, amounting to 60% of qualifying capital 
expenditures on the plant, factory, machinery or other equipment purchased for the approved 
project wi thin five years of the first qualifying expenditure. The allowance may be offset against 
70% of the statutory income in each year of assessment and carried forward until fully utilized. The 
remaining 30% of the statutory income is taxed at the prevailing r ate of company tax.84 In 2020 
and 2021, pioneer status was granted to 75  projects involving investments of MYR  8.1 billion, down 
from 210 projects involving investments of MYR  11.6 billion in 2016 and 2017. The Government 
granted an  investment tax allowanc e to 20  projects involving investments of MYR  45.4 billion in 
2020 and 2021, compared with 73  projects involving investments of MYR  42.2 billion in 2016 and 
2017. The two  schemes are mutually exclusive.  
 
81 EXIM Bank Malaysia (2022), Optimising Opportunities, Annual Report  2021. Viewed at: 
https://www.exim.com.my/annual -report/2 021/pdf/EXIM_AR2021.pdf .  
82 MIDA. Viewed at: https://www.mida.gov.my/?s=promoted+activities .  
83 Production day is defined as the date when production reaches 30% of capacity.  
84 The general rat e of company income tax is 24%, with a lower rate (17%) applicable to the 
first MYR 600,000 earned by companies with paid -up capital of less than MYR  2.5 million.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  3.65.  Enhanced incentives are available to enterprises that  engage in specific projects or activities. 
For example, in manufacturing, enterprises may attain 100% exemption from the company 
income  tax for investments in selected mechanical and electrical industries, high -technology 
projects, or priority production lines in the automotive sector (Table  3.10). Enhanced incentives also 
apply to SMEs and small -scale companies. Investors may search for available support on the MIDA 
website through its Investment Incentives Portal (i -Incentives): 
https://investmalaysia.mida.gov.my/incentives/ . 
Table 3.10 More favourable tax incentives – manufacturing  
  Tax incentives  Eligibility criteria  
High -technology 
companies  • Pioneer status with income tax 
exemption of 100% of the statutory 
income for five  years; or  
• ITA of 60% of the qualifying 
expenditure. The allowance can be 
utilized to offset against 100% of the 
statutory income.  • Proposed product/activity must be listed in the 
Promoted Products/Activities for High Technology 
Companies.  
• The percentage of local R&D expenditure to gross sales 
is at least 1% on an annual basis.  
• Scientific and technical staff having degrees or 
diplomas with a minimum five years' experie nce in 
related fields must comprise at least 15% of the 
company's total workforce. Value -added must be at 
least 40%.  
Strategic 
projects  • Pioneer status with income tax 
exemption of 100% of the statutory 
income for 10  years; or  
• ITA of 100% of the qualifying  
expenditure. The allowance can be 
utilized to offset against 100% of the 
statutory income.  Products or activities of national importance. Generally 
involve heavy capital investment with long gestation 
periods, having high level of technology, generating 
extensive linkages, and having significant impact on the 
economy.  
SMEs  A reduced company income tax of 20% 
on chargeable income of up to 
MYR 500,000.  Companies resident in Malaysia with a paid -up capital of 
ordinary shares of MYR  2.5 million or less, and such 
companies cannot be controlled by another company with 
a paid -up capital exceeding MYR  2.5 million.  
Small -scale 
companies  • Pioneer status with income tax 
exemption of 100% of the statutory 
income for five  years; or  
• ITA of 60% of the qualifying 
expenditure. The allowance can be 
utilized to offset against 100% of the 
statutory income.  Companies incorporated in Malaysia with 
shareholders'  fund not exceeding MYR  2.5 million, and 
having 60% -100% Malaysian equity.  
Specialized 
machinery and 
equipment  • Pioneer status with income tax 
exemption of 100% of the statutory 
income for 10  years; or  
• ITA of 100% of the qualifying 
expenditure. The allowance can be 
utilized to offset against 100% of the 
statutory income.  Value added must be a t least 40%; and percentage of 
managerial, technical, and supervisory (MTS) staff 
(MTS Index) to total workforce must be at least 25%.  
Automotive 
industry    
- Critical and 
high value -
added parts 
and 
components 
and production  • Pioneer status with income tax 
exemption of 100% of the statutory 
income for 10  years; or  
• ITA of 100% of the qualifying 
expenditure for 5 years. The 
allowance can be utilized to offset 
against 100% of the statutory 
income.  Companies manufacturing transmission systems, brake 
systems, airbag systems, and steering systems.  
- Hybrid and 
electric 
vehicles and 
related 
infrastructure  • 100% ITA or pioneer status for 
10 years;  
• Customi zed training and R&D grants 
in addition to the existing grants;  
• 50% exemption on excise duty for 
locally assembled/manufactured 
vehicles or provision of grant under 
the Industrial Adjustment Fund; or  
• 100% pioneer status for 10  years or 
ITA of 100% for 5  years, for the 
manufacturing of selected critical 
components supporting hybrid and 
electric vehicle s.  
Utilization of oil 
palm biomass  • Pioneer status with income tax 
exemption of 100% of the statutory 
income for 10  years; or  
• ITA of 100% of the qualifying 
expenditure. The allowance can be 
utilized to offset against 100% of the 
statutory income.  Value added must be at least 60%; MTS staff ratio must 
be at least 25%.  
Source:  MIDA; and WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  3.66.  The Domestic Investment Strategic Fund (DISF ) was set up in 2012 to encourage technology 
upgrading in industries, outsourcing by multinational corporations that are active in Malaysia, and 
Malaysian enterprises gaining international certification in strategic industries. The DISF is a grant 
that mat ches eligible expenditures by the enterprises themselves on a 50/50 basis. The grant is 
available to new enterprises, or existing enterprises (that undertake new investments), in which 
Malaysian ownership is no less than 60%.  
3.67.  The National Economic Recovery  Plan (PENJANA) introduced a Smart Automation Grant 
initiative with an initial allocation of MYR  100 million to encourage SMEs and mid -tier companies in 
manufacturing and services sectors to automate and digitalize their operations and thus improve 
their c ompetitiveness. The grant is an additional non -tax fiscal incentive in the form of funding to 
approved companies that corresponds to a 50/50 matching of eligible expenditures, capped at 
MYR 1 million per enterprise. The Automation Capital Allowance (Automa tion CA) for manufacturers 
was introduced in the 2015  budget. The Automation CA incentive is segregated into two  industry 
categories, i.e.  labour -intensive industries such as rubber, plastic, wood, furniture, and textiles 
(Category  1) and other industries (Category  2). The allowance amounts to 200% of approved 
expenditures incurred within five  years of assessment (2015 -20), limited to expenditures of 
MYR 4 million in Category  1 and MYR  2 million in Category  2. The 2020 Budget extended the 
incentive period u ntil 2023 and expanded the scope to services to enable services providers to invest 
in automation equipment to achieve greater efficiency and productivity. Manufacturing businesses 
and selected agricultural projects that incur capital expenditures while mo dernizing, automating, 
expanding, or diversifying their current business may also qualify for the Reinvestment 
Allowance  (RA). Companies must have been in business operations for at least 36  months to qualify 
for the RA incentive. RA is available for a per iod of 15  years, starting from when the capital 
expenditure was first incurred, and corresponds to 60% of the expenditures in qualifying projects.  
3.68.  In 2020, the Government continued the Industry  4WRD Readiness Assessment and 
Intervention Fund (IF) initiativ es to support the manufacturing and manufacturing -related services 
companies in implementing changes that affect the deployment of labour, technology, or production 
processes. Support is initiated after the completion of a readiness assessment and amounts to a 
70% reimbursement of incurred eligible expenditures up to a maximum grant of MYR  0.5 million. In 
addition to the Industry  4WRD Readiness Assessment and IF, budget was also allocated under the 
Eleventh Malaysia Plan, 2016 -2020 (Eleventh Plan) to suppor t (i) facilities upgrading at public higher 
learning institutions to become competence centres for the enabling technologies of Industry  4.0; 
(ii) train the trainers programme to improve skills in Industry  4.0 pedagogy; (iii)  the Industry  4.0 
National Duel  Training System (SLDN); (iv)  the Smart collaborative platform development 
programme to promote public -private partnership in facilitating Industry  4.0 adoption among SMEs; 
and (v)  the provision of high -speed broadband services at strategic and high -impact  industrial and 
training areas.  
3.69.  Following the Movement Control Order (MCO) of March  2020, the Government introduced 
several packages to mitigate the economic impact of lockdowns and restrictions in the fight against 
the COVID -19 pandemic.85 Among the measu res taken, Bank Negara Malaysia (BNM) is 
administering various financing facilities (credits and guarantees) to sustain business operations 
with emphasis on SMEs, including microenterprises. By end -December  2021, its Fund for SMEs had 
reached MYR  31.1 billion, which was being distributed through various schemes depending on the 
needs of the recipients (Table  3.11). Overall, funds available as at end -December  2021 amounted 
to MYR  10.3 billion. The BNM has also been assisting SMEs and microenterprises with re scheduling 
of loan repayments, and a dedicated Financial Management and Resilience Programme has been set 
up to assist vulnerable borrowers with cash flow difficulties.  
 
85 Businesses may search for support available at the state level at the official portal of t he National 
Economic Recovery Plan. Viewed at: https://pelanpemulihannegara.gov.my/selangor/business -en.html .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 3.11 Bank Negara Malaysia Fund for  SMEs, COVID -19 relief  
Programme 
Scheme  Overall funding 
(MYR)  Financing terms  
Targeted Relief and 
Recovery Facility  8 billion  Loan rate: Up to 3.5% p.a. (incl. guarantee fee)  
Size: Up to MYR  500,000  
Duration: Up to seven  years (incl. moratorium period)  
Moratorium: At least six  months  
High Tech and Green 
Facility – National 
Investment 
Aspirations  800 million  Loan rate: Up to 3.5% (excl. guarantee fee), up to 5% p.a. 
(incl. guarantee fee)  
Size: Up to MYR  10 million  
Duration: Up to 10  years  
SME Automation and 
Digitisation Facility  1 billion  Loan rate: Up to 4% p.a. (incl. guarantee fee)  
Size: Up to MYR  3 million  
Duration: Up to 10  years  
Agrofood Facility  2 billion  Lending rate: Up to 3.75% p.a. (incl. guarantee fund)  
Size: Up to MYR 5 million  
Duration: Up to eight  years  
Business 
Recapitalization 
Facility  1 billion  Lending rate: Up to 3.5% p.a. (excl. guarantee fee), up to 5% p.a. 
(incl. guarantee fee)  
Size: Up to MYR  5 million  
Duration: Up to 10  years  
Low Carbon 
Transition Facility  1 billion  Loan rate: Up to 5% p.a.  
Size: Up to MYR  10 million  
Duration: Up to 10  years  
Micro Enterprises 
Facility  500 million  Lending rate: as determined by the financial institution  
Size: Up to MYR  50,000  
Duration: Up to five  years  
All Economic Sectors 
Facility  5.7 billion  Loan rate: Up to 7% p.a. (incl. guarantee fee)  
Size: Up to MYR  5 million  
Duration: Up to five  years  
PENJANA Tourism 
Financing  600 million  Loan rate: Up to 3.5% p.a. (incl. guarantee fee)  
Size: Up to MYR  500,000  
Duration: Up to seven  years (incl. moratorium period)  
Moratorium: At least six  months  
Source:  MOF, Touchpoints. Budget  2022 Measures . Viewed at: 
https://www.mof.gov.my/portal/arkib/budget/2022/touchpoints -en.pdf ; BNM, Annual Report  2021. 
Viewed at: https://www.bnm.gov.my/documents/20124/6458991/ar2021_en_book.pdf ; and BNM, 
BNM's Fund for SMEs . Viewed at: https://www.bnm.gov.my/funds4sme . 
3.70.  During the review period, Malaysia submitted two notifications, in combination covering the 
period 1  January  2018 to 31  December  2021, to the WTO SCM Committee.86 As in the past, and 
without prejudice to their legal status, effects, or nature under the GAT T 1994 or the 
SCM Agreement, Malaysia notified two programmes (pioneer status and the investment tax 
allowance). Detailed information, including data on amounts of subsidy accorded under the 
two schemes, was not provided.  
3.3.2   Standards and other technical requ irements  
3.71.  The Department of Standards Malaysia (JSM) is Malaysia's national standardization and 
accreditation body, established under the Standards of Malaysia Act 1996 (Act  549) as amended. 
The Act also set up a Standards and Accreditation Council to advis e the Senior Minister of 
International Trade and Industry on relevant matters. MSAC is guided by inputs from 26 National 
Standards Committees (NSCs) and the National Accreditation Committee. The NSCs are sectoral 
standards committees set up by JSM to carry  out the technical work related to standardization in 
each specific industrial sector. JSM represents Malaysia in regional and international activities related 
to standardization and accreditation.  
3.72.  Malaysian standards (MS) are in principle voluntary unless  they have been made mandatory 
by the relevant domestic regulators. Of the 4,804  MS developed across 25  sectors as of 1  June 2022, 
2,032 of them (42.3%) were identical to international standards and a further 210  MS were modified 
versions of international standards.87 Per December  2021, 496  MS had been made mandatory by 
the regulators, notably by the Energy Commission, the Construction Industry Development Board 
(CIDB), the National Water Services Commission, the Federal Agricultural Marketing Authority, an d 
 
86 WTO documents G/SCM/N/343/MYS, 3  July 2020; and G/SCM/N/372/MYS, 30  June 2021.  
87 JSM, MS Statistics . Viewed at: https://www.jsm.gov.my/ms -status#.YtVpQLZByUl .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  the Fire and Rescue Department of Malaysia.88 The mandatory standards pertained to agriculture, 
chemicals, building and construction, petroleum and gas, medical devices and healthcare facilities, 
electrical and electronic equipment, food and food product s, palm oil and related products, and 
quality and environmental management.  
3.73.  The national standards development strategy has evolved from a numbers -based to a 
needs -based model. Moreover, obsolete MS have been withdrawn, and priority is accorded to the 
development of indigenous standards while promoting direct use of international standards. These 
factors taken together have contributed to a downward trend in the overall number of MS.  
3.74.  The Fourth  Schedule of the Customs (Prohibition of Imports) Order  2017 add resses the 
conformity of imports with M S or any other approved standard, as stipulated in the respective 
technical regulations of regulatory bodies. Part  I covers cement, cement products, and plastic 
flushing cisterns equipped mechanisms. Imports require a  certificate of approval (COA) or a letter 
of exemption, issued by or on behalf of the Chief Executive of the CIDB.89 Two items were added to 
Part I in 2022, i.e.  recovered paper and paper board, and waste and scrap of metal. Imports require 
a COA pursuant  to the guidelines for importation and inspection of wastepaper and metal scrap.90 
3.75.  Part II of the Fourth  Schedule lists products subject to TBT requirements (Table  A3.5). 
Several amendments were issued during the review period, notably adding certain steel  products 
(bars and rods), and motor vehicle accessories (child seats, rear view mirrors, and safety glass).91 
Moreover, imports of motor vehicles require a letter of approval issued by the Road Transport 
Department, and the vehicles must satisfy E -Mark an d MS mark requirements.92 Part II requirements 
do not apply to FCZs.  
3.76.  JSM is the sole accreditation body, offering accreditation schemes for (i ) certification bodies; 
(ii) laboratories; (iii)  inspection bodies; (iv)  good laboratory practice compliance (based on 
OECD  principles); (v)  proficiency testing providers; (vi)  primary healthcare laboratories; and 
(vii) validation and verification bodies. By August  2022, JSM had accredited 169  certification bodies 
under 17  different programmes, 824  active laboratories, and 23  Malaysian inspection bodies.93 
3.77.  JSM is a signatory to the International Laboratory Accreditation Cooperation Mutual 
Recognition Arrang ement (ILAC MRA) and the International Accreditation Forum Multilateral 
Recognition Arrangement (IAF MLA). It is also a full adherent to the OECD Mutual Acceptance Data 
in the Assessment of Chemicals. At the regional level, JSM is a signatory to the Asia P acific 
Accreditation Cooperation Mutual Recognition Arrangement (APAC MRA). Following its successful 
APAC peer evaluation in 2020, JSM enlarged its MRA scopes to include proficiency testing providers 
and certification of persons in 2021. Malaysia is a sign atory to five sectoral ASEAN MRAs, covering 
electrical and electronic equipment; GMP inspection of manufacturers for medicinal products; 
inspection and certification systems on food hygiene for prepared foodstuff products; a 
bio-equivalence study report on  generic medicinal products; and type approval of automotive 
products. Malaysia has also entered into recognition agreements with the United  States regarding 
the 2020  APEC-TEL MRA for Conformity Assessment of Telecommunications Equipment 
(EMC Testing) and the US -EPA Toxic Substances Control Act (TSCA) Title  VI for Formaldehyde 
Testing.  
3.78.  Malaysia notifies proposed technical regulations to the WTO Committee on Technical Barriers 
to Trade (TBT Committee) on a regular basis. The 38  notifications submitted betwee n March  2018 
and January  2022 covered a wide range of products, including communications equipment, 
 
88 JSM, Mandatory Standards . Viewed at: https://www.jsm.gov.my/ms -implementation#.YtVsSrZByUk .  
89 Federal Government Gazette, Customs (Prohibition of Imports) Order  2017, P.U.(A)  103, 
Fourth  Schedule, Part  I, 31 March  2017.  
90 Federal Government Gazette, Customs (Prohibition of Imports) (Amendment) (No.  2) Order, 
2022 (P.U.(A)  8), 7 January  2022.  
91 Federal Government Gazette, Customs (Prohibition of Imp orts) (Amendment) Order , 2018 
(P.U.(A)  223), 29 August  2018 and 2022 (P.U.(A)  7), 7 January  2022.  
92 Federal Government Gazette, Customs (Prohibition of Imports) (Amendment) Order , 2022 
(P.U.(A)  7), 7 January  2022.  
93 Status reports on the number of accredited conformity assessment bodies, laboratories, and 
inspection bodies may be accessed at: https://www.jsm .gov.my/statistics#.Yk5DvdNBxD8 ; 
https://www.jsm.gov.my/statistics2#.Yk5Di9NBxD9 ; and 
https://www.jsm.gov.my/statistics1#.Yk5D_NNBxD8 . 
 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  electronic goods, food and beverages, pharmaceuticals, wastepaper and metal scrap products, wood, 
medical devices, motor vehicles, and pre -packaged products . One specific trade concern relating to 
measures maintained by Malaysia was raised in the TBT Committee in March  2022.94 
3.3.3   Sanitary and phytosanitary requirements  
3.79.  The responsibility for enforcement of SPS -related legislation primarily rests with the Ministry 
of Agriculture and Food Industries (MAFI) through the Department of Fisheries (fish and fish 
products), the Department of Veterinary Services (animals and anima l products), and the DOA 
(plants, plant products, and regulated articles) regarding various SPS issues. The Ministry of Health 
(MOH), through its Food Safety and Quality Division, is responsible for food safety matters. At the 
entry points, the MAQIS is a one-stop institution providing integrated services with respect to 
quarantine and certification of imports and exports, whether animals, carcasses, fish, agricultural 
produce, plants, soils, or microorganisms. MAQIS also inspects and enforces regulations t hat cover 
food and related matters.  
3.80.  Malaysia's legal framework for SPS issues remains the same as in recent Reviews and includes 
the Food Act  1983 and Food Regulations  1985; the Food Hygiene Regulations  2009; the Food 
Irradiation Regulations  2011; the Anim al Act  1953 (Act  647); the Animals Ordinance, 1962 (Sabah 
No. 16 of 1962) for Sabah; the Veterinary Public Health Ordinance, 1999, Cap.  32 for Sarawak; the 
Fisheries Act  1985 and Fish Marketing Regulations  2010; the Biosafety Act  2007; the Plant 
Quarantine  Act 1976 and Plant Quarantine Regulations  1981; and the Malaysian Quarantine and 
Inspection Services Act  2011. The main changes since 2018 concern amendments to the Food 
Regulations  1985. Effective 1  April 2021, Malaysia revised the importation requiremen ts for certain 
cereals, grain products, and oil seeds for processing. Henceforth, an import permit from MAQIS as 
well as a phytosanitary certificate issued by the national plant protection organization in the 
exporting country is mandatory for consignments  from all countries.  
3.81.  Requirements pertaining to halal products are specified under Section  29 of the Trade 
Description Act  2011 (Act  730), the Halal Food – Production, Preparation, Handling and Storage – 
General Guidelines (MS  1500:2009), and the Malaysian  Protocol for the Halal Meat and Poultry 
Production.  
3.82.  The Under Secretary of the International Division of MAFI serves as Malaysia's enquiry point 
and notification authority under the WTO  Agreement on the Application of Sanitary and 
Phytosanitary Measures. The 13  notifications provided to the WTO  SPS Committee between 
February  2018 and  August  2021 addressed the changes mentioned above and, except for grains, 
the MOH's Food Safety and Quality Division was identified as the responsible authority. One  new 
specific trade concern was raised by the Russian  Federation in the Committee (ID  491), and 
two previously raised issues resurfaced.95 
3.83.  Malaysia is a member of the key international standard setting bodies in the SPS area, i.e.  the 
Codex Alimentarius Commission ( since 1971), the World Organisation for Animal Health (WOAH), 
and the International Plant Protection Convention. According to the authorities, Malaysia takes into 
account guidelines issued by these institutions in the conduct of risk assessment. Regarding bovine 
spongiform encephalopathy (BSE), Malaysia's surveillance and monitoring systems are based on 
WOAH standards. Malaysia is a country without an official BSE risk status, and imports of beef are 
only allowed from countries of negligible risk or control led risk. Should an outbreak of avian influenza 
be notified to WOAH, the Department of Veterinary Services will suspend imports from the affected 
countries and resume importation in accordance with Articles  10.4.3 and 10.4.19 of the WOAH 
Terrestrial Animal  Health Code  2021.  
 
94 STC ID 729. The Republic  of Korea raised a concern regarding Malaysia's Guideline for Approval of 
Electrical Equipment  (Electricity Regulation  1994) Information Booklet 2018 Edition, notified in WTO document 
G/TBT/N/MYS/90, 11  June 2019.  
95 The STC raised by the Russian  Federation is being discussed bilaterally according to the Malaysian 
authorities. The two older STCs pe rtain to import restrictions on pork and pork products (ID  323) and general 
import restrictions due to BSE (ID  193) maintained by Malaysia and a number of other countries. Bilateral 
consultations are ongoing.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  3.3.4   Competition policy and price controls  
3.3.4.1   Competition policy  
3.84.  The Malaysia Competition Commission (MyCC), an agency under the Ministry of Domestic 
Trade and Consumer Affairs , is responsible for the implementation of Malaysia's competition 
legislation, i.e.  the Competition Act  2010 (Act  712) and the Competition Commission Act  2010 
(Act 713). The MyCC has issued implementation guidelines regarding market definition, 
anti-competitive agreements, abuse of dominant position, complaints procedures, financial 
penalties, and its leniency regime. Guidelines on intellectual property rights (IPRs) and competition 
law were published in April  2019.96 MyCC activities include the provision of policy advice to ministries 
and government agencies as well as advo cacy programmes for public and private sectors.  
3.85.  The Competition Act  2010 does not cover aviation, telecommunications, or energy as these 
sectors are regulated under other laws.97 Moreover, it does not extend to acts involving the exercise 
of governmental a uthority, activities with purely social objectives carried out according to the 
"solidarity" principle, purchases of goods or services not for resale or resupply, services involving 
general economic interest (e.g.  public utilities), collective bargaining, or agreements or conduct that 
comply with any law. A Special Committee on Competition, set up in 2012 and chaired by the MyCC, 
involves nine other sector regulators, including the Malaysian Communications and Multimedia 
Commission, the Energy Commission, t he Malaysian Aviation Commission, and the Companies 
Commission of Malaysia.  
3.86.  Although the Act prohibits abuse of dominant position (defined as more than 60% market 
share) and anti -competitive agreements (e.g.  price fixing, market sharing, or bid rigging), a nd in 
particular hard -core cartels, no provisions provide for ex ante  scrutiny of mergers or acquisitions. 
According to the authorities, plans exist to revise the Competition Act to provide for merger and 
acquisition controls. The MyCC would also prepare g uidelines for the new merger control framework, 
which would be expected to come into force one to two years after the revised Competition Act has 
been gazetted. The proposed amendment of the Competition Act  2010 includes the amendment of 
provisions relatin g to the investigation and enforcement powers and the introduction of a merger 
control regime that will provide the MyCC with the authority to review and investigate transactions 
that are likely to cause market concentration. The merger control regime is e xpected to come into 
force in 2023.  
3.87.  The MyCC participates actively in international fora dedicated to competition policy and 
competition law such as the International Competition Network, UNCTAD, and the OECD, and 
regionally in the ASEAN Experts Group on C ompetition, the East Asia Top Level Officials' Meeting on 
Competition Policy, and the APEC Competition Policy and Law Group. The MyCC has staff exchange 
programmes with other competition agencies.  
3.88.  Although the MyCC is empowered to initiate investigations ex officio , the great majority of the 
investigations are carried out on the basis of complaints.98 Their number has been rising consistently, 
which is taken as evidence of increasing public awareness of competition issues and the existence 
of the MyCC (Tabl e 3.12). In several instances, companies have recently been fined for price fixing 
or bid rigging. Enterprises found to be infringing the Competition Act risk financial penalties 
equivalent up to 10% of their worldwide turnover. In the course of determinin g the financial penalty, 
the MyCC considers several parameters such as the gravity of the infringement, its nature, its actual 
impact on the market, and the size of the relevant geographic market. It will be increased to take 
account of aggravating circums tances and reduced by extenuating circumstances. Other remedies 
may also be imposed. The final decisions of the MyCC may be brought before the Competition Appeal 
Tribunal.  
 
96 The guidelines may be accessed at: 
https://www.mycc.gov.my/sites/default/files/pdf/newsroom/WJW013224%20Teks%20%282%29.pdf .  
97 The activities concerned are regulated under the Communications and M ultimedia Act  1988, the 
Energy  Commission Act  2001, the Petroleum Development Act  1974, the Petroleum Regulations  1974, and the 
Malaysian Aviation Commission Act  2015.  
98 The Minister of Domestic Trade and Consumer Affairs may also direct the MyCC to condu ct formal 
investigations of alleged infringements of Malaysia's competition legislation.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 3.12 Complaints, investigations , and findings, 2016 -19 
(Number)  
 2016  2017  2018  2019  
Complaints  51 64 138 163 
Investigations  6 .. .. .. 
Infringements  2 .. .. .. 
Non-infringements  1 .. .. .. 
.. Not available.  
Source:  Information provided by the authorities.  
3.89.  Besides the activities described above, in 2019 the MyCC approved a block exemption for 
vessel -sharing agreements in the shipping industry following a nine -month in -depth evaluation. It 
also conducted a market review of five food sectors in 2019, wholesale  and retail trade in selected 
consumer products in 2020, and logistics services and motor vehicle warranty restrictions in 2021. 
The MyCC is on the verge of reviewing the renewal application of the block exemption for vessel 
sharing agreements in respect o f liner shipping services. The MyCC is working closely with the 
Government under the Pasukan Khas Jihad Tangani Inflasi  in restoring effective competition in the 
medium to long term. This is essential to ensure that the economic recovery is rapid and consi stent, 
ensuring vibrant economic activity.  
3.3.4.2   Consumer protection and price controls  
3.90.  Wheat flour and cooking oil are subsidized and subject to ceiling prices set by the Government 
pursuant to the Control of Supplies Act  1961. In addition, all retailers in the se goods (and sugar) 
must hold a licence issued by the Ministry of Domestic Trade and Consumer Affairs . In implementing 
the Price Control and Anti -Profiteering Act  2011, the Ministry of Domestic Trade and Consumer 
Affairs  controls the prices of refined whi te sugar, liquid petroleum gas, petrol (R ON95), diesel, face 
masks, and goods falling under the Festive Season Price Control Scheme.  
3.91.  The Price Control and Anti -Profiteering (Mechanism to Determine Unreasonably High Profit) 
Regulations were revised in 2018,  extending its scope from food, beverages, and household goods 
to any goods or services sold or offered for sale. The Regulations provide a specific formula to 
determine unreasonably high margins. The obligation of retailers to display their sales prices 
appropriately were tightened through the Price Control and Anti -Profiteering (Price Marking for 
Goods and Charges for Services) Order  2020, which entered into force on 15  November  2020.  
3.3.5   State trading, state -owned enterprises, and privatization  
3.92.  The Governmen t embarked on a privatization programme in 1983, but later revised its 
approach in the direction of private finance initiatives. More than 800  projects have been 
implemented over the years to mobilize private capital for infrastructure development and 
investments in health, education, and security.  
3.93.  Malaysia has a large number of GLCs, i.e.  enterprises with a primary commercial objective, 
that are owned through GLICs. The MOF defines seven entities as GLICs, namely the Minister of 
Finance (Incorporated), Kha zanah Nasional Berhad (the Government's sovereign wealth fund), the 
Employees Provident Fund, Lembaga Tabung Haji, the Armed Forces Fund Board, the Retirement 
Fund (Incorporated), and Permodalan Nasional Berhad. Malaysian GLCs are present in utilities, 
banking and finance, and telecommunications. Partly state -owned GLCs are estimated to make up 
about 25% of the market capitalization of the Bursa Malaysia.  
3.94.  The Government launched a transformation programme in 2004 -05 to make GLCs more 
resilient and competiti ve. The programme was completed in July  2015, and the Putrajaya Committee 
on GLC High Performance concluded that the GLCs had a good track record in financial performance, 
as nation builders, and in providing benefits to all stakeholders. Ten initiatives w ere launched under 
the GLC transformation programme, including enhancing the effectiveness of GLC boards, and 
improving the regulatory environment and procurement best practices. On  12 August  2021, the 
Government launched PERKUKUH (Perkukuh Pelaburan Rakya t) or the "Strengthening of the 
People's Investment Programme" consisting of 20  key initiatives. PERKUKUH is designed to 
transform GLICs strategically for enhanced resilience and socio -economic impact. All "Government WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Interest Companies", includ ing GLCs, h ave been required to establish Integrity and Governance 
Units since 2017.  
3.95.  Malaysia has notified to the Working Party on State Trading Enterprises (STEs) one entity that 
it considers may fall within the WTO definition of an STE: Padiberas Nasional Berhad (B ERNAS). 
BERNAS is granted the right to import rice into Malaysia for a period of 10  years (from 2021 to  2031). 
This right is subject to compliance with Malaysia's obligations under WTO  agreements or other 
international treaties and agreements entered into or to be entered into by Malaysia. The most 
recent notification provides data on BERNAS imports of rice until 2020 (inclusive).99 BERNAS is not 
involved in exportation of rice from Malaysia.  
3.3.6   Government procurement  
3.96.  Except for certain common user items, gove rnment procurement is decentralized in Malaysia. 
Hence, goods, services, and works are purchased by entities at federal, state, and local levels. At 
the federal level, financial authority is vested in the Minister of Finance and the Secretary -General 
of the MOF operates as instructed by the Minister. The Chief Ministers supervise procurement in their 
respective states, giving direction to their state financial officers. At the local level, financial authority 
lies with the chairpersons, council s, or boards of directors of the local authorities or statutory bodies. 
At the MOF, the Government Procurement Division concludes contracts for the central purchase of 
certain common goods and services (e.g.  loose furniture, envelopes, and courier services ) through 
open local or negotiated tenders, in which case federal and state ministries and departments 
requiring such items must purchase them from the centrally appointed suppliers (via direct purchase 
or open bidding). Users are informed of the effective  central contracts through federal central 
contract circulars.  
3.97.  The Financial Procedure Act  1957 (as revised in 1972), which provides for the control and 
management of public finances, is the main legal instrument regulating government procurement. 
Other pieces of legislation, such as the Government Contract Act  1949 (as revised in 1973), the 
Ministerial Functions Act  1969, and the Delegation of Powers Act  1956, are also relevant, as they 
define the powers of ministers to enter into contracts on behalf of th e Government or delegate their 
authority to government officers. Treasury instructions stipulate the specific financial and accounting 
procedures to be followed in the management of public funds, and treasury circular letters are issued 
on occasion to clar ify or improve policies, rules, and procedures. In particular, the 1Treasury 
Circulars (1Pekeliling Perbendaharaan (1PP)) detail government procurement procedures and 
conditions.100 The Government Green Procurement Guideline 3.0, published in October  2020, 
consists of 40 groups of selected green products and services.101 
3.98.  Although price considerations may be important in concluding a government contract, the 
"value for money" concept i ncludes non -price factors as well as broader policy considerations such 
as the acceleration of economic growth through procurement, maximum use of local materials and 
resources, the promotion of local freight and insurance, transfer of technology, and ince ntives for 
indigenous entrepreneurs (Bumiputera). Bumiputera suppliers benefit from a preference margin 
of 2.5% to 10%, inversely proportional to value, for goods and services contracts valued at 
MYR 100,000 to MYR  15 million, while they receive no prefere nces for contracts above 
MYR 15 million. For goods made locally by Bumiputera manufacturers, the preference margin is 10% 
for contracts below MYR  10 million, up to 5% for contracts between MYR  10 million to 
MYR 100 million, and 3% above MYR  100 million. In ternational tenders are only opened if the goods 
or services are not available in the local market.  
3.99.  All individuals and enterprises intending to do business with the Government must register 
with the relevant authorities, i.e.  the MOF for goods and service s and the CIDB for works, to obtain 
their Contractor Registration Certificate (PPK) and Government Procurement for Works Certificate 
(SPKK). In addition, enterprises may apply for Bumiputera status with the Works Contractors 
Services Centre (PKK), if neces sary. Construction and electrical contractors are registered separately 
for works. Penalties for non -compliance or substandard performance include the suspension of 
registration for up to five  years, thus effectively barring opportunities to compete for go vernment 
contracts as long as the suspension lasts. Exemption from registration exists under certain 
 
99 WTO document G/STR/N/17/MYS, G/STR/N/18/MYS, 15  October  2021.  
100 The website https://ppp.treasury.gov.my/  provides infor mation in Malay  language.  
101 The guideline may be accessed at www.myhijau.my .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  circumstances, subject to approval of MOF/CIDB, but the provision of tender deposits may not be 
waived for international bidders. While registered local su ppliers and contractors are exempted from 
the tender deposit requirements, these range from MYR  60,000 to MYR  1 million for foreign bidders. 
In addition, successful bidders will need to provide performance bonds issued by financial institutions 
licensed to  operate in Malaysia.  
3.100.   The procedures stipulate that direct purchase may be applied for procurement of supplies 
(goods) and services, as well as works, valued at less than MYR  20,000. The supplies and services 
may be purchased by Government Order from known  suppliers, though no prior registration is 
required. For works, the contractors must be registered with the PKK or CIDB. For supplies, services 
and works above the threshold values for direct purchase up to MYR  500,000 a minimum of 
three/five quotations w ill be needed, and all potential suppliers or contractors must be registered. 
For requisition works (small works that do not involve the structure) valued from MYR  20,000 to 
MYR 50,000, the selection of contractor may be through voting or rotation. Procure ment valued at 
MYR 500,000 or more is subject to tendering.  
3.101.   Tender specifications are worked out by technical committees and detailed in tender 
documents that may be purchased by prospective bidders. Invitations to tender may be found at 
the government web site ( http://www.malaysia.gov.my/ ), the e -procurement platform 
MyPROCUREMENT ( http://myprocurement.treasury.gov.my ), or at the websites of the procuring 
entities. Tender opening committees made up senior government officials open the bids and rank 
them according to the prices quoted. The bids are evaluated on financial and technical grounds by 
separate committees and forwarded to the agency procurement boards fo r decision. At the federal 
level, procurement boards that include a representative of the MOF may decide on procurements up 
to MYR  50 million (supplies and services) or MYR  100 million (works). The boards do not need to 
include an MOF representative if the  tender is less than MYR  20 million. The procurement boards 
forward their recommendations for tenders above the MYR  50/100  million thresholds to the MOF for 
final decision. Board decisions that are not unanimous are also left for MOF decision.  
3.102.   Integrity Pa cts, i.e.  commitments between the procuring authorities and the bidders to 
respect the integrity of the procurement process, were introduced in 2010 to strengthen the 
procurement framework at federal and state levels. Integrity Pacts include sanctions for 
non-compliance, but there is no overall monitoring system. Various model Integrity Pacts exist, 
including for procurements of  GLCs. Integrity Pacts are implemented to increase an agency's level 
of awareness about corruption among the parties involved in go vernment procurement. For 
monitoring purposes, agencies are currently required to submit monthly reports to the MOF to be 
coordinated before submission to the National Governance, Integrity and Anti -Corruption Centre.  
3.103.   Tender decisions and information abou t the winning bidders are announced at the websites 
of the procuring agencies and at the MyPROCUREMENT portal. Moreover, the ePerolehan (eP) 
system, a web -based electronic government procurement system developed and operated by 
Commerce Dot Com Sdn Bhd (CD CSB) under the concession agreement "In relation to the supply 
of the NextGen Electronic Procurement Services (NextGen ePerolehan)", has been in operation since 
1 January  2018 to enable the Government to procure supplies and services from suppliers registe red 
with the MOF. Unsuccessful bidders may lodge complaints with the procuring agency or appeal to 
the Public Complaints Bureau, the Anti -Corruption Commission, or the MOF. A taskforce may be 
established to investigate complaints. Any party that receives a  complaint may recommend 
appropriate action to the relevant ministry/department based on the results of the investigation 
carried out.  
3.104.   Measured in terms of contract value, most procurements take place at the federal level 
(Table  3.13). Procurement for fede ral government development expenditures rose more than 20% 
from 2020 to 2021.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 3.13 Government procurement value by public sector, 2019 -21 
(MYR million)  
Types of procurement  2019  2020  2021a 
Federal government  
a) goods and services expenditure  
b) development expenditure   
31,507  
54,173   
29,323  
51,360   
23,265a 
62,000a 
State government development expenditure  11,051  9,782  11,996a 
Local government development expenditure  2,550  1,855  1,250a 
Statutory bodies' development expenditure  2,472  1,891  2,666a 
Total  101,753  94,211  101,177  
a Estimate.  
Source:  The Malaysian authorities' estimates, based on the M OF, Fiscal Outlook 2022 , Statistical Tables  1.1, 
3.1, 6.2, 6.3, and 6.4, published on 29  October  2021. Viewed at: www.treasury.gov.my . 
3.105.   Malaysia implements its offset policy through the Industrial Collaboration Programme (ICP), 
which co vers defence and non -defence procurements. The Technology Depository Agency (TDA) 
within the MOF oversees the ICP. Nearly 800  projects have been established to date in 14  sectors. 
These projects represent a procurement value of some MYR  107 billion since t he programme's 
inception. For maintenance, repair, and overhaul contracts, a new Performance Based Contract 
(PBC) Policy came into effect on 1  July 2022. Although there is no direct relationship between the 
two programmes, the TDA plays an important role a s it has been assigned to be the centre of 
reference for implementation of the PBC.  
3.106.   Malaysia signed the United Nations Convention Against Corruption in 2003. It adopted the 
APEC Non -Binding Principles on Government Procurement, endorsed by APEC leaders in 1999, and 
participates actively in the APEC Government Procurement Experts Group. Malaysia has been an 
observer to the WTO Committee on Government Procurement since 2012. However, no move to 
initiate negotiations to join the WTO GPA has been taken nor does one appear to be forthcoming. 
An assessment is to be carried out on the implementation of government procurement chapter 
obligations under other international agreements involving market access offers.  
3.3.7   Intellectual property rights  
3.107.   Malaysia became a member  of the World Intellectual Property Organization (WIPO) on 
1 January  1989 and has joined a number of WIPO -administered treaties since then. Most recently, 
Malaysia has acceded to the Madrid Protocol, the Marrakesh VIP Treaty, and the Budapest Treaty 
(Table  3.14). Malaysia considers its accessions to the Patent Co -operation Treaty and the Madrid 
Protocol sufficient means to streamline patent and trademark application procedures, and therefore 
has no plans to join the Patent Law Treaty or the Singapore Treaty  on the Law on Trademarks. 
Regarding membership in the International Union for the Protection of New Varieties of Plants 
(UPOV), Malaysia's Protection of New Plant Varieties Act  2004 (Act  634) is undergoing amendments 
to make it compatible with the 1991  Act of the UPOV Convention. Malaysia is planning to accede to 
the Locarno Agreement Establishing an International Classification for Industrial Designs. A 
cost-benefit analysis on accession to the Hague Agreement is also to be conducted.  
Table 3.14 WIPO -administered treaties  
WIPO -administered treaties  Date of entry into 
force for Malaysia  
Budapest Treaty on the International Recognition of the Deposit of Microorganisms for 
the Purposes of Patent Procedure  30/06/2022  
Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, 
Visually Impaired or Otherwise Print Disabled  30/06/2022  
Protocol Relating to the Madrid Agreement Concerning the International Registration of 
Marks  27/12/2019  
WIPO Copyright Treaty  27/12/2012  
WIPO Performance and Phonograms Treaty  27/12/2012  
Nice Agreement Concerning the Intellectual Classification of Goods and Services for the 
Purposes of the Registration of Marks  28/09/2007  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  WIPO -administered treaties  Date of entry into 
force for Malaysia  
Vienna Agreement Establishing an International Classification of the Figurative Elements 
of Marks  28/09/2007  
Patent Co -operation Treaty  16/08/2006  
Berne Convention for the Protection of Literary and Artistic Works  01/10/1990  
Convention Establishing the World Intellectual Property Organization  01/01/1989  
Paris Convention for the Protection of Industrial Property  01/01/1989  
Source:  WIPO, WIPO -Administered Treaties . Viewed at: 
https://wipolex.wipo.int/en/treaties/ShowResults?code=MY . 
3.108.   Intellectual property (IP) is among the subjects addressed in the RCEP, although the 
agreement recognizes the different nationa l systems and levels of development and capacity. The 
IPR chapter of RCEP incorporates many concepts established in the WTO TRIPS  Agreement and the 
CPTPP. The CPTPP chapter on IP is comprehensive and encompasses nearly all areas of rights and 
enforcement. However, certain provisions included in its forerunner  (the TPP) have been suspended, 
particularly those concerning the protection of undisclosed data for pharmaceutical patents, 
copyright, protection of encrypted programme -carrying satellite and cable sig nals, and Internet 
service provider liability. As noted in the 2018 Secretariat report, some of Malaysia's ASEAN and 
bilateral agreements include IP -related provisions, i.e.  those with Japan, India, Pakistan, Australia, 
New Zealand, Chile, and Türkiye.  
3.109.   Malaysia's legal framework for IP protection underwent a number of changes in the review 
period. Notably, a new Trade Mark Act and new trademark regulations were promulgated in  2019, 
a new Geographical Act and Geographical Indications Regulations in 2022, and  amendments 
affecting patent and copyright legislation (Table  3.15).  
Table 3.15 Overview of IPR protection provided by Malaysia's legislation, 2022  
Subject/legislation  Coverage  Duration  Developments since 2017  
Patents  
Patents Act  1983, as 
amended, and the 
Patent Regulations  Inventions susceptible 
of industrial 
application; utility 
innovations do not 
need to satisfy test of 
inventiveness  20 years from the 
application filing date; 
10 years (renewable 
for 2 additional 
consecutive 5 -year 
terms) from the date 
of filing for utility 
innovation  Amended in 2022 to (i)  accede to the 
Budapest Treaty; (ii)  adopt 
Article  31bis of the TRIPS  Agreement; 
(iii) introduce third -party observation; 
(iv) allow recordation of IP 
transactions; (v)  introduce IP Official 
Journal as medium of publication; and 
(vi) introduce post -grant opposition.  
The amendments entered into force on 
18 March  2022 except for the 
provisions on the Budapest Treaty 
(30 June 2022) and post -grant 
opposit ion (not yet in force)  
Plant varieties  
Protection of New Plant 
Varieties Act  2004 
(Act 634) and the 
Protection of New Plant 
Varieties 
Regulations  2008 Plant varieties that are 
new, distinct, uniform, 
and stable  20 years from the 
filing date of the 
application, 25  years 
for trees and 
vines/perennial 
plants; 15  years from 
the date of application 
for a plant variety 
bred or discovered 
and developed by a 
local community or 
indigenous people   
Industrial Designs  
Industrial Designs 
Act 1996 (Act 552), as 
amended, and 
Industrial Designs 
Regulations  1999, as 
amended  Features of shape, 
configuration, pattern, 
or ornament applied to 
an article that appeals 
to the eye  Initial protection 
period of 5  years, 
extendable for a 
further 4 consecutive 
terms, with a 
maximum protection 
period of 25  years  No amendment since 2017  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Subject/legislation  Coverage  Duration  Developments since 2017  
Trademarks  
Trade Marks Act  2019 
(Act 815) and the 
Trade Marks 
Regulations  2019 Signs that are capable 
of distinguishing the 
goods or services of 
the trademark holder 
from others. 
Registration available 
for ordinary 
trademarks, collective 
marks, and 
certification marks.  Protection for 
10 years from the 
date of registration; 
renewable  indefinitely 
for periods of 10  years  New Act and regulations promulgated 
in 2019 to (i)  accede to the Madrid 
Protocol; (ii)  extend the scope of 
protection to non -traditional marks 
(sound, smell, 3D, and motion); 
(iii) introduce stringent penalties for 
infringements; (iv)  provide clearer 
ground for refusal; (v)  allow electronic 
filings; (vi)  introduce the IP Official 
Journal; (vii)  allow recordation of IP 
transactions; and (viii)  introduce 
collective mark and certification mark  
Copyright  
Copyright Act  1987 
(Act 332), as amended  Literary works, artistic 
works, musical works, 
film, sound 
recordings, broadcasts 
and derivative works  Life of the author plus 
50 years for literary, 
musical and artistic 
works; 50  years from 
date of publication or 
fixation for film  and 
sound recording; and 
50 years from the 
date of first broadcast. 
Registration is not 
required for a 
copyright to be 
protected. Copyright 
owners may 
voluntarily notify and 
deposit a copy of the 
work eligible for 
copyright with MyIPO  Amended in 2022 to ( i) accede to the 
Marrakesh Treaty; (ii)  allow members 
of a collective management 
organization to refer disputes to the 
Copyright Tribunal; (iii)  introduce 
provisions on collective management 
organization governance; 
(iv) introduce ex officio  act to search 
and seize relating to importation of 
infringing goods; and (v)  introduce 
offences relating to streaming 
technology  
Geographical 
indications (GIs)  
Geographical 
Indications Act  2022 
(Act 836) and the 
Geographical 
Indications 
Regulations  2022 GIs for agricultural 
products, industrial 
products, and 
handicrafts. Foreign 
GIs must be protected 
and in use in the 
country/territory of 
origin  10 years from the 
date of filing for 
registered 
geographical 
indications, renewable 
indefinitely for  
10-year periods  New Act and regulations promulgated 
in 2022 to (i)  provide higher standard 
of protection for registered GIs; 
(ii) introduce stringent penalties for 
infringement; (iii)  provide clearer 
grounds for refusal; (iv)  introduce 
electronic filing; (v)  introduce the 
IP Official Journal; and (vi)  introduce 
provisions on investigation and 
enforcement  
Layout -designs of 
integrated circuits  
Layout -Designs of 
Integrated Circuits 
Act 2000 (Act  601)  Three -dimensional 
disposition of the 
elements of an 
integrated circuit and 
some or all of its 
interconnections  10 years from the 
date the layout -design 
is first commercially 
exploited anywhere in 
the world, 15  years 
after the date the 
layout -design is 
created, 
notwithstanding the 
commercial 
exploitation  No amendment since 2017  
Undisclosed 
information  
Directive on Data 
Exclusivity  The Directive is to 
protect the 
undisclosed, 
unpublished , and 
non-public domain 
pharmaceutical test 
data Undisclosed data for 
pharmaceuticals 
containing new 
chemical entities is 
protected for five 
years ; second 
indications for 
three  years for small 
molecules  Under the purview of the National 
Pharmaceutical Regulatory Agency, 
Ministry of Health. The Directive is 
available at: 
https://www.npra.gov.my/images/reg -
info/DataEx/Directive_on_DE.pdf   
Source:  Compiled by WTO Secretariat, based on information provided by the authorities.  
3.110.   Legislation on trade secrets is based on English law, and Malaysia has no formal registration 
process for confidential information or trade secrets. Breaches of confidence are generally actionable 
in courts provided (i)  the information is confidential; (ii)  the information is disclosed in circumstances 
that affect the confidentiality; and (iii)  unauth orized use or further disclosure is taking place or may 
be anticipated.  
3.111.   The Minister of Domestic Trade and Consumer Affairs is the minister in charge of IP in 
Malaysia. The Intellectual Property Corporation of Malaysia (MyIPO), an agency under the Ministry , 
is responsible for the development and management of industrial property rights. It has given WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  priority to the quality and efficiency of the search and examination process for the granting of 
patents, industrial designs, trademarks, and geographical indic ations. Malaysia encourages domestic 
companies to acquire industrial property rights. Tax deductions are accorded to companies (with 
minimum 70% domestic ownership) for costs in acquiring IP from foreign right holders. Under the 
IP Monetization Roadmap  2015-2020, focus has been on IP as assets with financial value and 
returns, building on the IPR Marketplace Portal launched in June  2014 to facilitate IP owners' ability 
to raise income by sale, licensing, merchandising, and/or franchising of their rights to prospective 
buyers. Malaysia introduced the Intellectual Property Filing Fund under the Eleventh Plan and the 
initiative continues for another five  years under the Twelfth  Malaysia Plan, 2021 -2025 
(Twelfth  Plan). The objective of this initiative is to assi st entrepreneurs, youth, and students to 
protect their IP as well as to increase the number of local applications.  
3.112.   Copyright legislation also comes under the authority of the Minister of Domestic Trade and 
Consumer Affairs. The Copyright Act  1987 is under the purview of MyIPO and the Director General 
of MyIPO is the Controller of Copyright. However, investigation, seiz ure of infringing copies, 
prosecution, and other enforcement -related actions are under the Ministry's Enforcement Division 
based on the delegation of authority given by the Controller of Copyright. The Copyright Tribunal, 
an alternative forum for intereste d persons to apply for certain uses of copyrighted works or claiming 
relief, is administered by MyIPO. However, the Copyright Tribunal has not heard any cases thus far. 
IP cases are under the purview of the Judicial Body. Rights under the New Plant Varieti es Act  2004 
are administered by the MAFI.  
3.113.   Except for utility models, non -residents account for the majority of applications and 
registrations of industrial property (Table  3.16). The United  States, China, and Japan are leading 
home countries of the entitie s filing for IP protection in Malaysia. Applications for protection of 
literary and artistic works dominate as they constitute more than 90% of the total number of filings. 
Transition to a new IT system in 2019 caused a decline in the number of patent regi strations. As for 
copyright, nearly 40,000  applications for voluntary notification were recorded between 2012 
and 2020. The rising trend in filings was broken in 2020 when MCOs  required MyIPO's staff to work 
from home. MyIPO used this opportunity to set up  a special taskforce to increase productivity in 
issuing patent grants.  
Table 3.16 Intellectual property statistics, 2017 -20 
 Residentsa Non-residentsa Abroada 
Patent applications  
2017 1,166  5,906  982 
2018 1,116  6,179  944 
2019 1,071  6,480  1,070  
2020 989 5,839  934 
Patent grants  
2017 437 4,626  514 
2018 449 3,818  516 
2019 565 3,541  597 
2020 1,147  7,059  570 
Utility model applications  
2017 134 72 45 
2018 132 66 36 
2019 111 81 49 
2020 121 66 58 
Trademark applications  
2017 19,481  21,612  9,501  
2018 19,863  23,793  11,070  
2019 22,485  24,219  10,349  
2020 18,414  26,872  11,275  
Trademark registrations  
2017 12,977  20,248  7,641  
2018 13,804  20,762  8,323  
2019 7,795  11,705  9,457  
2020 10,756  32,558  10,241  
Industrial design applications  
2017 517 1,297  500 
2018 528 1,317  445 
2019 574 1,330  340 
2020 575 1,126  649 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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   Residentsa Non-residentsa Abroada 
Industrial design registrations  
2017 499 880 308 
2018 405 1,070  542 
2019 337 901 278 
2020 327 939 616 
GI applications  
2017 2 1 .. 
2018 4 0 .. 
2019 4 5 .. 
2020 6 3 .. 
GI registrations  
2017 5 0 .. 
2018 5 0 .. 
2019 1 0 .. 
2020 10 3 .. 
.. Not available.  
a A resident filing refers to an application filed in Malaysia by a Malaysian resident; a non -resident 
filing refers to an application filed by a foreign applicant; an abroad filing refers to an application 
filed by a Malaysian resident at a foreign office.  
Source:  WIPO, Statistical Country Profiles: Malaysia . Viewed at: 
https://www.wipo.int/ipstats/en/statistics/country_profile/profile.jsp?code=MY  [Last updated 
11/2021]; and MyIPO, Statistical Booklet 2020  (for GIs). Viewed at: 
https://drive.google.com/file/d/1k7iWRJ9eXqZ_RNNV69Bf5ZTppdgbjuNs/view . 
3.114.   Music Rights Malaysia Berhad (MRM) was established in 2017 to serve as a centralized 
licensing body and collection society for royalties due to authors, producers of sound recordings, and 
performers in the music industry. However, it appears that MRM struggled to function properly, and 
it was therefore decided to dissolve MRM in July  2020. Henceforth, the administration of the licensing 
of music rights has reverted to the respective col lective management organizations for music 
authors, public performers, and sound recorders.  
3.115.   The responsibility for IPR enforcement in Malaysia rests with the Ministry of Domestic Trade 
and Consumer Affairs . Although efforts to protect IP have been stepped up over the years, 
infringement of IPRs, particularly the counterfeiting of goods, is still not uncommon. Complaints may 
be addressed to the Ministry's Enforcement Division, whose officers have extensive powers to search 
for and seize infringing good and m aterials as well as arresting persons suspected of IPR violations. 
Investigations determine whether or not criminal proceedings may be initiated. A Special Taskforce 
Combating Counterfeit Goods brings together the various stakeholders, including trademark owners, 
to give direction to the enforcement activities. Twenty -eight agencies and industries representing 
trademark and copyright owners participated at the taskforce's annual meeting held in 
September  2022.  
3.116.   Initiatives taken by the Ministry to protect IP Rs include (i)  the establishment of a Cyber 
Copyright Enforcement platform (CYCore) to collaborate with local film copyright owners to combat 
digital piracy distribution via the Internet (since 2020, 219 links have been blocked under this 
programme in rela tion to 26 films); (ii)  Landlord Liability, a preventive measure whereby warning 
notices are issued to landlords and building management to ensure that their premises are not used 
as sales and distribution centres for counterfeit and pirated goods (more th an 400 notices were 
issued in 2022); and (iii)  the Basket of Brands (BOB), a collaboration with registered trademark 
owners to expedite enforcement actions and assist in the completion of investigations. In all, 
176 brands comprising 733 trademark details have been registered under BOB. In 2021, 295 cases 
were established as a result of raids by the Enforcement Division. The value of the seized counterfeit 
products was MYR  10.6 million.  
3.117.   At the border, the Ministry works with other enforcement agencies such as the Malaysian 
Armed Forces, Malaysian Maritime Enforcement Agency, Marine Police, and Malaysia Border Control 
Agency to combat smuggling and trade in counterfeit goods. The border agencies collaborate in 
training activities to identify counterfeit and p irated goods and the modus operandi  of counterfeit 
activities. Customs officials may ex officio  detain or suspend the release of goods deemed to be 
infringing IPRs. RMCD does not maintain data on seizures of counterfeit goods at the border. The 
Ministry ha s not received or taken cases involving counterfeit goods at the border in recent years. 
Online purchases became more popular during the COVID -19 pandemic, and the Ministry initiated 
579 removals of content between 1  January and 31  August  2022.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  3.118.   In addition  to criminal action, IP owners may resort to civil remedies to safeguard their rights 
under the Copyright Act  1987, the Trademarks Act  2019, the Trade Description Act  2011, and the 
Geographical Indications Act 2022. Six  High Courts with civil and appellate  jurisdictions were 
established in 2007. In addition, Malaysia has 15  Session Courts with criminal jurisdiction to uphold 
IPRs. Appeals may be brought before the Court of Appeals and, in limited instances, before the 
Federal Court. Statistics for IP cases may be obtained from the official portal of the Office of the 
Chief Registrar, Federal Court of Malaysia ( https://www.kehakiman.gov.my/en/annual -report -
judiciary ). WT/TPR/S/436 /Rev.1  • Malaysia  
 
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4  TRADE POLICIES BY SECTOR  
4.1  Agriculture, Forestry, and Fisheries  
4.1.1   Agriculture  
4.1.1.1   Overview  
4.1.  Agriculture, including forestry/logging and fishing, accounted for 7.1% of GDP (at constant 
2015 prices) and 10.3% of total employment in 2021. Palm oil remains by far the l eading subsector. 
In 2020, Malaysia was the world's 2nd-largest producer of palm oil , the 7th-largest of natural rubber 
and pepper, and the 10th-largest of coconuts.1 Although the sector's growth performance was flat 
overall over the review period (2017 -21), some smaller subsectors such as vegetables, fruits, and 
livestock grew at around 5% annually2 (Chart  4.1). 
Chart 4.1 Structure of the agriculture sector  
 
 
Source:  WTO Secretariat calculations, based on Department of Statistics Malaysia (2022), Annual Gross Domestic 
Production , 2015 -21, May, and UN Comtrade database.  
4.2.  Agricultural output dec lined in 2020 and 2021 due to the COVID -19 pandemic. The 
Government's Movement Control Order (MCO), inter alia, involved the closure of Malaysia's 
borders  and caused a shortage of foreign labourers on plantations, particularly in the oil palm 
subsector, wh ich relies heavily on foreign workers (around 76% of the oil palm plantation workforce 
 
1 FAO, FAOStat . Viewed at: https://www.fao.org/faostat/en/#home .  
2 Subsectors such as vegetables, fruits, and livestock grew at 9.6%, 7.9%, and 3.2%, respectively, at 
constant 2015 prices from 2020 to 2021.  
-2.4%4.5%
2.2%
-8.1%6.4%
-2.3%4.8%
-10.1%1.9%
-0.2%
-12.0%-10.0%-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%6.0%8.0%
0%5%10%15%20%25%30%35%40%45%
Palm oil
Livestock
Other
agriculture
Forestry and
logging
Vegetables
Fishing and
aquaculture
Fruits
Rubber
Paddy
2017
2021
Growth rate by subsector p.a. 2017-21
Overall agricultural growth rate p.a. 2017-2105101520253035
2017 2018 2019 2020 2021Trade balance
Imports
Exports of other agricultural products
Exports of palm oil and its fractions(USD billion)Trade balance
(% of total GDP agriculture at basic 2015 constant prices)GDP of the agriculture sector
by type of economic activityWT/TPR/S/436 /Rev.1  • Malaysia  
 
- 75 - 
 
  in 2017 -203). In addition, the MCO led to reduced demand for agricultural products from the hotel, 
tourism, and food industries.4 Various measures were put in place to  mitigate the negative impact.  
4.3.  Malaysia is a net exporter of agricultural products and the trade surplus is widening.5 In 2021, 
the trade surplus amounted to USD  11.4 billion, with exports of USD  32.1 billion and imports of 
USD 20.7 billion (Chart  4.1 and  Table  A4.1). Trade in agricultural goods accounted for 10.7% of 
total merchandise exports and 8.7% of total imports in 2021. Malaysia's agricultural exports during 
the period 2017 -21 were dominated by palm oil (41.2%), followed by industrial monocarboxyli c fatty 
acids and palm fatty acids (9.3%), and vegetables fats and oils (7.3%). The principal agricultural 
imports were cocoa beans (5.3%), maize (5.1%), and sugar (4.7%). Major export markets are 
China, EU -27, and Singapore. For imports, the main sources are Indonesia, China, and Thailand.  
4.1.1.2   Agricultural policies  
4.4.  A number of ministries and government agencies hold responsibilities for agricultural policy. 
The Ministry of Agriculture and Food Industries (MAFI) formulates and designs agricultural policies, 
strategies, and programmes including for the agrofood and agro -business sectors.6 The Ministry of 
Plantation Industries and Commodities (MPIC) oversees the development of plantations and 
industries for palm oil, rubber, timber, cocoa, pepper, kenaf, and biof uel. Under the MPIC, several  
agencies are responsible for product -by-product implementation of policy and the provision of 
services, including the Malaysian Palm Oil Board (MPOB), the Malaysian Rubber Board (MRB), and 
the Malaysian Palm Oil Council (MPOC).7 
4.5.  Malaysia's agricultural policy is based on several documents, including the National Agrofood 
Policy 2021 -2030 (NAP  2.0), the National Agricommodity Policy  2021-2030 (DAKN  2030), and the 
Twelfth Malaysia Plan, 2021 -2025 (Twelfth Plan). The NAP  2.0, whic h replaced the NAP (2011 -2020), 
focuses on modern technology in the agrofood subsector to attain higher productivity and enhanced 
food security.8 Policy objectives include (i)  improving quality of life for food producers; (ii)  increasing 
productivity; (ii i)  establishing high value -added activities; (iv)  improving food safety; (v)  embracing 
greater economic, social, and spatial inclusiveness; and (vi)  encouraging sustainable consumption 
and production.9 The NAP  2.0 contains five policies to enable these o bjectives: (i)  encouraging 
modernization and smart agriculture; (ii)  strengthening the domestic market and producing 
export -oriented goods; (iii)  developing human capital; (iv)  advancing towards food system 
sustainability; and (v)  establishing business eco systems and governance.10 The NAP  2.0 contains 
specific strategies for paddy and rice, fruit and vegetables, livestock, and fisheries.  
4.6.  Under the responsibility of the MPIC, the DAKN  2030 outlines the direction for the development 
of Malaysia's agricommodit y industry for eight major commodities and related products, i.e.  oil palm, 
rubber, timber, cocoa, pepper, plant -based fibres (including kenaf), biomass (agricommodity 
biomass), and biofuel.11 The DAKN contains five policies setting the direction for the s ector and 
guiding the development of each commodity, with a focus on moving towards sustainable production 
and consumption, accelerating productivity through technology, intensifying production of higher 
 
3 Information provided by the authorities.  
4 Department of Statistics Mala ysia (2021), Selected Agricultural Indicators  2021, p. 19, November.  
5 For the purposes of this section of the report, agricultural products are based on the WTO  Agreement 
on Agriculture; i.e.  HS Chapters 01 -24 less fish and fishery products (HS  Chapters  03, 0508, 0511.91, 
1504.10, 1504.20, 1603 -1605, and 2301.20), plus some selected products (HS  2905.43 -2905.45, 3301, 
3501-3505, 3809.10, 3823, 3824.60, 4101 -4103, 4301, 5001 -5003, 5101 -5103, 5201 -5203, and 5301 -5302).  
6 WTO document WT/TPR/S/366/Rev.1, 25  May 2018; and MPIC, General Info . Viewed at: 
https://www.mpic.gov.my/mpi/en/ .  
7 Under the Ministry, six  agencies lead the development of the commodity sector, including the MPOB, 
the MRB, the Malaysian Timber  Industries Board, the Malaysia Cocoa Board (LKM), the Malaysia Pepper Board 
(MPB), and the National Kenaf and Tobacco Board (NKTB). Five  councils, with a focus on promoting products 
locally and internationally, include the MPOC, the Malaysian Rubber Counc il (MRC), the Malaysian Palm Oil 
Certification Council (MPOCC), the Malaysian Timber Council (MTC), and the Malaysia Timber Certification 
Council (MTCC).  
8 For details of the NAP (2011 -2020), see WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
9 MAFI, Execu tive Summary, National Agr ofood Policy 2021 -2030 (NAP  2.0), 24 October  2021.  
10 MAFI, Executive Summary, National Agr ofood Policy 2021 -2030 (NAP  2.0), 24 October  2021.  
11 MPIC, National Agricommodity Policy 2021 -2030 (DAKN  2030) . WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  value -added products, diversifying markets by levera ging the global supply chain, and ensuring the 
sharing of resources and wealth.12 
4.7.  In line with the NPA  2.0 and the DAKN, the Twelfth Plan aims at reinvigorating and supporting 
downstream agricultural activities. The authorities note that the Government makes its efforts to 
increase production of high value -added products by producing premium agricultural products and 
high-yielding crop varieties and breeds, as well as internationally accepted by -products for 
export -oriented products through te chnology adoption and market -driven R&D activities. The 
Twelfth Plan emphasizes the importance of modernization by encouraging farmers to adopt advanced 
technologies in farm practices, production, and marketing, with the aim of increasing efficiency in 
the operation and production process. Under the strategy of modernization in the sector, the 
Twelfth  Plan states that a smart farming fund is to be established for small farmers and young 
agropreneurs to accelerate the adoption of modern technology in the sec tor. Moreover, the adoption 
of green and sustainable practices such as the Malaysian Agricultural Practices (myGAP) certification, 
the Malaysian Sustainable Palm Oil (MSPO) certification, and the Malaysian Organic (myOrganic) 
certification are to be accele rated.13 
4.1.1.3   Domestic support  
4.8.  Development programmes and incentives are provided for rice, oil palms, and rubber and 
various agricultural activities. Development of rural communications through commodity 
development programmes received the most support (MYR  2.50 billion), followed by rice production 
(MYR 1.53 billion) (Table  4.1). 
Table 4.1 Budgeted expenditures on agricultural programmes, 2022  
(MYR million)  
Support programmes  Amount  
Development of rural communiti es through commodity development programmes  2,500  
FELDA settlers' rehabilitation and development package  1,300  
Initiative for the benefit of FELCRA participants  495 
Smallholder development for rubber industry under RISDA  699 
Providing subsidies and incentives for the agriculture and fisheries industries  1,681  
Rice price subsidy  570 
Rice fertilizer subsidy  383 
Rice seed subsidies  75 
Bukit/Huma rice fertilizer subsidy  40 
Rice production incentives  462 
Fishers catch incentives  151 
Agricultural financing programme by Agrobank and BNM  200 
Monsoon season assistance for 320,000 smallholder farmers  190 
Food supply security  40 
Various food security projects  66 
Food security strengthening programme  20 
Ruminant feed incentive assistance programme  10 
SME techno entrepreneur incentive programme  10 
Smallholder farmers' oil palm replanting stimulus scheme  10 
Addressing international anti -palm oil campaigns  20 
Matching grant for the introduction and expansion of the usage of RRIM Hydrobest 
technology to B40 smallholder farmers  15 
Farmers' Smart Card Takaful Protection Scheme for all Area Farmers Organization 
members  5 
Rubber Transformation Programme  5 
Rubber productivity enhancement programme  15 
Note:  BNM = Bank Negara Malaysia; FELCRA = Federal Land Consolidation and Rehabilitation Authority; 
FELDA = Federal Land Development Authority; RISDA = Rubber Industry Smallholders Development 
Authority.  
Source:  EY (2021), Budget 2022 – Malaysia , Vol. 9, Issue  5, 29 October; and Ministry of Finance, 
Touchpoints: Budget  2022 Measures . Viewed at: 
https://budget.mof.gov.my/pdf/2022/ucapan/touchpoints -en.pdf ; and information provided by the 
authorities.  
 
12 MPIC, National Agricommod ity Policy 2021 -2030 (DAKN  2030) , pp. 42-44. 
13 Economic Planning Unit, Twelfth  Malaysia Plan, 2021 -2025, pp. 2-18–2-19. WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.9.  Malaysia notifies domestic support in accordance with the format and definitions provided  by 
the WTO  Agreement on Agriculture. According to the notifications made during the review period, 
covering the period 2012 -1514, all domestic support was notified either as having no or minimal 
distortive effect on trade (Green Box support) or expenditur es on development programmes 
(Article  6.2 programmes), i.e.  input subsidies to resource -poor farmers.15 The reported Green Box 
support increased from MYR  649 million in 2012 to MYR  749 million in 2015 (Chart  4.2). About 70% 
of all notified Green Box suppor t over the four -year period related to a price subsidy for paddy rice 
described as decoupled income support, and about 20% was outlays on drainage and irrigation 
facilities. A fertilizer subsidy for paddy farmers was reported as Article  6.2 support.  
Chart 4.2 Domestic support in Malaysia, 2012 -15 
 
Source:  WTO documents G/AG/N/MYS/43, G/AG/N/MYS/44, G/AG/N/MYS/45, 21  December  2018; and 
G/AG/N/MYS/53, 8  August  2022.  
4.10.  The state -owned Agrobank  provides financial services to Malaysia's agricultural sector.16 Its 
operations cover farming as well as upstream and downstream activities such as processing, storage, 
marketing, and services.17 The dependence on government funds to depositors' funds for  supporting 
financing activities is at a ratio of 29:71 in 2022. Total outstanding financing balance for the whole 
bank stood at MYR  13,73 9 million in 2021  (Table  4.2). According to the authorities, the average 
profit rate charged for total financing is 5. 17%.  
4.11.  Agrobank administered several government programmes providing finance to the agriculture 
sector during the review period. The funds under various schemes  increased from MYR  1.7 billion in 
2017 to MYR  3.2 billion in 202 1 (Table  4.2). According to the a uthorities, the preferential profit rate 
charged under the government scheme is between 2% to 8%. More than 50% of the total funding 
was provided to the development of the food industry and agriculture -related activities (i.e.  the 
agriculture entrepreneur financing) during the review period, except 2021. A special relief scheme 
for farmers severely affected by the COVID -19 pandemic accounted for approximately 13% and 10% 
of the financing in 2020 and 2021, respectively.  
 
14 WTO documents G/AG/N/MYS/43, G/AG/N/MYS/44, G/AG/N/MYS/45, 21  December  2018; and 
G/AG/N/MYS/53, 8  August  2022.  
15 Malaysia does not have a monetary "Total AMS Commitment" in its Schedule  XXXIX, which means 
that any notified Amber Box support would need to be de minimis .  
16 Agrobank was corporatized in 2008 in accordance with the Bank Pertanian Malaysia Berhad Act 
No. 158 of 2008. The agency has operated officially as a full -fledged Islamic banking institution since 
1 July 2015.  
17 WTO document WT/TPR/S/366/R ev.1, 25  May 2018.  
WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 4.2 Financing scheme operated by Agrobank, 2017 -21 
(MYR million)   
2017  2018  2019  2020  2021  
Total financing excluding Effective Profit Rate (EPR) adjustment  
Total Agrobank financing  9,609.9  10,765.3  11,833.9  13,215.3  13,738.8  
 Oil palm  1,918.2  1,950.4  2,003.6  1,989.7  1,923.3  
 Rubber  282.1  311.6  332.8  360.8  375.7  
 Other crops  2,290.2  2,643.1  2,852.1  3,298.8  3,456.3  
 Fishery  423.8  435.0  582.2  662.0  672.0  
 Forestry  7.6 6.8 7.8 18.9 18.1 
 Livestock  857.1  861.7  916.3  1,019.5  1,005.0  
 Other agro -based processing  743.0  878.0  1,093.0  1,240.7  1,268.0  
 Support sector  3,087.9  3,678.7  4,046.1  4,624.9  5,020.4  
Concessionary financinga      
Total  793.2  771.9  781.2  1,141.8  1,498.5  
 Oil palm  12.8 8.9 5.9 22.4 31.3 
 Rubber  2.7 2.2 1.5 5.6 8.5 
 Other crops  2.3 8.4 2.0 2.5 5.2 
 Fishery  289.8  292.3  310.2  375.0  389.2  
 Forestry  0.6 1.6 0.7 0.7 0.9 
 Livestock  316.7  267.1  248.1  305.7  310.0  
 Other agro -based processing  106.6  102.2  102.7  160.9  177.4  
 Support sector  61.7 89.2 110.1  269.0  576.0  
Financing scheme funds       
TOTAL  1,689.8  1,825.3  1,973.3  2,441.9  3,167.2  
Fund for Food (3F)       
To enhance the food production industry and to 
reduce dependency on imports. Merged with 
DPUP  1 in May  2014.  174.8  192.4  282.5  445.1  539.0  
Oil Palm Replanting Scheme       
To finance the replanting of oil palm plantations  9.0 8.0 7.0 6.0 5.0 
Micro Enterprise Fund       
To increase access to micro financing for 
selected eligible micro entrepreneurs  38.7 42.5 45.8 58.2 85.5 
Commercial Agriculture Fund       
To finance the commercial agro -based industry  186.5  195.2  204.3  213.8  223.7  
Agriculture Entrepreneur Financing  (DPUP)       
Fund 1-7 (DPUP  1-7)b 1,272.5  1,372.6  1,411.2  1,354.8  1,248.0  
Special Relief Facility       
To minimize losses borne by farmers affected by 
flooding in December  2014, and to assist SMEs 
facing short-term cash flow problems due to the 
COVID -19 outbreak in 2020  8.1 5.1 2.8 334.8  303.1  
Fund for Small and Medium Size Industries       
To increase access to micro financing for 
selected eligible small and medium agro -based 
entrepreneurs  0.2 4.8 16.1 25.6 34.7 
Disaster Relief Facility       
To minimize losses borne by farmers affected by 
flooding in December  2017 n.a. 4.7 3.7 3.6 3.7 
Skim Pembiayaan Mikro Penjana  n.a. n.a. n.a. n.a. 317.5  
Targeted Relief and Recovery Facility  n.a. n.a. n.a. n.a. 363.8  
Dana Pembiayaan AgroMakanan  n.a. n.a. n.a. n.a. 43.2 
n.a. Not applicable.  
a Concessionary financing is the financing distributed using funding from the Government, which 
includes government grants and the government financing scheme fund. Preferential profit rates are 
between 2% to 8%.  
b Comprising several funds to enhance food production industry and agriculture -related activities, as 
well as to stimulate growth of farming activities involving upstream and downstream activities.  
Source:  Agrobank, Annual Report , various editions 2018, 2019, and 2020. Viewed at: 
https://www.agrobank.com.my/home/corporate -info/annual -reports/ ; and information provided by 
the authorities.  
4.1.1.4   Border measures  
4.12.  Malaysia applies several trade policy instruments at the border to agricultural products 
including import duties, tariff quotas, surcharges, import and export licensing requirements, and 
export taxes (Section  3.1). In 2022, the simple average applied MFN tariff rate on agricultural 
products (WTO definition) was 7.0% (including AVEs) (Section  3.1.3). About 80% of the agricultural 
tariff lines carried rates of 5% or less; about 66% of the agricultural tariff lines are duty -free. Most 
non-ad valorem  duties are concentrated in the agricultural sector, mainly on fruit, beverages, and WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  tobacco. In addit ion, Malaysia maintains tariff quotas to regulate market access, mainly for  milk, 
poultry meat, and eggs (Section  3.1.3.3).  
4.13.  Malaysia has reserved the right to apply agricultural special safeguards (SSGs) on 48  tariff 
lines at the 10 -digit level (4.2% of to tal agricultural lines).18 SSG lines include meat (swine, poultry, 
and edible meat offal), live poultry, sugar, and milk and cream. According to the most recent 
notification, Malaysia did not invoke any SSGs in 2016.19 To date, Malaysia has never invoked S SG. 
4.1.1.5   Export measures  
4.14.  Malaysia notified the Committee on Agriculture that it had no export subsidy programmes 
subject to reduction commitments during calendar years 2017 -19.20 In line with its "significant 
exporter" status for vegetable oils, Malaysia also notified total exports of its main vegetable oils 
(crude palm oil (CPO), processed palm oil, crude palm kernel oil (CPKO), and processed palm kernel 
oil) in the same period.21 Malaysia levies export taxes on, inter alia, palm oil, rubber planting 
materials, oil seeds, and live animals (Section  3.2.2).  
4.1.1.6   Selected commodities  
4.1.1.6.1   Palm oil  
4.15.  Palm oil remains the most important agricultural commodity, accounting for 66.1% of 
Malaysia's ag ricultural production value in 2020.22 About 73.2% of the oil palm area was owned by 
plantation estates; these estates are vertically integrated enterprises with international operations.23 
The planted area increased steadily until 2019, when the trend rev ersed (Table  4.3). Palm oil is 
processed into a wide range of products including cooking oil and margarine, olein, stearin, refined 
bleached deodorized palm oil (RBDPO) used in cleaning products, and biofuels.24 According to the 
authorities, palm oil -based  biodiesel (biofuel) is manufactured in Malaysia using domestically 
sourced CPO and RBDPO.  
4.16.  CPO production declined by 5.4% during 2020 -21 due to lower processed fresh fruit bunches 
(FFB) arising from lower FFB yield caused by the shortage of foreign labour  in the oil palm plantations 
during the pandemic.25 The pandemic also affected Malaysia's capacity to export palm oil and other 
related products. However, as the CPO price jumped more than 60% from 2020 to  2021, the 
exported value reached a record MYR  108.5 billion in 2021 (Table  4.3). 
Table 4.3 Selected indicators for oil palm, 2016 -21 
 2016  2017  2018  2019  2020  2021  
Value of harvested oil palm fruit  
(MYR million) (FAOStat)  51,277  61,655  46,060  41,806  54,400  .. 
Quantity produced  
('000 tonnes FFB)  86,325  101,740  98,419  99,065  96,969  91,394  
Planted area ('000  ha)a 5,738  5,811  5,849  5,900  5,865  5,738  
of which:        
Estates ('000  ha) 4,804  4,831  4,869  4,914  4,909  4,874  
Smallholdings ('000  ha) 934 980 980 986 956 864 
 
18 WTO document TN/AG/S/29/Rev.1, 11  January  2017; and Malaysia's latest certified schedule from 
WTO CTS database.  
19 WTO document G/AG/N/MYS/38, 4  July 2017.  
20 WTO documents G/AG/N/MYS/46, G/AG/N/MYS/47, and G/AG/N/MYS/48, 28  September  2021. 
21 WTO documents G/AG/2/Add.1, 16  October  1995; and G/AG/N/MYS/49, G/AG/N/MYS/50, and 
G/AG/N/MYS/51, 28  September  2021.  
22 FAO, FAOStat . Viewed at: https://www.fao.org/faostat/en/#data .  
23 Information provided by the authorities.  
24 MPOC and MOCB (2020), Fact Sheets : Malaysian Palm Oil . Viewed at: http://mpoc.org.my/wp -
content/uploads/2020/12/Malaysian -Palm-Oil-Fact-Sheets -2020.pdf .  
25 Information provided by the authorities.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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   2016  2017  2018  2019  2020  2021  
CPO production ('000  tonnes)  17,319  19,919  19,516  19,858  19,141  18,116  
Exports ('000  tonnes)  23,294  23,974  24,877  27,879  26,732  24,279  
Exports (MYR  million)  67,922  77,807  67,516  67,546  73,332  108,516  
CPO price, MYR/tonne (local delivered)  2,653  2,783  2,233  2,079  2,686  4,407  
Employmentb 429,351  430,836  446,075  437,696  .. .. 
.. Not available.  
a The oil palm planted area for smallholdings refers to the Federal Land Development Authority 
(FELDA), the Federal Land Consolidation and Rehabilitation Authority (FELCRA), and the Rubber 
Industry Smallholders Development Authority (RISDA). Meanwhile, the oil palm planted area for 
estates refers to private estates.  
b Total number of paid employees during the last pay period . 
Source:  Department  of Statistics Malaysia (2021), Selected Agricultural Indicators 2021 , November. 
Viewed  at: https://www.dosm.gov.my/ ; MPIC, Data Statistic . Viewed at: 
https://www.mpic.gov.my/mpi/en/statistic/sta ts-data-set; MIPC (2022), Agricommodity Pocket 
Statistics January -December  2021, and FAO, FAOStat . Viewed at: 
https://www.fao.org/faostat/en/#data . 
4.17.  Besides the MPIC , several public agencies support the subsector. These agencies include the 
MPOB, the MPOC, and the Malaysian Palm Oil Certification Council (MPOCC). The MPOB remains the 
principal agency responsible for promoting and developing national objectives and pol icies for the 
oil palm industry, and regulation of the sector. Its functions also include research and development, 
training, and coordination and collaboration with national and international organizations.26 The 
MPOC aims to, inter alia, promote palm oil  and its products and develop trade opportunities.27 
4.18.  The MPOCC promotes sustainable and responsible management of Malaysia's palm oil 
products through its MSPO Certification Scheme. The MPOCC sets standards, develops certification 
schemes, and establishes sustainable production and processing of palm oil with a focus on 
environmental, social, and economic aspects.28 Current MSPO standards provide oil palm 
management and supply chain certifications issued by accredited certification bodies that carry out 
third-party verification audits for domestic plantations, independent and organized smallholdings, 
and palm oil processing facilities. MSPO certification has been mandatory since 1  January  2020. As 
at 14 October  2022, about 97.3% of the total planted area of oil palm plantations were certified with 
the MSPO Certification Scheme (MS  2530:  2013). Meanwhile, 457 mills were certified to the MSPO 
General Principles for palm oil mills (MS  2530 Part  4) and 571 processing facilities were certified to 
MSPO Supply Chain  Certification Standard.29 The authorities note that the revised MSPO standards 
series (MS 2530:2022) will be effective on 1  January  2024; the revised MSPO standards will have 
stringent requirements to address environmental, social, and governance/economic  components of 
sustainability, as well as provides traceability for the industry and its stakeholders.  
4.19.  The Royal Malaysian Customs Department (RMCD) collects a windfall profit levy when the 
average monthly CPO price exceeds a certain threshold. In December  2021, Malaysia issued an order 
setting the nationwide tax rate at 3% (up from 1.5% in Sabah and Sarawak) and raising the windfall 
profit levy threshold on palm oil for Peninsular Malaysia from MYR  2,500 to MYR  3,000 per  tonne 
and for Sabah and Sar awak from MYR  3,000 to MYR  3,500 per  tonne (effective from 
1 January  2022).30 The 3% tax is levied on the difference between the average monthly CPO price 
and the respective MYR  3,000/MYR  3,500 thresholds.31 According to the authorities, the increments 
for these thresholds were due to the increase in the cost of agricultural inputs and labour costs, as 
well as to ensure that the oil palm industry remains competitive and to safeguard palm oil producers' 
income.  
4.20.  CPO is also subject to export duty fixed monthl y based on its average market price. Taxes 
are imposed when export prices exceed MYR  2,250 per tonne and may range from 3.0% to  8.0% 
 
26 MPOB, Corporate Info . Viewed at: https://mpob.gov.my/ . 
27 MPOC, Corporate Profile . Viewed at: https://mpoc.org.my/ .  
28 MPOCC, MSPO Certification Scheme . Viewed at: https://www.mpocc.org.my/about -mspo .  
29 Starting from 1  January  2024, MSPO certification for mills and processing facilities will refer to MSPO 
Part 4-1: General Principles for Palm Oil Mill including Supply Chain Requirements and MSPO  4-2: General 
Principles for Palm Oil Processing Facilities including Supply Chain Requirements.  
30 Federal Governm ent Gazette, Windfall Profit Levy (Oil Palm Fruit) (Amendment) Order  2021 
(P.U.(A)  457), 21 December  2021.  
31 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  (Table  4.4). Higher market prices resulted in export duties on CPO increasing from 5.5% in 
September  2017 to 8.0% in Novemb er 2022 (Section  3.2.2) .32 
Table 4.4 Export duties for  CPO  
Domestic market price for CPO (FOB MYR per tonne)  Export duty (%)  
Less than 2,250  0 
2,250 – 2,400  3.0 
2,401 – 2,550  4.5 
2,551 – 2,700  5.0 
2,701 – 2,850  5.5 
2,851 – 3,000  6.0 
3,001 – 3,150  6.5 
3,151 – 3,300  7.0 
3,301 – 3,450  7.5 
Greater than 3,450  8.0 
Note:  CPO refers to HS  1511.10  0000. Effective from 1  January  2020.  
Source:  MPOB, Statistics, Export Duties . Viewed at: https://bepi.mpob.gov.my/index.php/en/ . 
4.21.  Malaysia applies several incentive schemes to oil palm, notably: (i)  the Palm Oil Smallholder 
Replanting Financing Scheme (TSPKS)33; (ii) the Palm Oil Smallholder Inputs Financing Scheme 
(IPPKS)34; (iii)  the SME incentive scheme for the production of palm -based value -added food 
products; and (iv)  incentives for MSPO certification of independent smallholders, organized small 
estates , and processing facilities.35 The Government provides financial assistance for training, 
auditing, farmers' purchases of personal protective equipment, and chemical and fertilizer storage 
and signage.36 
4.22.  Malaysia promotes sustainable energy sources for reduced greenhouse gas emissions and 
fossil fuel dependency under its National Biofuel Policy 2006 and the Malaysian Biofuel Industry 
Act 2007. Biofuels, using CPO as feedstock, are used in domestic transpor t and industry, and for 
export. Malaysia mandates biodiesel use through regulations on land transport and industry. The 
B5 biodiesel programme (blends of 5% biodiesel with 95% petroleum diesel) was introduced for land 
transportation in 2011, and subsequent ly upgraded to B7 in 2014 and B10 in 2019.37 Nationwide 
adoption of the B20 palm oil biofuel programme is foreseen by the end of 2022.38 According to the 
authorities, there are no specific/direct incentives to consumers or industry under the programme.  
4.1.1.6.2   Rubber  
4.23.  The rubber subsector contributed no more than 2.3% of GDP in agriculture (at constant 2015 
prices) in 2021. Nevertheless, it is an important source of employment and export revenue and 
supports downstream diversification in rubber products. Over 90%  of the area planted with rubber 
trees are smallholdings.  
4.24.  Malaysia remains a net exporter of rubber and rubber products, mainly driven by 
manufactured rubber products. The main products are pneumatic tyres, inner tubes, and gloves. 
In 2020, strong exports of rubber products were led by rubber gloves, mainly driven by high global 
demand in the medical and health sectors (Table  4.5). Meanwhile, Malaysia has also increased its 
imports of natural rubber steadily to serve local downstream demand, as domestic rub ber production 
has been declining. The decline reflects reduced planted area, as rubber plantations have been 
 
32 WTO document WT/TPR/S/366/Rev.1, 25  May 2018; and MPOB, Statistics, Export Duties . Viewed at: 
https://bepi.mpob.gov.my/index.php/en/ .  
33 TSPKS is available to smallholders (less than 40.47  ha) undertaking replanting. The amount of this 
loan is MYR  10,000/ha (Peninsular) and MYR  14,000/ha (Sabah/Sarawak). Limited to 6.5  ha, smallholders with 
palm trees o ver 25  years of age may apply for loans with a preferential interest rate of 2%, a repayment 
moratorium of 48  months, no collateral, and no guarantor.  
34 The amount of loan under the IPPKS scheme is MYR  2,500/ha with a preferential interest rate of 2%, 
limited to 6.5  ha, and a repayment period of 24  months with no collateral and guarantor.  
35 MPIC, Palm Oil Industry . Viewed at: https://www.mpic.gov.my/mpi/en/palm -oil-industry .  
36 MPIC, Palm Oil Industry ; and information provided by the authorities.  
37 MPIC, Palm Oil Industry .  
38 Reuters (2022), " Malaysia Aims to Fully Implement B20 Biodiesel Mandate by Year -End", 5 January. 
Viewed at: https://www.reuters.com/business/energy/malaysia -aims-fully-implement -b20-biodiesel -mandate -
by-year-end-2022-01-05/. WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  converted to residential purposes and to oil palm.39 In addition, according to the authorities, the 
downward trend in natural rubber production wa s also due to unattractive rubber prices, 
unfavourable weather, labour shortages, and leaf fall disease. In value terms, Malaysia's imports of 
natural rubber mainly originated from Thailand (53.8%), Côte  d'Ivoire (22.3%), and the 
Philippines  (8.7%) in 2021 .40 
Table 4.5 Selected indicators for rubber, 2015 -21 
 
2015  2016  2017  2018  2019  2020  2021  
Natural rubber production 
('000  tonnes)  722 674 740 603 640 515 470 
Planted area ('000  ha) 1,074  1,078  1,082  1,085  1,101  1,098  1,096  
of which:         
Estates ('000  ha) 77 77 75 73 83 83 83 
Smallholdings ('000  ha) 998 1,001  1,007  1,012  1,018  1,016  1,014  
Employment ( '000 persons )        
Estates  11.6 10.3 10.3 11.5 11.1 9.7 8.0 
Manufacturing  23 24 76 77 100 104 106 
Trade balance in rubber and 
rubber products 
(MYR  million)  13,168  12,271  15,510  16,660  16,627  34,782  52,276  
Natural rubber's contribution to exports (MYR  billion, unless otherwise specified)  
Trade balance (MYR  million)  1,183  816 1,486  1,227  599 -11 -396 
Exports         
Value (MYR  million)  6,263  5,645  9,140  6,523  6,064  6,153  6,943  
Volume ('000  tonnes)  1,113  1,018  1,194  1,109  1,034  1,072  1,024  
Imports         
Value (MYR  million)  5,080  4,829  7,654  5,296  5,465  6,164  7,339  
Volume ('000 tonnes)  956 930 1,113  1,015  1,083  1,234  1,207  
Rubber industry's contribution to exports (MYR  billion, unless otherwise specified)  
Trade balance (MYR  million)  11,985  11,455  14,024  15,433  16,028  34,793  52,672  
Exports of rubber products  17,997  18,121  21,627  23,796  23,554  41,633  61,680  
% of national exports  2.3 2.3 2.3 2.4 2.4 4.2 5.0 
Tyres  1,118  1,090  1,315  1,322  1,443  1,337  1,745  
Inner tubes  16 12 18 14 12 5 6 
Footwear  377 446 429 419 518 480 573 
Latex goods, of which:  14,646  14,651  17,449  19,349  19,142  37,641  56,651  
 Rubber gloves  13,097  13,281  15,856  17,741  17,563  35,258  54,813  
Industrial rubber goods  729 743 1,111  1,372  1,110  934 1,308  
General rubber goods  1,111  1,179  1,304  1,320  1,329  1,236  1,396  
Imports of rubber products  6,012  6,666  7,602  8,363  7,526  6,839  9,008  
Source:  MRB, Natural Rubber Statistics (January -June 2022) . Viewed at: 
https://www.lgm.gov.my/webv2/pdfViewer/nrStatistic ; MPIC, Data Sta tistic. Viewed at:  
https://www.mpic.gov.my/mpi/en/statistic/stats -data-set; and information provided by the 
authorities.  
4.25.  The MRB , established on 1  January  1998, is the custodian of the rubber industry in Malaysia. 
The primary objective of the MRB is to assist in the development and modernization of the Malaysian 
rubber industry in all aspects from cultivation of the rubber tree, th e extraction and processing of 
its raw rubber, the manufacture of rubber products, and the marketing of rubber and rubber 
products.  
4.26.  Under the Rubber Production Incentive (IPG), whenever the average monthly price falls below 
a certain threshold, registered smallholders may claim compensation based on the difference 
between the average domestic farm -gate prices and the threshold, up to a maximum amount.41 
According to the authorities, the IPG will be activated if the average price of cup lump is below 
MYR 2.50/kg (50% dry rubber content). The IPG was last activated in Peninsular Malaysia in 
January  2021, while for Sarawak in September  2021 and for Sabah in August  2022.42 
 
39 Department of Statistics Malaysia (2021), Malaysia Trade Statistics Review, Volume  I, 2021.  
40 MPIC, Data Stat istic. Viewed at: https://www.mpic.gov.my/mpi/en/statistic/stats -data-set.  
41 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
42 All eligible smallholders will be paid automatically with the IPG based on the transaction records of 
RRIMniaga, which is a smartphone application developed by MRB to record rubber transactions by rubber 
dealers. Requirements for eligibility include (i)  Malaysian rubber smallholders; (ii)  holding Rubber Transaction 
Authority Permit (PAT -G); (iii)  owing a plantation of less than 100  acres (40.46  ha); selling rubber – 
 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.27.  The Latex Production Incentive Programme (IPL), initiated by the MRB, aims at encouraging 
smallholders to move towards latex production. Incentives include one -time aid on inputs such as 
fertilizer and herbicide worth MYR  850 per hectare and a MYR  1/kg incentive for every kilogramme 
produced by smallholders (at 100% dry rubber content).43 Eligible smallholders are those holding 
rubber transaction authority permits and owners of matured rubber plantations of less than 
100 acres (40.47  ha) in West Malaysia.44 
4.28.  With respect to grants for the replanting scheme, the Rubber Industry Smallholders 
Development Authority (RISDA) is responsible for implementing the programme, replanting old 
rubber trees with rubber or other approved crops for smallholding sector. The programme aims to 
increase the productivity of smallholder sector. Through this progra mme, smallholders receive 
assistance in the form of cash, items such as seeds, fertilizer, and advice. The current replanting 
grants rate per hectare are MYR  13,710 for West Malaysia, MYR  14,955 for Sabah, and MYR  14,805 
for Sarawak. The rubber new plantin g grant is not available for smallholders.  
4.29.  The National Rubber Industry Transformation Program, initiated by the MPIC and conducted 
by the MRB in 2021, is to consolidate smallholders, rubber enterprises, and small cooperatives in 
larger consortia. The Prog ram aims to increase rubber farm -gate price at the smallholder level by 
shortening the supply chain of raw rubber materials through  crepe rubber  processing technology 
and to create a systematic and effective rubber business model among rubber smallholders,  
cooperatives, and entrepreneurs. Incentives provided under this Program include the development 
of Crepe Rubber Processing Center along with the crepe processing machineries and tools, technical 
advisory services, and marketing and promotion of crepe rubb er services. There are three categories 
of participant: (i)  rubber cooperatives; (ii)  rubber entrepreneurs; and (iii)  entrepreneurs 
(non-rubber). Interested cooperatives and entrepreneurs would need to submit application form to 
the MRB and eligible applic ations would be presented to MPIC Evaluation Committee for approval.  
4.30.  An export tax (cess) of 0.2% of the export value is levied on manufacturers of rubber products 
(excluding rubber tyres, inner tubes, and footwear) in Peninsular Malaysia.45 In addition, t he RISDA 
issued an order to impose a cess of MYR  0.10 per  kg on rubber exports from Peninsular Malaysia 
(effective from 1  October  2020).46 
4.1.1.6.3   Rice 
4.31.  Rice production makes a small contribution towards GDP, but rice is a key staple food for the 
population. Except  in 2017, rice production increased steadily between 2015 and 2019 (Table  4.6). 
More than 70% of the domestic paddy rice harvest originates in "granary areas"47 dominated by 
smallholders.48 Despite Malaysia's efforts to increase production, imports continu ed to increase 
from 2016 to 2021 and it remained a net importer (Table  4.6). Malaysia's main suppliers of rice are 
Viet Nam, Thailand, and India, collectively accounting for some 80% of the imports (average 
for 2015-21). 
 
cup lump/latex/rubber sheet (USS); and (iv)  selling only rubber to licensees who use RRIMni aga Apps to 
qualify for IPG claims.  
43 MOF, Latex Production Incentive Programme (IPL) . Viewed at: 
https://budget.mof.gov.my/manfaat/en/faq/ipl.html ; and information provided by the authorities.  
44 MOF, Latex Production Incentive Programme (IPL) . Viewed at: 
https://budget.mof.gov.my/manfaat/en/faq/ipl.html ; and information provided by the authorities.  
45 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
46 Federal Government Gazette, Rubber Industry Smallholders Development Authority (Cess) 
Order  2020 (P.U.(A)  232), 17 August  2020. The products refer to HS  4001, 4002, 4005, and 4006.  
47 Granary areas in Malaysia are paddy fields with large irrigation schemes (area over 4,000 ha) and 
recognized under the National Agricultural Policy as main areas for rice production . These areas are under the 
purview of Muda Agricultural Development Authority (MADA), Kemubu Agricultural Development Authority 
(KADA), and 10 Integrated Agriculture Development Areas throughout Malaysia. Most granary areas are in 
Kedah, Kelantan, Perak, Selangor, Pahang, Terengganu, Sabah, Sarawak, and Penang.  
48 Department of Statistics Malaysia (2021), Selected Agricultural Indicators  2021, November.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 4.6 Selected indicators for rice (paddy), 2015 -21 
 2015  2016  2017  2018  2019  2020  2021  
Area harvested ('000  ha) 682 689 686 700 672 645 .. 
Average yield kg/ha  4,022  3,978  3,750  3,770  3,501  3,654  .. 
Paddy production ('000 tonnes)  2,741  2,740  2,571  2,640  2,353  2,356  .. 
Rice production ('000  tonnes)  1,767  1,766  1,656  1,700  1,516  1,624  .. 
Value of production (USD  million)  842 793 717 785 82 663 .. 
Trade balance (USD  million)  -503 -357 -345 -397 -442 -566 -536 
Export  32 20 1 9 11 23 39 
Import  535 377 346 406 453 589 576 
Main originsa 
Viet Nam 154 91 140 106 201 248 133 
Thailand  206 186 120 208 121 39 67 
India 55 25 34 33 55 162 213 
.. Not available.  
a Simple average for 2015 -21. 
Source:  Department of Statistics Malaysia (2021), Selected Agricultural Indicators  2021, November. 
Viewed  at: https://www.dosm.gov.my/ ; FAO, FAOStat . Viewed at: 
https://www.fao.org/faostat/en/#home ; and information provided by the authorities.  
4.32.  The development of the sector is supported by several agencies, including the Department of 
Agriculture, the Malaysian Agricultural Research and Development Institute (MARDI), and the 
Farmers Organization Authority. Rice is covered in the NAP  2.0, subsequent to the NAP (2011 -2020). 
Under the NAP  2.0, strategies include (i)  boosting productivity through better management of land 
and water use; (ii)  developing l ocal specialty rice varieties; (iii)  restructuring existing financial 
support to encourage the optimization of farming operations; (iv)  increasing the participation of the 
private sector; and (v)  promoting the future participation of younger farmers.49 
4.33.  Padiberas Nasional Berhad (BERNAS) is responsible for ensuring reliable supplies of rice on 
behalf of the Government. BERNAS is notified to the WTO as a state trading enterprise.50 BERNAS 
is the sole company importing rice without restriction of origin. Accor ding to the authorities, the 
agreement between the Government and BERNAS, which was supposed to maintain until 
January  202151, has been extended for a period of 10 years from 2021 to 2031. The authorities also 
note that BERNAS is granted the right to impor t rice into Malaysia for the same period; this right is 
subject to compliance with Malaysia's obligations under the WTO  agreements, other international 
treaties, and agreements entered into or to be entered into by Malaysia in the future.  
4.34.  BERNAS carries ou t various activities, including (i)  provision of price support as it acts as the 
buyer of last resort for paddy farmers (the Guaranteed Minimum Price is set at MYR  1,200 per 
tonne); (ii)  managing the National Rice Stockpile (under new concession agreement,  BERNAS is 
required to raise the stockpile volume up to 290,000  tonnes by the end of 2023); (iii)  managing the 
National Paddy Seed Stockpile (supply of seed by licensed producers is based on demand set by the 
government); (iv)  managing the disbursement of subsidies to paddy farmers; (v)  managing the 
Bumiputera rice millers scheme and Bumiputera wholesalers; (vi)  managing the supply of farm 
machinery; developing and managing large -scale farming in paddy fields and local special rice 
varieties; (vii)  contribu ting to the natural disaster fund; and (viii)  supporting the paddy and rice 
industry development information system, and supporting the development of soil nutrients.  
4.35.  In addition to the Guaranteed Minimum Price, the Government provides several support 
meas ures for rice producers to ensure food security and to encourage farmers to increase yields. 
These measures include price subsidies, fertilizer subsidies, and paddy production incentives 
(Table  4.7). In 2020, the Government spent MYR  1.6 billion on rice su bsidies and incentives, or 
about 50% of the budget allocation of the MAFI.  
 
49 Ministry of Agriculture and Food Industries (2021), Executive Summary National Agrofood 
Policy  2021-2030 (NAP  2.0), 24 October.  
50 WTO document G/STR/N/17/MYS, G/STR/N/18/MYS, 15  October  2021.  
51 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 4.7 Government expenditures on rice and paddy subsidies, 2017 -20 
(MYR million)   
2017  2018  2019  2020  
Paddy price subsidy  517 641 627 620 
Fertilizer subsidy  470 465 383 395 
Paddy production incentive  424 563 414 460 
Certified seed incentive  75 75 75 75 
Hill rice fertilizer subsidy  70 64 .. .. 
Total 1,555  1,808  1,498  1,550  
Total MAFI expenditures  3,744  3,657  3,370  3,102  
Percentage spent on rice subsidies  41.5%  49.4%  44.4%  50.0%  
.. Not available.  
Note:  No data available for 2021.  
Source:  Information provided by the authorities.  
4.1.1.6.4   Livestock  
4.36.  Livestock is the second -largest agricultural subsector. Although the production volume 
remained relatively stable in recent years, the value of livestock production increased steadily, 
reaching MYR  22.3 billion in 2021 (Table  4.8). According to the authorities, the increase in va lue of 
production was mainly due to a slight increase in volume combined with rising prices of products; 
an increase in domestic animal products (poultry, beef, fresh milk); and an increase in the number  
of and volume of production of commercial farmers fo r poultry, beef, and fresh milk. While most 
cattle production is carried out by smallholders (sometimes mixed with rubber and palm planting), 
poultry and pig production is dominated by larger farms. Despite increasing exports, Malaysia 
remains a net import er of livestock and livestock products, notably of animal feeds (Table  4.8). 
Table 4.8 Livestock indicators, 2015 -21 
 
2015  2016  2017  2018  2019  2020  2021a 
Value of production (MYR  million)  
Total 18,466  20,091  21,415  22,841  22,261  22,856  22,978  
Beef 1,412  1,487  1,529  1,596  1,584  1,489  1,471  
Mutton  145 166 168 173 168 156 149 
Pork 2,526  2,370  3,243  3,888  4,041  4,091  4,067  
Poultry meat  9,534  10,776  10,884  11,694  11,685  11,842  11,614  
Chicken/duck eggs  4,752  5,190  5,480  5,373  4,662  5,154  5,550  
Fresh milk  80 85 92 96 101 104 109 
Raw hides and skins  17 18 20 20 20 19 19 
Production in volume ('000  tonnes, unless otherwise indicated)  
Total (excl. milk)  2,720  2,858  2,811  2,764  2,613  2,774  2,758  
Beef 50 48 46 47 44 41 41 
Mutton  4 5 4 4 4 4 4 
Pork 223 195 218 224 223 221 219 
Poultry meat  1,633  1,755  1,665  1,654  1,655  1,703  1,625  
Chicken/duck eggs  796 843 865 824 677 796 860 
Milk (million  litres)  36 37 37 38 41 42 44 
Raw hides and skins  13 13 12 11 10 9 9 
Trade (MYR  million) (excl. leather)  
Export  4,971  5,174  5,454  5,948  6,073  6,796  .. 
Import of which:  15,691  15,036  16,131  15,366  14,769  15,445  .. 
Animal feeds  8,347  8,123  7,782  7,309  6,692  6,757  .. 
Memo: Wholesale price (MYR/kg)  
Broilers (live)  5.5 5.8 5.9 5.9 5.7 5.7 .. 
Processed chicken  6.6 7.2 7.4 7.1 7.0 6.9 .. 
Local mutton  31.3 33.0 35.1 35.5 36.7 38.0 .. 
Local beef  24.6 26.3 28.7 31.4 30.7 31.8 .. 
.. Not available.  
a Estimate.  
Source:  Compiled by the WTO Secretariat, based on data from Department of Veterinary Services. 
Viewed  at: https://www.dvs.gov.my/index.php/pages/view/1876 . WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.37.  The MAFI administers livestock policy and l egislation. Other government agencies such as the 
Department of Veterinary Services  (DVS)  are also responsible for implementing policy in specific 
areas and in animal health and production. The NAP  2.0 considers livestock a strategic sector. 
Policies are f ocused on increasing growth and sustainability in the poultry industry; easing market 
accessibility in the ruminant industry for new entrepreneurs; increasing ruminant livestock; 
mitigating and controlling losses of livestock due to diseases; and reducing dependency on imported 
feed.52 
4.38.  The DVS under the MAFI is the competent veterinary authority to provide support services in 
the animal industry for the ruminant sector. Livestock support covers the whole extension 
programme and disease control. In addition,  the DVS also provides extension and advisory services 
such as herd health services, i.e.  free vaccination programme for livestock, and conducts planned 
and scheduled visits involving veterinary technical aspects.  
4.1.2   Fisheries  
4.39.  Fisheries accounted for less than 1% of GDP at constant prices in 2021. The number of fishers 
declined by nearly 20,000 from 2017 to 2020. Nearly 25% of the 119,826  fishers working on licensed 
fishing vessels in 2020 were non -Malaysians.53 Overall, the number of registered vessels dec reased 
from 52,648 in 2017 to 48,826 in 2020.54 According to the authorities, the decrease in the number 
of registered vessels was mainly due to the regularization exercise by the Department of Fisheries  
Malaysia , which revoked licences of inactive vessels . 
4.40.  Marine capture fisheries dominate aquaculture; about 77% of the production came from 
marine capture during 2015 -20. Fish landings declined from 1,490,000  tonnes in 2015 to 
1,384,000  tonnes in 2020, particularly from 2019 to 202 0 due to the COVID -19 pande mic 
(Table  4.9); reduced fishing activity resulting from restricted movement and economic activities 
caused disruption along the value chain including reduced workers on the fishing vessels and 
changes in demand especially in the food and beverage industry . The volume of aquaculture 
production also fell during the same period, although the value rose, particularly for green seaweed.  
Table 4.9 Marine and i nland capture fishing and aquaculture, 2015 -20 
 
2015  2016  2017  2018  2019  2020  
Inland capture ('000  tonnes)  5.9 5.8 5.2 6.1 5.6 5.6 
Marine capture ('000  tonnes)  1,490.1  1,578.5  1,469.2  1,456.9  1,459.5  1,387.4  
Miscellaneous pelagic fishes  448.9  468.1  347.5  373.2  354.2  352.6  
Marine fishes not identified  296.6  321.2  320.9  311.1  318.3  310.6  
Miscellaneous coastal fishes  282.7  310.1  309.2  290.3  280.8  253.6  
Shrimps, prawns  114.9  110.9  114.6  115.5  106.5  106.6  
Tunas, bonitos, billfishes  80.1 93.1 98.1 90.8 109.0  97.9 
Herrings, sardines, anchovies  67.6 79.3 80.3 71.9 86.5 87.3 
Aquaculture ('000 tonnes)  507.0  407.9  427.5  392.0  412.3  400.0  
Red seaweeds  260.8  206.0  203.0  174.1  188.1  182.1  
Shrimps, prawns  52.6 43.2 45.8 45.9 53.4 48.7 
Tilapias and other cichlids  36.3 37.0 32.5 31.8 36.2 32.0 
Clams, cockles, arkshells  16.9 9.6 12.5 16.9 13.8 18.7 
Carps, barbels and other cyprinids  7.4 9.4 12.3 14.6 16.5 12.9 
Aquaculture (USD  million)a 845.3  696.7  760.1  816.2  1,537.8  1,386.2  
Seaweeds  33.4 24.8 10.4 12.9 689.3  599.5  
Shrimps, prawns  292.1  225.4  251.4  274.0  314.8  280.5  
Tilapias and other cichlids  77.5 75.6 68.5 73.8 86.7 80.6 
Carps, barbels and other cyprinids  14.2 23.4  22.4 38.7 33.1 38.0 
Clams, cockles, arkshells  10.6 9.1 14.3 20.9 36.5 30.4 
a The FAO database does not have data for the value of marine catch.  
Source:  FAO, Fisheries and Aquaculture . Viewed at: https://www.fao.org/fishery/statistics -query/en/home ; 
and information provide d by the authorities.  
 
52 MAFI (2021), Executive Summary National Agrofood Policy 2021 -2030 (NAP  2.0), 24 October.  
53 Departmen t of Fisheries Malaysia, Fisheries Statistics  I. Viewed at: 
https://www.dof.gov.my/en/resources/fisheries -statistics -i/.  
54 Department of Fisheries Malaysia, Fisheries Statistics  I.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.41.  As for trade, Malaysia is a net importer of fish and fish products, and the trade deficit is 
widening (Table  A4.2).55 In 2021, the deficit amounted to USD  418.7  million, up from 
USD 265 million in 2017. Over the period 2017 -21, exports as well as imports grew in value and 
volume terms, mainly due to high demand for fish and fish products.56 Crustaceans (mostly frozen 
shrimp) were Malaysia's leading exports, followed by prepared/preserved fish, molluscs (mostly 
cuttlefish), and frozen fish, accounting for about 70% of total exports. The main imports were frozen 
fish, fresh or chilled fish, molluscs (mostly cuttlefish), cru staceans (mostly frozen shrimp), and fish 
fillets and other fish meat (Table  A4.2). Malaysia's main export markets were China, Singapore, and 
Australia, while its main sources were China, Indonesia, and Viet  Nam.  
4.1.2.1   Policy  
4.42.  The Department of Fisheries Malaysia  in the MAFI is responsible for the overall management 
of fisheries -related matters, including the implementation of rules and regulations, policies, and 
resource management. It also provides technical support to marine and freshwater fisheries and 
aquacul ture. Several agencies provide specific services to fisheries and aquaculture, including the 
Fisheries Development Authority of Malaysia (LKIM), the Fisheries Research Institute of Malaysia, 
the Malaysia Maritime Enforcement Agency (MMEA), and the Departme nt of Fisheries Sabah.57 
4.43.  The Fisheries Act  1985 (Act  317), the amendments to the Act, and accompanying regulations 
constitute the principal legal framework for fisheries.58 In 2019, the amendment was adopted to 
increase the penalty for foreign fishing vess el and expansion to high seas. According to the 
authorities, the proposed amendments to the Act are currently before the Parliament. Under the Act, 
the Minister of the MAFI may put forward regulations relating to the management and development 
of fisheries  resources, including licensing fishing vessels; prohibit ing specific fishing methods, areas, 
and species; and determin ing closed seasons.59 Inland fisheries (including inland aquaculture) fall 
under the State's jurisdiction in accordance with the Federal Constitution, considering that land 
matters are state matters. The State Government may appoint an inland fisheries officer to exercise 
the powers conferred under the state legislation. Marine fisheries and aquaculture (beyond 3  nm) 
fall under the jurisdic tion of Federal Government. Fishing areas are partitioned in zones according 
to the distance to the shore with fishing in each zone restricted by size and type of vessel 
(Table  4.10). Most fishing activities were primarily confined to Zone  A (about 84% of vessels and 
60% of fishers) in 2020. All fishing activity, including foreign vessels and marine water -based 
aquaculture projects, requires a licence from the Department of Fisheries.60 
Table 4.10 Fishing zones in Malaysia  
 Zone A  Zone B  Zone C  Zone C2  Zone C3  
Distance from shore: 
nautical miles  0-5 5-12 12-30 30 to EEZ  High seas  
Vessel size: gross 
register tonnage ( GRT) Less than 40  Less than 40  40-70 70 plus  70 plus 
Vessel type  Traditional 
gear Trawlers/  
purse seiner  Trawlers/  
purse seiner  Trawlers/  
purse seiner  Purse seiners/  
tuna long line  
 
55 WTO definition of fish and fishery products: HS  Chapters 03, 0508, 0511.91, 1504.10, 1504.20, 
1603-1605, and 2301.20, plus some selected products (HS  2905.43 -2905.45, 3301, 3501 -3505, 3809.10, 
3823, 3824.60, 4101 -4103, 4301, 5001 -5003, 5101 -5103, 5201 -5203, and 5301 -5302).  
56 WTO Secretariat's calculations, based on UN Comtrade database. The upward trend was also 
observed in the volume terms (from 230,000  tonnes in 2017 to 340,000  tonnes in 2021 for exports and from 
414,000  tonnes in 2017 to 566,000  tonnes in 2021 for imports).  
57 LKIM, inter alia, promotes and develops efficient and effective management of fisheries enterprises 
and fish marketing, facilitates economic and social developments of Fishermen's Associations, and supervises 
Fishermen's Associ ations ( https://lkim.gov.my/en/vision -mission -objectives/ ). The Fisheries Research Institute 
of Malaysia provides scientific advice for the sustainable exploitation and management of fisheri es resources, 
conserving aquatic resources, and enhancing fish production through the development of appropriate 
technologies ( http://fri.dof.gov.my/fri.php/pages/view/2872 ). The MMEA protects t he Malaysian Maritime Zone 
through air and coastal surveillance, management of maritime training institutions, and maritime search and 
rescue ( https://www.mmea.gov.my/eng/index.ph p/en/aboutusen/functions ), and the Department of Fisheries 
Sabah is responsible for the development and management of fisheries in Sabah 
(https://fishdept.sabah.gov.my/?q=en/co ntent/policies -guidelines ).  
58 Fisheries (Amendment) Act  2012; and Fisheries (Amendment) Act  2019.  
59 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
60 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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   Zone A  Zone B  Zone C  Zone C2  Zone C3  
Number of fishers and licensed fishing vessels by zone in 2020  
Fishers  70,697  18,656  19,280  10,982  213 
Licensed fishing 
vessels  40,918  5,095  2,287  506 20 
Note:  In 2020, the total numbers  of fishers and licensed fishing vessels were 119,828 and 48,826, 
respectively.  
Source:  Department of Fisheries Malaysia, Annual Fisheries Statistics  2020, Volume  I. Viewed at: 
https://www.dof.gov.my/en/resources/fisheries -statistics -i/; and information provided by the 
authorities.  
4.44.  The policies and st rategies for fisheries and aquaculture are set out in the Twelfth  Plan, the 
NAP 2.0, and the Strategic Plan of the Department of Fisheries 2021 -2030. The Twelfth  Plan 
encourages the adoption of digital technologies with emphasis on sustainable development of 
capture fisheries, as well as advancing the value chain through modernized operational and 
production processes. The NAP  2.0 highlights some issues facing the sector, including the depletion 
of resources due to overfishing, increasing production costs, biosecurity and compliance issues on 
aquaculture farms, and lower income for fishers. Strategies to cope with these issues include 
maintaining self -sufficiency levels; enhancing monitoring, control, and surveillance efforts in marine 
areas; safe and sustai nable fish sources along the value chain; and improving the livelihood and 
income levels of fishing communities.61 The Strategic Plan of the Department of Fisheries 2021 -2030 
in line with the NAP  2.0 serves as a blueprint to boost the fisheries industry to wards a higher 
contribution to the country's economy and, in parallel, ensure the sustainability of fisheries 
resources. The Plan has five main thrusts: modernizing and promote smart aquaculture; 
strengthening the domestic market and developing demand -driven and export -ready products; 
building capacity to meet demand of the industry; moving towards sustainable production and food 
system; and creating a conducive business ecosystem and strong institutional framework.  
4.45.  Other specific policies are outlined in the Tuna Industry Development Strategic Plan 
2021-2030 and the National Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and 
Unregulated Fishing (Malaysia's NPOA -IUU).62 In line with the NAP  2.0, the Tuna Industry 
Development Strategic Plan 2021 -2030 is a comprehensive national development and management 
initiative. In addition to tuna fishing, the plan is intended for developing other services such as ports, 
transportation, storage, and processing. The Tuna Strategic Plan 2021 -2030 has outlined 6  pillars: 
(i) compliance to domestic and international instruments; (ii)  vessel specification (modernization) 
and quota determination; (iii)  technology improvement; (iv)  development of management and 
control system; (v)  regulation of tu na fisheries; and (vi)  post-harvest. Malaysia is a member of 
Indian Ocean Tuna Commission (IOTC).63 
4.46.  Malaysia is committed to combating IUU fishing as set out in Malaysia's NPOA -IUU. As noted 
at the previous Review, Malaysia's NPOA -IUU outlines a number of action plans including monitoring, 
control, and surveillance ( MCS); regular joint patrol operations with neighbouring countries ; fishing 
vessel registration ; and port state measures to control the entry of foreign -flagged vessels into 
Malaysia.64 According to the authorities, Malaysia is still in the process of developing criteria for 
mechanism to monitor IUU vessels.  
4.47.  Supports to the fisheries sector include fuel subsides, living allowances, catch incentives, and 
loans to fishers. The Government s pent MYR  2,633  million on fisheries subsidies over the review 
period, at least MYR  500 million per year, except for in 2020, mainly due to the impact from the 
COVID -19 pandemic (Table  4.11). Fuel subsidies accounted for more than 70% of the total 
(MYR 1,902 million), followed by living allowances (24%) designed as income support to fishers 
 
61 MAFI (2021), Executive Summary National Agrofood Policy 2021 -2030 (NAP 2.0) , 24 October.  
62 Malaysia's NPOA -IUU was developed in accordance with the International Plan of Action to Prevent, 
Deter, and Eliminate Illegal, Unreported and Unregulated Fishing (IPOA -IUU), adopted in 2001 by the FAO.  
63 IOTC, Structure of the Commission . Viewed at: https://www.iotc.org/about -iotc/structure -
commission .  
64 For details of Malaysia's NOPA -IUU, see WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  affected by adverse weather conditions.65 Catch incentives vary by fishing zone. In all, 
MYS 84.5 million was given to fishers as catch incentives in the period 2017 -21. 
Table 4.11 Government spending on fisheries, 2017 -21 
(MYR million)   
2017  2018  2019  2020  2021  Total  
Total 503.7  786.9  574.5  179.1  589.2  2,633.4  
Fuel subsidy  314.1  600.5  468.2  65.0 460.1  1,907.9  
No. of beneficiaries  55.1 54.7 53.0 52.1 47.3 262.2  
Living allowances  166.1  162.5  87.3 100.7  116.8  633.4  
Catch incentives  23.0 23.1 16.0 11.1 11.4 84.5 
Loans to fishers  0.5 0.8 3.0 2.3 0.9 7.5 
Source:  Information provided by the authorities.  
4.48.  Regarding aquaculture, state authorities designate Aquaculture Industrial Zones (both 
on- and off -shore) for commercial -scale aquaculture projects, including seaweed.66 The Federal 
Government focuses on planning and technical support. In 2021, there were 4 4 sites covering more 
than 18,873.3  ha.67 
4.1.2.2   Border measures  
4.49.  Tariff protection is relatively low with an average applied MFN tariff of 0.6%. About 92% of 
the fishery tariff lines are duty -free, and import duties ranged from 5% to 20% in 2022. Most trading 
partners enjoy duty -free treatment under FTAs. No tariff quotas are applied to fish and fishery 
products. Fish and fish products are subject to import and export control procedures including SPS 
requirements (Section  3.3.3).68 Fish inspection charges are impo sed by MAQIS pursuant to 
Second  Schedule of Malaysian Quarantine and Inspection Services (fees and charges) 
Regulations  2013.69 Tax exemptions may be granted to companies carrying out food production 
projects, including companies and associations dealing w ith fishery activities under the Income Tax 
Act 1967, provided the conditions prescribed in the Act are met.70 
4.2  Mining and Energy  
4.2.1   Mining and quarrying  
4.50.  Mining and quarrying, excluding petroleum and natural gas, accounts for approximately 0.6% 
of Malaysia's G DP (at constant 2015 prices). Growth has been sluggish in the sector since 2016. The 
decline in production was particularly pronounced in 2020 (almost 10%), followed by a very modest 
recovery (0.3%) in 2021 (Table  1.2). The principal minerals extracted are  iron ore, gold, tin, bauxite, 
copper, and ilmenite, while quarrying output is dominated by sand and gravel, silica sand, and 
limestone (Table  4.12). Coal and clay are also extracted. Geological mapping indicates that 
Malaysia's mineral resources are consi derable.  
 
65 W. Wen Chiat Lee and K.K.  Viswanathan (2019), " Subsidies in the Fisheries Sector of Malaysia: 
Impact on Resource Sustainability ", Review of Politics and Public Policy in Emerging Economies , Vol.  1, No.  2, 
December.  
66 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
67 Information provided by the authorities.  
68 Department of Fisheries Malaysia, Import and Export Protocol . Viewed at: 
https://www.dof.gov.my/en/services/i mport -export/import -and-export -protocol/ .  
69 Federal Government Gazette, Malaysian Quarantine and Inspection Services (Fees and Charges) 
Regulations 2013 (P.U.(A)  115), 29  March  2013. As stated in paragraphs 18 -20 of the Second  Schedule.  
70 Department of Fi sheries Malaysia, Tax Incentives . Viewed at: 
https://www.dof.gov.my/en/services/tax -incentives/ .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 4.12 Mining and quarrying production, 2017 -21 
  2017  2018  2019  2020  2021  
Minerals        
Bauxite  '000 tonnes  189 590 900 595 48 
MYR million  21.96  66.16  104.47  70.83  5.71 
Gold kg 2,124  2,978  3,150  1,715  1,781  
MYR million  403.85  506.73  608.45  402.27  426.87  
Tin tonnes  3,894  3,868  3,611  2,963  2,988  
MYR million  233.92  313.74  288.99  193.78  360.54  
Iron ore  '000 tonnes  3,920  3,354  4,160  5,371  4,874  
MYR million  767.22  503.04  556.05  709.22  594.23  
Energy minerals        
Coal '000 tonnes  2,988  2,653  3,459  2,978  3,111  
MYR million  405.37  371.39  484.28  327.61  342.17  
Quarrying        
Aggregates  '000 tonnes  146,144  131,584  128,622  108,085  109,519  
MYR million  3,242.66  2,222.84  2,295.10  1,900.44  2,216.88  
Limestone 
(for cement)  '000 tonnes  25,664  25,342  24,171  22,378  19,978  
MYR million  307.50  282.81  224.90  217.42  226.03  
Sand & gravel  '000 tonnes  36,702  44,919  69,425  35,681  35,556  
MYR million  634.70  660.90  1,050.30  592.92  622.44  
Silica sand  '000 tonnes  2,634  4,064  4,704  5,172  6,914  
MYR million  133.04  233.91  398.00  314.03  387.11  
Source:  Department of Minerals and Geoscience Malaysia.  
4.51.  A boom in the mining of bauxite – the largely unregulated production rose 100-fold between 
2013 and 2015 – came to an end in January  2016 when a temporary ban on all bauxite mining was 
introduced due to serious environmental concerns. While the moratorium on mining continued to be 
extended, bauxite -related activities were permit ted, e.g.  transportation (to ports) and exports from 
stockpiles. The Government finalized the standard operating procedure for bauxite mining and 
export activities (in the state of Pahang) in September  2019.  
4.52.  Mining and quarrying are primarily regulated under the Mineral Development Act  1994 
(Act 525), which lays out federal powers regarding mineral exploration, mining, and monitoring, and 
so-called Mineral Enactments adopted by the states in accordance with th e first National Mineral 
Policy (1993) and the National Mineral Policy  II (2009). The state Mineral Enactments cover the 
issuance of certificates, permits, and licences for prospecting and mining leases, as well as the 
payment of royalties and fees. The Ge ological Survey Act  1974, the National Land Code Act  1965 
(Act 56), and the Environmental Quality Act  1974 are also relevant to the mining sector. Under the 
latter, environmental impact assessments were required when the surface of a mining lease 
exceeded 250 hectares. The Act was subsequently revised to make environmental impact 
assessments necessary for all mining leases, regardless of size, under Schedule 2  of the 
Environmental Quality  Act. 
4.53.  The Government launched the National Mineral Industry Transforma tion Plan  2021-2030 in 
April 2021. The transformation plan, to be implemented during the current Twelfth  Plan and 
upcoming Thirteenth Malaysia Plan, seeks to raise the contribution of the sector to 1% of GDP 
by 2030, reduce trade imbalances, and develop th e entire value chain of the domestic mineral 
industry. Sustainable operations are to be underpinned by the deployment of state -of-the-art 
technology and human capital development. Enhanced processing techniques for strategic minerals 
such as tin ore, silica sand, kaolin, bauxite, and non -radioactive rare earth elements should reduce 
the current dependence on imported mineral resources.  
4.54.  The transformation plan foresees the establishment of a Mineral Industry Development Board 
(LPMM). The LPMM will play a leading role in spurring the development and governance of the mineral 
industry in a sustainable and holistic manner, which will include strengthening the enforcement and 
supervision of mines, quarry and mineral processing activities, and research and de velopment 
initiatives in mineral and mineral -based products for the global market, as well as the mapping, 
management, and monitoring of mineral resources. As for the National Mineral Council (MMN), 
disbanded in 2009, it has been revived to act as a consul tation platform specific to the mineral sector 
between the federal and state governments. It coordinates and deals with various issues related to 
minerals between the federal and state governments in an integrated manner and works in tandem 
with the Nation al Land Council (MTN), especially in the aspect of policies and legislation related to 
the mineral sector. At its inaugural meeting in February  2021, the new MMN considered several WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  issues, including working papers related to the industry transformation, su stainable mining activities, 
standard operating procedures for mineral mining and export, and mineral area zoning. It also 
approved standard operating procedure frameworks for bauxite mining (and exports) and 
non-radioactive rare earth elements.  
4.55.  At the fed eral level, the Ministry of Energy and Natural Resources formulates general policies 
and legislation for the exploration and extraction of minerals. The Mineral Development Act is 
enforced by the Department of Minerals and Geoscience Malaysia (JMG).71 Mineral rights are vested 
solely with the state authorities, and landowners do not have any automatic right to mineral 
resources on their land. State mineral resource committees review applications related to exploration 
and mining and forward their recommenda tions to the State Director of Land and Mines, who issues 
and administers licences for prospecting, exploration, and mining.72 
4.56.  The state Mineral Enactments stipulate that leases or licences may be granted to natural 
persons, companies, bodies expressly emp owered to hold mining land according to Malaysia's 
legislation, and foreign companies authorized to hold mining land. Prospecting licences cover smaller 
areas (25 -400 ha) compared to exploration licences (400 -25,000  ha) and are of shorter duration . 
Mining leases distinguish between small -scale and large operations, and whether the mining target 
is hard rock or alluvial. Mining leases, which include rights of storage, transportation, processing and 
sale of extracted minerals, are granted accordingly by the s tate authority and may be renewed upon 
application. Prospecting and exploration licences are subject to an annual holding fee. Mining leases 
require the payment of annual rent, and royalties on the output. Royalties are determined by the 
state authorities and may vary according to the type, weight, and volume of the mineral extracted, 
but typically amount to around 5% to 10% of the estimated market value. The lessee is also required 
to accumulate funds for the rehabilitation of the mining lands, and large -scale mining operations 
require the submission of rehabilitation plans. On privately owned land, competitive bidding may be 
applied at the discretion of the owner. However, on state -owned land, the state government will 
give priority to issue the mining ten ements to government -linked companies or to state agencies. 
The number of licences issued vary from one year to another (Table  4.13).  
Table 4.13 Mineral licences issued, 2017 -21 
(Number)  
 Exploration  Prospecti ng Mining lease  Proprietary 
mining  
2017 6 39 10 11 
2018 5 42 35 39 
2019 5 20 17 24 
2020 1 48 16 26 
2021 17 91 35 13 
Source:  Information provided by the authorities.  
4.57.  Reforms contemplated under the Mineral Industry Transformation Plan 2021-2030 include 
federal -state consultations to achieve uniformity in regulatory structure, royalty payments, and 
control of raw mineral exports. The federal legal framework is also to be reviewed to make it more 
robust.  
4.2.2   Energy  
4.2.2.1   General  
4.58.  The energy sector's legal framework comprises the Petroleum Development Act 1974, the 
Petroleum Mining Act  1966 (Act  95), the Electricity Supply Act  1990 (Act  447), the Electricity Supply 
(Amendment) Act  2015 (Act  A1501), the Gas Supply Act  1993 (Act  501),  the Gas Supply 
(Amendment) Act  2016 (Act  A1515), the Energy Commission Act 2001, the Energy Commission 
(Amendment) Act  2010, the Renewable Energy Act 2011, and the Sustainable Energy Development 
Authority Act 2011. Regulations to enforce the basic laws in clude the Electricity Regulations  1994 as 
amended in 2013 and 2014; the Electricity Supply (Compounding of Offences) Regulations  2001, 
 
71 The annual mineral reports need to be purchased from the JMG, e.g.  by contacting 
helpdesk@jmg.gov.my .  
72 Ten of Malaysia's 13  states have promulgated and gazetted the model State Mineral Enactment. The 
legal frameworks and procedures are somewhat different in Sarawak and Sabah.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  P.U.(A)  408; the Licensee Supply Regulations 1990; the Efficient Management of Electrical Energy 
Regulations  2008, (P.U.( A) 444); the Gas Supply Regulations 1997 , P.U.(A)  287, with amendments 
of 2014 and 2017; the Gas Supply (Compoundable Offences) Order  2006; and the Gas Supply 
(Compounding of Offences) Regulations  2006. In addition, various guidelines, circulars, and 
stand ards (for electrical equipment and gas piping systems) are applicable to the energy sector.  
4.59.  The National Energy Policy 2022 -2040 (DTN), launched on 19  September  2022, is the 
overarching national policy under the responsibility of the Economic Planning Unit  (EPU) under the 
Prime Minister's Department. DTN charts the way forward and outlines key priorities for Malaysia's 
energy sector encompassing both power and non -power as well as all energy sources, including oil, 
natural gas, coal, hydroelectric energy, s olar power, bioenergy, and other emerging energy sources. 
A National Energy Council is to be established, chaired by the Prime Minister with all ministries and 
agencies related to the energy sector as members, and EPU acting as the secretariat. DTN's 
progr essive Low Carbon Nation  2040 Aspiration should ensure that the energy sector will take full 
advantage of opportunities arising from the energy transition, as well as ensure the sector to be 
future -proof and strategically positioned to meet subsequent chal lenges.  
4.60.  The Energy Commission (EC) functions as the regulator for the energy sector, specifically the 
supply of electricity and piped gas in Peninsular Malaysia and Sabah.73 For Sarawak, the State 
Electrical Inspectorate regulates the electricity sector. The EC has control over certain aspects such 
as the promotion of economy in the generation, transmission, distribution, supply, and consumption 
of electricity and gas; competition and the scope for monopolistic behaviour; technical regulation to 
ensure rel iability, security, quality, and efficiency; and safety regulation to protect industrial users, 
consumers, and the public at large. The EC regulates all electrical equipment. A certificate of 
approval is obligatory for the manufacture, importation, display , sale, or advertisement of these 
items. Equipment imported for exhibition purposes must be returned to the country of origin after 
the event and may not be sold to the public.  
4.61.  DTN sets targets to increase the percentage of industrial and commercial electr icity savings 
from 1% in 2018 to 11%, and from 1% to 10% for residential energy efficiency savings, by 2040. 
Under the National Energy Efficiency Plan (NEEAP) 2016 -2025, Malaysia aims to save 52,233  GWh 
(accumulated over the implementing period). Thus, at the 10th year, the expected annual electricity 
reduction should be 8% (12,391  GWh) compared with a business -as-usual scenario. Key initiatives 
involve energy -efficient building design, energy audit and management for buildings and large and 
medium -sized in dustrial enterprises, the promotion of co -generation in industries and commercial 
buildings, and the promotion of 5 -star-rated electrical appliances and minimum energy performance 
standards (lighting and motors). The Sustainability Achieved Via Energy Effi ciency (SAVE) 
2.0 Programme, introduced in January  2021, provided domestic electricity consumers with 
MYR 200 vouchers that could be used, on a first -come , first-served basis, for the purchase of 
energy -efficient air conditioners and refrigerators, subsequ ently extended to other appliances such 
as washing machines and television sets.74 The SAVE  3.0 programme doubled the voucher amount 
starting from January  2022.  
4.62.  Malaysia is a significant producer of oil and gas, and fossil fuels continue to dominate the 
domestic energy mix (Table  4.14). The industry is an important sector for Malaysia, contributing 
20% to annual GDP. Natural gas resources are estimated to be about 100.7  trillion standard cubic 
feet (including deep -sea mining and Exclusive Economic Zones), r esources that could last up to 
40 years. These natural gas reserves place Malaysia among the top 15 countries worldwide and third 
in the Asia -Pacific region.  
Table 4.14 Primary energy supply and consumption, 2 015-19 
(Kilotonne oil equivalent (ktoe))  
 2015  2016  2017  2018  2019  
Total primary supply  
Natural gas  41,853  41,257  41,201  40,939  41,461  
Petroleum  29,165  31,327  29,379  29,429  32,813  
Coal and coke  17,406  18,744  20,771  22,280  21,057  
Biodiesel  389 389 379 436 648 
 
73 Discussions are unde r way for handing over the regulatory powers to the Sabah State Government in 
due course.  
74 The original SAVE programme designed under the Economic Transformation Program in 2011 also 
offered cash rebates (MYR  45 million in total) for the purchase of cert ain energy -efficient appliances.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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   2015  2016  2017  2018  2019  
Hydropower  1,346  1,723  2,287  2,265  2,251  
Biomass  189 198 194 241 204 
Biogas  18 21 41 147 118 
Solar 75 90 93 172 128 
Total  90,441  93,747  93,344  95,908  98,681  
Final energy consumption by fuel type  
Natural gas  9,566  12,304  16,838  18,851  18,647  
Petroleum products  28,699  30,348  30,862  30,409  31,835  
Coal and coke  1,778  1,785  1,804  1,808  1,706  
Biodiesel  389 389 379 436 648 
Electricity  11,397  12,394  12,607  13,153  13,647  
Total  51,829  57,219  62,489  64,658  66,483  
Final energy consumption by sector  
Industrial  13,989  16,019  17,463  19,046  18,921  
Transport  23,435  24,004  24,039  23,555  25,004  
Residential and commercial  7,559  8,049  7,796  7,774  8,001  
Non-energy use  5,928  8,729  12,517  13,262  13,631  
Agriculture  895 415 674 1,021  927 
Source:  Energy  Commission.  
4.63.  In 2018, Malaysia set a target for renewables to account for 20% of installed capacity 
by 2025. The initial target was revised, in 2020, to 31% by 2025 and 40% by 2035. The fulfilment 
of the targets relies to a large extent on private investment in solar power, thus maintaining 
incentives through the Green Technology Financing Scheme, the Green Investment Tax Allowance, 
and the Green Income Tax Exemption, as well as introducing other schemes. The Net Energy 
Meter ing programme, introduced in late 2018, allows private installations of solar panels to exchange 
excess energy generated with the grid.  
4.2.2.2   Petroleum and natural gas  
4.64.  The Petroleum Development Act  1974 provides for exploration and exploitation of petroleum, 
whether onshore or offshore, to be granted to Petroliam Nasional Berhad (PETRONAS), in which the 
entire ownership is vested as well as the exclusive rights, powers, liberties, and privileges in respect 
of the said petroleum . PETRONAS controls the carrying -on of downstream activities and development 
relating to petroleum and its products. Malaysia's remaining commercial reserves are estimated at 
over 17  billion barrels of oil equivalent from more than 400 fields, with gas making up three  quarters 
of the mix.75 Malaysia's known reserves of crude oil and natural gas are replenished through new 
discoveries, and this has allowed production to remain relatively stable to fulfil its energy security 
objective as set forth by the National Energy Policy 2022 -2040 (Table  4.15) . 
Table 4.15 Oil and gas production and use, 2014 -20 
 2014  2015  2016  2017  2018  2019  2020  
Oil 
Contribution to GDP (MYR  million)         
Crude and condensates  51,906  46,853  46,367  .. .. .. .. 
Refined petroleum products  38,156  34,151  32,288  .. .. .. .. 
Reserves (billion  bbl) 5.792  5.907  5,030  4,727  4,553  .. .. 
Production (bbl per day)  610 662 667 660 653 604 541 
Consumption (bbl per day)  802 751 838 801 801 841 728 
Natural gas  
Contribution to GDP (MYR  million)  51,102  49,561  50,248  .. .. .. .. 
Reserves (trillion scf)  100.7  100.4  87.8 82.9 79.5 .. .. 
Production (billion cubic m)  72.2 76.8 76.7 78.5 77.2 79.3 73.2 
Consumption (billion cubic m)  44.7 46.8 45.0 45.0 44.7 44.7 38.2 
.. Not available.  
Note:  bbl = barrel.  
 scf = standard cubic feet.  
Source:  WTO (2018); Energy Commission, Malaysia Energy Statistics Handbook  2020; and BP (2021), 
BP Statistical Review of World Energy – July 2021. 
 
75 PETRONAS, Overview of Production in Malaysia . Viewed at: 
https://www.petronas.com/mpm/malaysia -e-p/production .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.65.  Since its establishment in 1974, PETRONAS has been recognized as one of the largest 
corporations in the world, included in the Fortune Global 500 ranking with a global reach spanning 
more than 100 countries. As the custodian of Malaysia's national oil and gas resources, PETRONAS 
explores,  produces, and delivers energy, both hydrocarbon and renewables, to ensure the security 
of energy supply for Malaysia and around the globe. PETRONAS has five core businesses: upstream, 
downstream, gas, clean energy solutions, and project delivery and techn ology. Globally, PETRONAS' 
production averaged 2.275  million barrels of oil equivalent per day in 2021, 3% more than in 2020. 
Through its gas business, PETRONAS is a leading producer and supplier of natural gas, having 
supported the energy security of over  25 countries for the past 40  years. PETRONAS is also the 
largest producer of petrochemicals in Southeast Asia, with a production capacity of more than 
12.8 million tonnes per year. Its outputs include olefins, polymers, fertilizers, methanol, and 
specialt y chemicals. The company's refining capacity amounts to more than 700,000  barrels per day 
for making high -value products such as petrol, kerosene, jet fuel, gasoil, bitumen, fuel oil, and 
lubricant base oil.  
4.66.  Although PETRONAS recorded an operating loss in 2020, the rebound in energy prices helped 
profits bounce to MYR  48.6 billion in 2021 from group revenue of MYR  248 billion.76 PETRONAS is a 
significant contributor to federal and state government revenue from its payments of income tax, 
state sales tax, ex port duty, and cash payments to the federal and state governments. However, 
the most important fiscal element is the payment of company dividend, and hence public revenues 
peaked in 2019 as PETRONAS responded to the Government's call for a special dividend  to its budget 
(Chart  4.3). The extraordinary dividend amounted to MYR  30 billion.  
Chart 4.3 PETRONAS' contribution to government and state revenues, 2016 -21 
(MYR billion)  
 
Source:  PETRONAS , Integrated Report , various editions, 2020 and 2021.  
4.67.  The Petroleum Income Tax Act  1967 subjects upstream oil and gas companies to a tax rate 
of 38% on their net income from operations in Malaysia. In addition, extracted oil is charged royalty 
(10%), and a 10% export duty is  applied to shipments of crude oil from Malaysia. To encourage the 
development of marginal fields, the income tax rate is lower (25%), the export duty is waived, and 
accelerated capital allowances and other incentives are also available. Downstream busines s is taxed 
at the statutory rate of 24%.  
4.68.  PETRONAS has announced its ambition to achieve net zero carbon emissions by 2050. In the 
near term, the company aims at capping the greenhouse gas emissions from its operations in 
Malaysia at 49.5  million  tonnes of carbon dioxide equivalent, and to increase its renewable energy 
capacity to 3,000  MW, by 2024.  
4.69.  Regarding biofuels, the blending of palm oil with petroleum diesel began with the 
B5 programme in 2011. The 5% blend -in level was increased to 7% in December  2014 and 10% 
effective February  2019.77 Phased implementation of the B20  programme (i.e.  a mixture of 20% 
 
76 PETRONAS, Integrated Report  2021. Viewed at: https://www.petronas.com/integrated -report -2021/ . 
77 Since July  2019, blend -in of 7% palm oil (B7) has been mandatory for all industrial users except in 
power generation and the maritime and bunkering sectors.  
0102030405060708090
2016 2017 2018 2019 2020 2021National Trust Fund
Export duties
State sales tax
Cash payments
Taxes
DividendChart 4. [MYS]   PETRONAS' contribution to government and state revenues, 2016 -2021
Source:  PETRONAS Integrated Report 2020 and 2021 .(MYR billion)WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  palm biodiesel with 80% petroleum diesel) began under the National Biofuel Policy in 2020, with the 
nationwide roll -out dependent on infrastr ucture readiness. The B30 programme is envisaged to be 
implemented by 2030, or earlier, according to the availability of pertinent technical data.78 In 
addition, renewable hydrocarbon fuel or palm -based hydrotreated vegetable oil may be introduced 
in the f uture.  
4.2.2.3   Electricity  
4.70.  Malaysia has three geographically separated electricity networks, each with its own 
government -linked transmission company. TNB, which owns and controls the grid in Peninsular 
Malaysia, purchases some electricity from its subsidiary TNB Generation as well as from independent 
power producers (IPPs), though some of them are part -owned. TNB sells the electricity to licensed 
distributors or in some cases directly to large industrial users. Sarawak Electricity Berhad (SEB) is 
the sole generato r, transmitter, and distributor of electricity in Sarawak, while Sabah Electricity 
Sendirian Berhad (SESB) operates much like TNB in Sabah. Total available generating capacity at 
the end of 2019 amounted to 32,019  MW, of which 65% was held by IPPs in Penin sular Malaysia. 
The total nationwide capacity of coal -fired generating plants (13,067  MW) was slightly higher than 
for those operated with natural gas (12,540  MW), but well ahead of hydropower (6,062  MW). The 
grid in Peninsular Malaysia is connected with T hailand and Singapore, which enhances the security 
and reliability of their electricity supply systems. In 2020, the national utilities of four countries 
(Lao People's Democratic Republic, Malaysia (i.e.  TNB), Singapore, and Thailand) committed to 
cross-border trade from Lao  People's Democratic Republic to Singapore through the existing 
interconnection lines of up to 100  MW in 2022 and 2023.  
4.71.  Domestic demand for electricity rose almost three -fold from 2000 to 2019 (Chart  4.4). The 
expansion of the generating  capacity to match the higher demand was met with coal as the primary 
source of additional energy. A massive increase in solar power capacity is expected in coming years. 
Although coal has been a major fuel for power generation due to its relatively cheape r pricing, the 
Government has decided to halt construction of new coal -fired power plants. From 2030, when 
current coal -fired plant concessions end, power generation is expected to be fuelled by gas and 
renewables.  
Chart 4.4 Electricity generation mix, 1990 -2019  
 
Source:  Energy  Commission, Malaysia Energy Statistics Handbook  2020. 
4.72.  The COVID -19 pandemic reduced overall demand for electricity and affected the planning and 
implementation of new generation and tra nsmission projects. However, while the MCOs and 
economic uncertainty reduced the demand from industries and commercial business, residential 
consumption rose with the mandatory requirement to stay at home. To alleviate consumers facing 
significantly higher  utility bills, the Government introduced several rebate schemes (monthly 
discounts to selected sectors and the public). The Prihatin Rakyat Economic Stimulus package 
provided discounts ranging from 15% to 50% to residents in Peninsular Malaysia on electri city 
consumed between 1  April and 30  September  2020; the discounts (2% to 50%) were subsequently 
 
78 Ministry of Plantation Industries and Commodities, Biofuel Industry . Viewed at: 
https://www.mpic.gov.my/mpi/en/biofuel -industry .  
020,00040,00060,00080,000100,000120,000140,000160,000180,000200,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019Other
Distillate/Diesel
Oil
Coal
Gas
HydroChart 4. [MYS]   Electricity generation mix, 1990 -2019
Source:  Malaysia Energy Statistics Handbook 2020.(GWh)WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 96 - 
 
  extended in stages to all domestic consumers in Peninsular Malaysia and Sabah and Sarawak (2%) 
until the end of 2021. In August  2022, the Government agreed to maintain the electricity tariff with 
a surcharge of 3.7  sen/kWh for non -domestic customers and a rebate of 2  sen/kWh for domestic 
customers.  
4.73.  The Peninsular Malaysia Generation Development Plan (2020 -2039), approved by the 
Planning and Implementation Committee for Electricity Supply and Tariff (JPPPET) in October  2020, 
was subsequently accepted by the Government. The targeting of renewables to account for 
significantly higher shares of Malaysia's energy supply is largely to be met throug h major expansion 
of solar power. The initial 20% target (by 2025) was estimated to require investments amounting 
to MYR  33 billion, primarily to be funded through public -private partnerships and private financing. 
The Government thus launched the Malaysia n Electricity to Attract Renewable Energy Investment 
(MEnTARI) programme. With the upward revision of the target, the Large Scale Solar by Malaysian 
Electricity Industry to Attract RE Investment (LSS@MEnTARI) was launched in 2020. Competitive 
bidding for l arge-scale solar photovoltaic (PV) plants was introduced in 2016. Tenders under the 
Second Large Scale Solar Bidding Cycle (LSS2) and Third Large Scale Solar Bidding Cycle (LSS3) 
were carried out in 2019. The total capacity of the 35  projects approved unde r LSS2 amounted to 
522.44  MW, to which the 5 projects implemented under LSS3 added 490.88 MW of new capacity.79 
4.74.  The feed -in tariff incentive scheme (from 2011) was replaced by net metering in 
January  2016. At the outset, the excess power sold by solar PV o wners into the grid was priced lower 
than electricity consumed from the grid. The scheme was made more attractive in 2017, and the 
Net Energy Metering  2.0 programme (NEM  2.0) launched in 2019, which provided a one -to-one rate 
for electricity exchanges with  the grid, saw its 500  MW quota fully subscribed by the time of its 
expiry (December  2020). The NEM  3.0 programme, introduced in 2020, allocates 500  MW of 
solar PV rooftop capacity through three sub -schemes: (i)  100 MW for residential systems under NEM 
Rakyat with a net metering tariff for 10 years; (ii)  100 MW for government ministries and public 
entities under NEM GoMEn with the same conditions as NEM Rakyat; and (iii)  300 MW under NEM 
Nova (net offset virtual aggregation) for commercial and industrial ow ners, whereby they will be 
able to sell excess power to the grid at market price or the system marginal price.80 The NET  3.0 
programme will be in force until the end of 2023.  
4.75.  According to the International Renewable Energy Agency (IRENA), solar power repre sented 
17% of the net capacity change in Malaysia's electricity sector in 2021.81 However, the renewable 
energy capacity continues to be dominated by hydro/marine power (70%), followed by solar (20%) 
and bioenergy (10%). Non -renewable sources accounted for  84% of the 175,995  GWh of electricity 
generated in Malaysia in 2020, and hydro and marine power (15%) represented nearly all the 
electricity generated from renewable sources.  
4.76.  The EC regulates the price of natural gas sold by PETRONAS to the power sector ( Table  4.16). 
The Government decided in 2017 that the regulated price should be increased by 
MYR 1.50 per mmBtu every six  months until the price reaches the market price derived from the 
LNG price reference index formula.82 The first price increase was impl emented in July  2017. The 
decision was applicable until 2020, with a price setting review to be conducted in 2021.83 
Table 4.16 Regulated prices for natural gas in Malaysia, January2014 -December2019  
(Prices per mmBtu)   
Power  
sector  Gas Malaysia 
Bhd ( GMB) GMB 
customers  Other 
industrial 
customers  
Regulated prices in MYR   
   
January -April 2014 15.2 14.05  16.07  18.35  
May-October  2014 15.2 15.55  19.32  19.85  
 
79 Energy Commission, Annual Report 2020 , pp. 128-129. 
80 The system marginal price is defined as the most expensive marginal generator scheduled or 
dispatched to meet demand in a half -hour period.   
81 Non-renewable energy accounted for 81% of the net capacity change. IRENA, Energy Profile –
Malaysia . Viewed at: 
https://www.irena.org/IRENADocuments/S tatistical_Profiles/Asia/Malaysia_Asia_RE_SP.pdf .  
82 The reference market price should correspond to the wholesale market price in Peninsular Malaysia in 
the absence of competition.  
83 Energy Commission, Annual Report 2020 .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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Power  
sector  Gas Malaysia 
Bhd ( GMB) GMB 
customers  Other 
industrial 
customers  
November  2014-June 2015 15.2 17.05  19.77  21.35  
July-December  2015 16.7 18.55  21.8 22.85  
January -June 2016 18.2 20.05  25.53  24.35  
July-December  2016 19.7 21.55  27.05  25.85  
January -June 2017 21.2 23.05  26.31  27.35  
July-December  2017 22.7 24.55  26.46  28.85  
January -June 2018 24.2 26.05  .. 30.35  
July-December  2018 25.7 27.55  .. 31.85  
January -June 2019 27.2 29.05  .. 33.35  
July-December  2019 28.7 30.55  .. 34.85  
.. Not available.  
Source:  Energy  Commission, Malaysia Energy Statistics Handbook 2020 . 
4.77.  The price of natural gas for the power and non -power sectors reached market parity in 
January  2020. As such, the EC has no longer published the gas price since then. In order to address 
concerns raised  by industry regarding price volatility in the spot LNG market, the Government agreed 
to continue to regulate the price of natural gas to the non -power sector for two  years (2020 
and 2021). The price has been fully liberalized since 1  January  2022. As for the power sector, the 
Government continued to regulate the gas price to support the economic recovery in 2021. A two -tier 
pricing mechanism was introduced in 2022 to minimize the impact of rising gas prices on the 
electricity tariff.  
4.3  Manufacturing  
4.3.1   General  
4.78.  The manufacturing sector has been a key driver in Malaysia's development and economic 
transformation. Its share of GDP stood at 23.5% in 2021, a rise from 21.8% in 2017 (Table  1.2). 
About 17% of the workforce is employed in manufacturing, and its output sp ans the entire spectrum 
of food, beverages and tobacco, palm oil processing, rubber and plastics, petroleum products, 
chemicals, pharmaceuticals and medical technology, textiles, wood products, basic metal and metal 
products, motor vehicles, and electrical  and electronic goods. The product categories machinery, 
electrical equipment, and precision equipment alone made up 47% of Malaysia's exports in 2021 
(Chart  1.1). Nearly all companies (98%) in the sector are SMEs focused on the domestic market, 
but many o f them are thought to have significant export potential.84 
4.79.  According to the EPU, the sector needs to strengthen its competitiveness, resilience, and 
capacity so as to position itself for global and regional opportunities and challenges in trade and 
investm ent. The focus will be to accelerate technology adaptation and enhanced incentives to 
encourage investments in high value -added industries.85 In addition to the catalytic subsectors 
(electrical and electronics, machinery and equipment, and chemicals and ch emical products), 
Malaysia sees aerospace and medical devices as high -growth subsectors to be explored.  
4.80.  The Twelfth Plan sets an annual average growth target of 5.7% for the manufacturing sector. 
For the electrical and electronics subsector, where the aim is that it should contribute MYR  120 billion 
to GDP by 2025, the growth target is even higher. The Twelfth  Plan notes that Malaysian 
manufacturing's strong reliance on easy access to low - or semi -skilled foreign workers has been 
attractive for low -quality investments, implying a focus on back -end activities such as assembly, 
testing, and packaging.86 Upgrading the skills of employees, inclusive involvement of SMEs, 
adaptation of new technologies, and significantly increased spending on research and developm ent 
will therefore be required to drive the transformation towards high -end production in the years to 
come. Towards embracing the Fourth Industrial Revolution (4IR), the Malaysian Investment 
Development Authority (MIDA ) offers facilitation to companies in vesting in 4IR -enabling technologies 
 
84 SMEs accounted for 42.1% of m anufacturing employment, according to the 2016 economic census.  
85 Economic Planning Unit, Manufacturing . Viewed at: https://www.epu.gov.my/en/e conomic -
developments/development -policies/key -policies/manufacturing .  
86 Foreign labourers make up 26% of the manufacturing workforce.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  such as artificial intelligence, robotics, virtual reality, big data analytics, the Internet of Things, and 
software engineering.87 
4.81.  The Industry 4WRD: National Policy on Industry  4.0, presented by MITI in 2018, summariz es 
the 4IR as the application of advanced digitization, advanced manufacturing technologies, and 
efficient resource allocation to infuse higher value -added manufacturing processes. Focus sectors 
under Industry  4.0 include electrical and electronics, machin ery and equipment, chemicals, medical 
devices, and aerospace. Incentives, notably tax incentives, are to be linked to specific outcomes. 
Launched in 2020, the Industry  4WRD Intervention Fund provides cost -shared assistance to SMEs 
and enterprises in manufa cturing and related services (Section  3.3.1). Under the Eleventh and 
Twelfth Plans and the financial aid package PEMERKASA, a total of MYR  156 million has been 
allocated for the Industry  4WRD Intervention Fund programme. Funds will be provided on a 
matchin g basis (70:30) based on eligible expenditures up to a maximum grant of MYR  500,000. No 
more than 30% of the 70% matching amount may be provided upfront to the companies, subject 
to the approval of the Intervention Fund Approval Committee, whereby the bala nce of the remaining 
matching grant will be on a reimbursable basis which will be deliberated at MIDA. The Smart 
Automation Grant, designed to accelerate the adoption of automation, has a combined funding of 
MYR 200 million under the PENJANA and PEMERKASA stimulus packages as well as the 2022 Budget. 
The grant is offered to Malaysian SMEs and mid -tier companies in the manufacturing and services 
sectors on a matching basis (1:1) based on eligible expenditures up to a maximum grant of 
MYR 1 million per compan y. 
4.82.  The implementation of manufacturing projects in Malaysia requires a manufacturing licence 
as per the Industrial Coordination Act  1975. Licence applications are processed by MIDA, and 100% 
foreign equity investments are permitted. For importation (and ex portation) of certain goods, 
including motor vehicles, heavy machinery, and various chemicals and iron and steel products, an 
approved permit (AP) system is administered by MITI.  
4.3.2   Motor vehicles  
4.83.  Malaysia launched its first national car in 1983, and two  dome stic companies (first  Proton 
Cars, and then Perodua from 1993) led the transition from assembly operations towards car 
manufacturing.88 A competitive automotive sector, capable of exporting its output, was a primary 
motivation for the National Automotive P olicy presented in 2006. The Policy was reviewed in 2009 
to create a more conducive environment for investment, and the 2014 version of the Policy focused 
on developing Malaysia into a hub for energy -efficient  vehicles by 2020 with parameters such as fuel 
efficiency, the use of light materials, telematics, tooling, and component design. A National Emission 
Test Centre was established to measure the exhaust emission from passenger and light -duty vehicles 
for the purposes of vehicle type approval, conformity of production, and research and development 
activities. The testing focuses not only on chassis dyno where all parameters are controlled, but the 
facility also includes testing for real driving emissions, where equipment is installed to collect and 
read th e exhaust emission from the vehicle during real driving on the road. With both of these 
activities, all stakeholders including vehicle manufacturers and the Government may assess more 
accurately the gases emitted from motor vehicles. In the domestic market , the share of 
energy -efficient  vehicles sold rose from 14% in 2014 to 82% in 2021. The manufacturing of vehicle 
parts and components is of equal importance to the success of the automotive industry. Malaysia's 
exports of parts and components amounted to MYR  11.3 billion in 2020 and MYR  13.1 billion in 2021.  
4.84.  The new National Automotive Policy 2020 aims to shift the automotive industry gearing 
towards digitalization by  2030. A number of technology development projects are being launched, 
and the new MARii Design Centre specifically addres sed implementation of Industry  4.0 in design 
engineering, simulation, and prototyping. In addition to the digital transformation (Industry  4.0), 
the key focus in the 2020 Policy is the evolution of next generation vehicles (NxGV), where the 
target is for M alaysia to become a regional hub, and increasing domestic industry participation in 
the concept "mobility as a service" (MaaS), which spans not only technological advances but the 
 
87 MIDA , Manufacturing . Viewed at: https://www.mida.gov.my/industries/manufacturing/ .  
88 The Chinese Geely Auto Group acquired 49.9% of Proton Cars in 2017.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  transportation ecosystem as a whole. Improved fuel economy levels by 2025 sh ould reduce carbon 
emissions from vehicles in Malaysia.89 
4.85.  Support for implementation of the National Automotive Policy 2020 may be provided from the 
High Impact Fund, the Domestic Investment Strategic Fund, the SMART Fund, the Enterprise 
InnoFund and Inter national Collaboration Fund, the Technology Acquisition Fund, the 
Commercialisation of Research and Development Fund, and the Cradle Fund, as well as through an 
expansion of soft loans .90 The Policy calls for the review of incentives to enhance the partici pation 
of local companies in value added activities in the supply chain. The Multi -Sourcing Parts scheme 
was abolished in 2021 to encourage local (or FTA partner) sourcing.  
4.86.  The AP system for importation of cars and motorcycles was modified in January  2019 with 
the introduction of the New Open AP Policy. The policy provides wider opportunities for Bumiputera 
entrepreneurs to be involved in the importation of second -hand passenger vehicles and motorcycles. 
Buyers must be provided minimum one -year warranty and  maintenance (in collaboration with the 
original equipment manufacturer). The import fee amounts to MYR  10,000 per vehicle for the 
first 35,000  units imported by all Open AP holders per calendar year, and MYR  20,000 for each 
additional vehicle. A Franchise  AP policy is continued for monitoring and data collection purposes. 
The current AP system effectively caps imports of motor vehicles at 10% of the domestic market. 
Moreover, the National Automotive Policy distinguishes between "national" and "non -national  cars". 
The latter includes imports as well as vehicles assembled or manufactured in Malaysia by 
non-Malaysian automakers. Traffic restrictions and noise standards restrict the use of large 
motorcycles.  
4.87.  The Government supports the propagation of electric v ehicles (EV) to reduce carbon emissions 
with tax incentives for vehicle owners as well as manufacturers. The EV incentive package covers 
(i) full exemption of import duty, excise duty, and sales tax on locally assembled or completely 
knocked -down EVs for a  period of four  years (until 2025); (ii)  full exemption of import duty and 
excise duty on the importation of completely built -up EVs for a period of two years (until 2023); 
(iii) individual income tax relief up to MYR  2,500 for installation, rental, and pu rchase costs including 
equipment hire -purchase or EV charging facility subscription fees; and (iv)  road tax exemption up 
to 100% for EVs for a period of four  years (until 2025). Additional incentives cover (i)  an income tax 
exemption for investors in manuf acturing/assembly of vehicles and critical components, i.e.  the 
"Pioneer Status" incentive of 70% or 100% for a period of 5 or 10  years or the "investment tax 
allowance" of 60% or 100% for a period of 5 or 10  years; (ii)  an income tax exemption for green 
technology services of 70% for a period of three  years for EV charging stations, EV infrastructure 
repairs, EV maintenance, and EV installation; and (iii)  green technology tax incentives for the 
purchase and use of green technology, i.e. the Green Investmen t Tax Allowance for the purchase of 
green technology equipment and assets and the Green Income Tax Exemption for green technology 
service providers.  
4.88.  Volvo Car Malaysia has rolled out the first locally assembled EV, and other major 
manufacturers are present ing plans to set up assembly of EVs in Malaysia.  
4.4  Services  
4.4.1   General  
4.89.  Services, including governmental services, continued to grow and expand their share of GDP 
through 2019, when the overall share reached 57.6%. Wholesale and retail trade is the largest 
subsector, well ahead of government services (Table  4.17). Although the onset of the COVID -19 
pandemic caused value added to fall in services overall in 2020, the corresponding share of services 
in GDP continued to rise, as the negative impact of t he pandemic was stronger in other segments of 
the economy. In 2021, a firmer rebound elsewhere in the economy brought the services share down 
to 57% of GDP. The pandemic affected services unevenly, as transportation, in particular air 
transport, accommodat ion, food and beverage, administrative and support services, and real estate 
 
89 Among the measures contemplated, new manufacturing licences for the  production of 
non-energy -efficient vehicles are not to be issued.  
90 These funds are existing funds supporting industrial development and not limited to the automotive 
industry.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  were hard hit. Other key sectors such as telecommunications, finance, and insurance continued to 
grow on a robust path.  
Table 4.17 Services contribution to GDP, 2017 -21 
(MYR billion, %)   
MYR billion at constant 2015 prices  Percentage annual growth at constant 
2015 prices  
2017  2018  2019  2020a 2021a 2017  2018  2019  2020a 2021a 
Services  723.4  773.0  820.6  776.4  791.1  6.3 6.9 6.2 -5.4 1.9 
Utilities  34.4 36.1 38.3 37.9 38.8 2.9 5.0 6.1 -1.2 2.6 
 Electricity and gas  27.7 28.9 30.6 29.6 30.0 2.2 4.6 5.8 -3.4 1.6 
 Water, sewerage and 
waste management  6.7 7.2 7.7 8.3 8.8 6.1 6.7 7.7 7.3 6.1 
Wholesale and 
retail trade  209.9  227.2  242.7  228.3  232.0  7.2 8.2 6.8 -6.0 1.6 
 Wholesale trade  94.9 101.9  107.7  101.7  104.9  6.6 7.4 5.7 -5.5 3.1 
 Retail trade  92.1 101.5  110.2  104.0  107.3  9.5 10.2 8.6 -5.7 3.2 
 Motor vehicles  23.0 23.8 24.8 22.6 19.8 1.3 3.8 4.2 -8.8 -12.6 
Food & beverage 
and 
accommodation  41.7 45.5 49.8 36.5 32.5 7.5 9.0 9.5 -26.7 -11.0 
 Food and beverage  33.0 36.3 40.0 31.7 28.8 8.1 9.7 10.2 -20.8 -8.9 
 Accommodation  8.7 9.2 9.9 4.9 3.7 5.4 6.1 6.6 -50.7 -24.3 
Transportation and 
storage  47.2 50.2 53.6 42.1 42.7 6.2 6.3 6.8 -21.4 1.3 
 Land transport  11.7 12.5 13.5 9.8 10.0 6.9 7.0 7.6 -27.0 1.9 
 Water transport  6.3 6.5 6.6 6.0 6.2 2.2 2.5 2.5 -9.4 3.1 
 Air transport  6.1 6.2 6.4 2.2 1.5 3.2 1.9 2.9 -65.5 -30.4 
 Port and airport 
operation  6.7 7.3 7.9 7.2 7.3 8.1 8.5 8.7 -10.0 2.3 
 Highway operation  7.1 7.7 8.4 7.2 7.0 7.9 8.0 8.5 -14.2 -2.2 
 Support activities for 
transportation  7.2 7.8 8.4 7.0 7.4 7.4 7.7 8.1 -17.3 5.9 
 Postal and courier  2.0 2.2 2.4 2.8 3.2 7.5 9.6 9.6 16.3 14.5 
Information and 
communication  73.1 79.1 84.2 89.3 94.9 8.6 8.2 6.5 6.0 6.3 
 Publishing and 
broadcasting 
activities  7.4 7.8 8.1 7.1 7.1 7.3 5.6 3.9 -11.7 -1.1 
 Telecommunications  49.1 53.3 57.1 62.5 67.8 9.3 8.7 7.0 9.4 8.5 
 Computer and 
information service 
activities  16.7 18.0 19.1 19.6 20.0 7.2 7.8 5.8 3.2 2.1 
Finance  64.0 66.5 69.4 71.0 77.5 5.1 3.9 4.4 2.3 9.2 
 Monetary 
intermediation  53.8 56.1 58.5 58.7 64.8 4.5 4.2 4.3 0.3 10.5 
 Other financial 
intermediation and 
activities auxiliary to 
finance  10.1 10.4 10.9 12.3 12.7 8.4 2.3 4.9 13.1 3.0 
Insurance  20.6 22.6 24.0 25.1 28.2 3.6 9.9 6.0 4.8 12.3 
 Insurance and 
pension funding  19.9 22.0 23.4 24.6 27.6 3.7 10.2 6.3 5.2 12.5 
 Activities auxiliary to 
insurance  0.6 0.6 0.6 0.6 0.6 1.3 3.0 -3.5 -8.0 7.6 
Real estate  19.4 20.4 21.4 17.5 15.2 5.3 5.1 5.2 -18.3 -13.1 
Business services  39.7 43.3 47.3 40.9 36.8 8.7 9.1 9.1 -13.6 -10.1 
 Professional, 
scientific and 
technical  27.2 29.8 32.7 30.0 28.0 9.4 9.7 9.8 -8.2 -6.8 
 Administrative and 
support services  12.6 13.6 14.6 10.9 8.8 7.3 7.8 7.8 -25.8 -19.1 
Owner occupied 
dwelling  28.8 30.1 31.5 32.4 32.9 4.7 4.6 4.6 2.9 1.4 
Community, social 
and personal 
services  33.3 35.5 37.8 29.5 27.0 5.6 6.4 6.6 -21.8 -8.5 
 Private health 
services  9.0 9.5 10.1 9.4 10.2 5.8 6.0 5.9 -6.2 7.9 
 Private education 
services  10.5 11.2 11.8 11.0 10.5 6.5 6.2 5.8 -7.0 -4.4 
 Other private 
services  13.8 14.8 16.0 9.1 6.4 4.8 6.9 7.6 -42.6 -30.5 
Government 
services  109.7  114.9  118.8  124.2  131.0  4.8 4.7 3.4 4.6 5.4 
 General public 
services  15.9 14.7 14.2 16.0 15.9 -5.0 -7.3 -3.3 12.4 -0.8 
 Defence  9.0 7.9 7.8 8.1 8.2 3.2 -12.4 -1.4 4.4 0.7 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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MYR billion at constant 2015 prices  Percentage annual growth at constant 
2015 prices  
2017  2018  2019  2020a 2021a 2017  2018  2019  2020a 2021a 
 Public order and 
safety  10.3 10.4 9.7 10.2 10.7 4.0 1.0 -7.0 5.0 4.6 
 Economic affairs  9.4 14.4 16.1 16.9 16.7 8.0 53.9 11.8 5.1 -1.6 
 Environmental 
protection  0.4 0.3 0.3 0.4 0.4 7.8 -18.7 3.4 20.4 -8.3 
 Housing and 
community amenities  1.9 2.4 3.0 3.0 4.2 25.2 29.7 22.5 2.6 38.4 
 Health  15.8 16.6 17.7 19.6 21.4 8.0 4.8 6.5 11.1 9.0 
 Recreation, culture 
and religion  2.1 1.7 2.2 2.4 2.5 13.9 -17.1 28.2 9.6 2.6 
 Education  43.6 44.3 46.1 45.9 49.5 6.2 1.5 4.1 -0.6 7.9 
 Social protection  1.3 2.1 1.7 1.7 1.7 16.9 57.2 -18.4 -2.1 3.0 
Non-profit 
institutions serving 
households  0.3 0.4 0.4 0.4 0.5 3.6 3.8 5.2 12.3 26.0 
Domestic services 
of households  1.2 1.2 1.3 1.2 1.0 1.5 2.3 3.4 -8.6 -13.8 
a Estimate.  
Source:  WTO Secretariat calculations, based on Department of Statistics Malaysia (2022), Annual Gross 
Domestic Production, 2015 -2021; and information provided by the authorities.  
4.90.  Under the guidance of the Ministry of International Trade and Industry (MITI), the Malaysia 
Services Development Council serves as a platform to discuss cross -cutting policy issues. Regulatory 
and institutional barriers may be examined with the Malaysia Productivity Corporation and other 
stakeholders. MITI is in the midst of realigning i ts roles and functions under the New Industrial 
Master Plan (2021 -2030) and the National Oversight Productivity Council.  
4.91.  Since 2012, when Malaysia liberalized an additional 18 services subsectors, there have been 
no new initiatives on a similar scale. Asid e from its GATS commitments, Malaysia is part of several 
initiatives in the context of ASEAN, ASEAN FTAs, and other regional and bilateral agreements and 
arrangements to facilitate trade in services and market access for specific types of services provider s 
(Section  2.3). 
4.4.2   Financial services  
4.4.2.1   General  
4.92.  The financial sector, which comprises conventional and Islamic banking and insurance, 
development financial institutions, investment banks, fund management, and financial 
intermediation, contributed about 7% to G DP in 2021 and employed around 2.5% of the 
overall  workforce. As an indicator of financial openness, the central bank – Bank Negara Malaysia 
(BNM) – reported that the sum of external assets and liabilities amounted to the equivalent of 266% 
of GDP at the e nd of 2020.91 
4.93.  The BNM regulates and supervises financial institutions to ensure their safety and soundness. 
It also oversees the money and foreign exchange markets to maintain their integrity and orderly 
functioning, and payments systems to foster safe, ef ficient, and reliable instruments and 
transactions. The principal regulatory framework for banking, Islamic banking, insurance, and 
takaful comprises the Central Bank of Malaysia Act 2009, the Financial Services Act  2013 (FSA), the 
Islamic Financial Servic es Act  2013 (IFSA), and the Development Financial Institutions Act  2002 
(Act 618). Although the basic legal framework was not amended during the review period, BNM 
periodically issues policy documents comprising standards, guidelines, and discussion papers  that 
may have a bearing on the industry. In all, some 49 such documents of relevance to conventional 
and Islamic banking, and 43  documents for the insurance and takaful business, have been released 
since early 2018.92 Supervision of money services busines ses is based on the Money Services 
Business Act  2011. The Anti -Money Laundering, Anti -Terrorism Financing and Proceeds of Unlawful 
Activities Act  2001 (Act  613) is applicable to all financial institutions as well as designated 
non-financial businesses and professions in line with the International Standards on Combating 
 
91 BNM, Annual Report 2020 , p. 14. Viewed at: https://www.bnm.gov.my/o/ar2020/index.html .  
92 BNM, Banking & Islamic Banking . Viewed at: https://www.bnm.gov.my/banking -islamic -banking ; and 
Insurance & Takaful . Viewed at: https://www.bnm.gov.my/insurance -takaful . WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Money Laundering and the Financing of Terrorism and Proliferation (FATF Recommendations). In 
addition, the Currency Act  2020, which entered into force on 1  October  2020, regulates the 
manage ment and processing of currency activities. The Act provides BNM with sole authority to issue 
currency in Malaysia and establishes a registration system for currency processing businesses.  
4.94.  BNM regulates and supervises investment banks together with Securit ies Commission 
Malaysia. The Commission also oversees capital market intermediaries, including fund managers, 
broker -dealers, and the securities and derivatives markets. The Labuan Financial Services Authority 
supervises the offshore Labuan International B usiness and Financial Centre (LIBFC). Activities at the 
LIBFC are carried out exclusively in foreign currency and mostly with non -resident clients.93 
4.95.  The Twelfth Plan aims to sustain Malaysia's position as a leading international Islamic financial 
centre w here measures will be undertaken to develop more innovative market -based mechanisms 
and products, leveraging Islamic fintech, to better serve the needs of a wider financial market and 
the economy. This shows that the sector plays a key role in the channell ing of resources to productive 
activities that sustain growth. Launched on 24  January  2022, the Financial Sector Blueprint 
2022-2026 follows five basic thrusts: (i)  the funding of Malaysia's transformation to a high -income 
country; (ii)  improved financial inclusion through instruments such as mobile banking, enhanced 
financial ethics, and resilience measures that strengthen the financial well -being of households and 
businesses; (iii)  infrastructure and regulatory practices dedicated to better digital financ ial services 
while managing cybersecurity risks; (iv)  climate risks to be integrated into BNM's supervisory and 
prudential regulatory roles and internal processes to facilitate orderly transition to a greener 
economy; and (v)  Malaysia as an international g ateway for Islamic finance, including through 
advancing value -based finance and mainstreaming social finance. As the digitalization of finance 
continues, focus areas may include digital currencies, assets, and banks; decentralized finance, and 
financial te chnology; and the diminishing role of physical cash. The Regulatory Sandbox created 
in 2016 is providing a conducive experimental environment for innovative fintech solutions and new 
business models. Finance for all, wider adoption of value -based intermedi ation, and steady progress 
in greening finance are among the desired outcomes to be achieved by 2026.  
4.4.2.2   Banking  
4.96.  A licence granted by the Minister of Finance is needed to operate a bank in Malaysia. The 
licence application is reviewed by BNM, which forwards i ts recommendation to the Minister. 
Incorporation in Malaysia is required for all banks except international Islamic banks, which may opt 
for local incorporation or operation as a branch. Once incorporated in Malaysia, foreign -owned 
commercial banks may est ablish up to 8 physical branches and 10 microfinance branches. While 
foreign banks are required to observe a specified distance requirement (more than 1.5  km away 
from the nearest domestic banks/Development Finance Institutions (DFIs)) in establishing new 
branches, the authorities state that, in practice, foreign banks have been given flexibility to open 
branches in the vicinity of domestic banks. Foreign banks are also allowed to establish automated 
teller machines within their branch, with no limits on th e number of machines.  
4.97.  The principal regulatory objective of the FSA and the IFSA (which also contains provisions 
relating to Shariah requirements) is to promote financial stability, and in doing so BNM should foster 
safe and sound financial institutions; t he integrity and orderly functioning of the money and foreign 
exchange markets; safe, efficient, and reliable payment systems and payment instruments; fair, 
responsible, and professional business conduct; and aim at protecting rights and interests of 
consu mers of financial services and products. BNM uses several criteria in the consideration of an 
application for a banking licence under the FSA and the IFSA, including whether the application is in 
the "best interest of Malaysia", notably (i)  the effect of t he investment on the level and nature of 
economic activity in Malaysia, including the effect on productivity, efficiency, and quality of financial 
services; (ii)  the contribution towards enhancing international trade and investment linkages 
between Malaysi a and other countries; (iii)  the effect of the investment on the stability of the 
financial system, including on conduct and behaviours that could pose a risk to the financial system; 
or (iv)  the degree and significance of participation of Malaysians in th e financial sector.94 The 
 
93 The annual market reports of the LIBFC provide information about ongoin g activities. For 2021, 
viewed at: https://www.labuanibfc.com/clients/asset_52E835CC -1342-4701-B6FA-
E2CD03AD74B4/contentms/img/publications/annual -reports/LIBFC -Market -Report -2021.pdf .  
94 FSA, Schedule  5; and IFSA , Schedule  5.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  suitability of the bank's shareholders is assessed according to the same "best interest" criteria.95 
According to the Licensing Framework for Digital Banks, a policy document issued by BNM on 
31 December  2020, the "best interest" criteria for digital banking business and digital Islamic 
banking business include a commitment to drive financial inclusion, particularly in underserved or 
hard-to-reach segments of the market. The shareholders of a proposed digital bank may need to 
provide an enforceable undertaking to incorporate such commitments effectively, and similar 
commitments may be incorporated in the licensing conditions of the licensed digital bank.96 
Successful applicants for the digital bank licences, which will undergo a period of operational 
readiness of 12 to 24  months, were announced on 29  April 2022.  
4.98.  Malaysia's DFIs are specialized financial in stitutions established by the Government to develop 
and promote key sectors considered of strategic importance to the overall socio -economic 
development objectives. Targeted sectors include agriculture, infrastructure, the maritime industry, 
export -oriente d sectors, capital -intensive and high -technology industries, and SMEs. The 
Development Financial Institutions Act  2002 introduced a robust regulatory and supervisory 
framework to ensure that the DFIs are sound financially and operationally, and that they p erform 
their mandates prudently, efficiently, and effectively. Selected DFIs (six) have been prescribed and 
placed under the regulatory purview of BNM through the 2002  Act. Phase 1 of the institutional reform 
of DFIs, involving the acquisition of Danajamin  by Bank Pembangunan Malaysia Berhad, was 
completed in November  2021.  
4.99.  Perbadanan Insurans Deposit Malaysia (PIDM), established according to the Malaysia Deposit 
Insurance Corporation Act 2011, protects deposits held in bank accounts up to MYR  250,000 per 
client per bank in case of failure of a member of the PIDM. Protection for deposits is extended to 
individuals, joint owners, trustees, sole proprietorships, partnerships, professional practices, and 
companies. The limit applies separately to Islamic and co nventional deposits. Membership in the 
PIDM is compulsory for all banks licensed under the FSA and IFSA, including subsidiaries of foreign 
banks incorporated and operating in Malaysia. Non -members include investment banks, overseas 
branches of member banks , DFIs and cooperative banks, and all non -bank financial intermediaries. 
The mechanism is funded by the premiums PIDM collects from member banks. The premiums are 
differentiated according to each institution's risk profile thus awarding banks with the best  risk 
profiles with lower premiums. At the end of 2021, the Conventional Deposit Insurance Fund held 
MYR 2,613.9  million, while MYR  619.9  million had been accumulated in the Islamic Deposit 
Insurance Fund.97 
4.100.   Malaysia's banks are well capitalized as their r eported capital ratios exceed the statutory 
equity minimum (8%) by a wide margin (Table  4.18). These buffers were essential in ensuring 
financial stability and confidence as the MCOs to contain the spread of COVID -19 disrupted economic 
activity. Financial institutions stepped up their controls and governance processes to be able to 
identify and respond swiftly to operational disruptions from the MCOs. The banking sector 
implemented an automatic six -month moratorium on loan and financing repayments for SMEs and 
individual borrowers starting from 1  April 2020, to assist 8.3  million customers, including 
250,000  SMEs. Banks also supported larger corporations with rescheduling and restructuring of their 
financial commitments. Subsequently, various other financing  schemes introduced by the 
Government in the context of the economic stimulus packages (PRIHATIN, PENJANA, PERMAI, 
PEMERKASA, and PEMULIH) also assisted in sustaining the operations of small businesses and 
microenterprises.98 Thus, while Malaysian banks di d see a significant, but manageable, drop in their 
return on equity in 2020 as they were stepping up their loan loss provisions, the net impaired loans 
ratio did not deviate from past trends in 2020 and 2021, and banks' profitability improved in 2021 
(Table 4.18).  
 
95 FSA, Schedule  6; and IFSA , Schedule  6.  
96 BNM, Licensing Framework for Digital Banks . Viewed at: 
https://www.bnm.gov.my/documents/20124/938039/20201231_Licensing%20Framework%20for%20Digital%
20Banks.pdf .  
97 PIDM, Annual Report 2021  online information. Viewed at: 
https://www.pidm.gov.my/pidm2022/media/downloads/2022/AR21/EN -INTERACTIVE -PDF-PIDM -AR2021.pdf .  
98 Launched in October  2021, a Financial Management and Resilience Programme (URUS) assists less 
well-off bank customers (the lower 50th percentile) individually in  transiting from repayment assistance to more 
holistic financial and debt management support.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table 4.18 Financial sector indicators, 2016 -21 
 2016  2017  2018  2019  2020  2021 
H1 2021 
H2  
% (or otherwise stated)  
Banking system  
 Total capital ratioa 17.0 17.8 18.1 18.6 18.9 18.6 19.2 
 Tier 1 capital ratioa 14.6 15.0 14.6 15.1 15.7 15.4 16.0 
 Common equity Tier  1 capital ratioa 13.6 14.0 13.9 14.6 15.2 14.9 15.5 
 Return on assets  1.3 1.5 1.4 1.4 1.0 1.1 1.1 
 Return on equity  12.5 13.1 12.7 12.2 8.4 9.7 9.5 
 Liquidity coverage ratiob 124.3  134.9  143.2  149.1  148.2  149.1  153.4  
 Net impaired loans ratio  1.2 1.1 0.9 0.9 1.0 1.0 1.1 
Insurance and takaful sector  
 Capital adequacy ratio  244.6  232.5  243.9  226.9  219.7  221.1  222.2  
 Life insurance and family takaful  
  Excess income over outgo (MYR  billion)c 11.8 12.3 13.9 17.5 11.5 1.1 3.2 
  New business premiums/contributions 
  (MYR billion)  14.2 15.1 15.9 18.8 18.9 11.8 10.5 
  Capital adequacy ratio  245.5  227.7  234.8  206.2  203.5  207.9  212.0  
 General insurance and general takaful  
  Underwriting profit (MYR  billion)  1.8 1.3 1.5 1.1 1.7 1.3 0.7 
  Operating profit (MYR  billion)  3.4 2.7 2.9 2.9 3.4 1.8 1.3 
  Gross direct premiums/contributions 
  (MYR billion)  19.7 19.9 20.1 20.8 20.8 10.8 10.8 
  Claims ratio  56 59 58 59 55 52.7 56.5 
  Capital adequacy ratio  274.8  270.6  278.3  279.8  282.6  270.9  256.9  
a Since January  2013 capital components are reported based on the Basel  III Capital Adequacy 
Framework.  
b The Basel  III Liquidity Coverage Ratio Framework took effect on 1  June 2015 and superseded the 
guidelines on liquidity framework and Liquidity Framework -I issued on 1  July 1998.  
c Excess income over outgo excludes investment -linked unit funds to reflect the core performance of 
insurance and takaful operators' (ITOs) profitability more accurately and may thus not be directly 
comparable to the data reported in previous publications.  
Source:  BNM. 
4.101.   Assets held by Malaysian banks totalled just over MYR  3.1 trillion at the end of 2021. About 
MYR 2.3 trillion was held in deposit and investment accounts. The sector comprised 26 commercial 
banks, 16 full -fledged Islamic banks, and 12 conventional banks offering Islamic financial products 
through windows.99 Conventional banking is still larger than Islamic finance, but Islamic banks have 
continued to expand faster than conventional banks with particularly high annual growth rates for 
deposits and investment accounts and loans/financing (Table  4.19). The capi talization of Islamic 
banks is much at the same level as that of conventional banks, while the return on assets tends to 
be a little lower even with a lower net impaired financing ratio on average. This may, in part, be 
explained by lower trading and fee i ncome compared with conventional banks.  
Table 4.19 Islamic banking system, 2018 -21 
 
2018  2019  2020  2021   
MYR million (or otherwise stated)  
Total assetsa,b 948,519  1,020,371  1,089,541  1,192,862  
% of total assets of entire banking systema,b 32.2 33.5 34.2 35.5 
Total financinga,b 701,014  753,610  817,403  886,607  
% of total loans/financing of entire banking systema,b 37.7 39.2 41.0 42.5 
Total deposits and investment accountsa,c 771,114  826,167  889,951  968,909  
Total deposits  688,469  739,130  790,905  844,293  
Total investment accounts  82,645  87,037  99,046  124,616  
% of total deposits and investment accounts of entire 
banking systema,c 36.3 37.7 38.9 39.8 
 
99 BNM, Monthly Highlights & Statistics in August2022 . Viewed at: www.bnm.gov .my/-/monthly -
highlights -statistics -in-august -2022.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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2018  2019  2020  2021   
% 
Total capital ratiod 18.5 18.5 18.6 18.9 
Tier 1 capital ratiod 14.7 14.6 15.0 15.2 
Common equity Tier 1 capital ratiod 14.1 14.1 14.5 14.7 
Return on assets  1.1 1.2 0.7 1.1 
Net impaired financing ratio  0.8 1.0 0.9 0.7 
a Including DFIs under the Development Financial Institutions Act 2002.  
b Beginning 1  July 2015, includes assets/financing funded by investment accounts that are recognized 
on and off -balance sheet.  
c Beginning 1  July 2015, Islamic deposits and investment accounts are required to be designated 
separately . Investment account figures include those that are recognized on and off -balance sheet.  
d Beginning January  2013, capital components are reported based on Basel  III Capital Adequacy 
Framework.  
Source:  BNM. 
4.102.   The FSA and the IFSA represent a coherent framewo rk for financial sector regulation of 
conventional and Islamic banks. Both face similar regulations regarding risk management, corporate 
governance, prudential limits for related party transactions, liquidity management, and the 
classification and provisio ning of non -performing loans and financial contracts. The main differences 
include the requirement on Islamic banks to comply with a Shariah Governance Framework and 
ensure that their business conduct is consistent with the Shariah Standards for the produc ts they 
offer, e.g.  no principal or profit guarantees on investment accounts. Hence, Islamic banks need to 
comply with a tailored capital adequacy framework that is in line with both the Basel Committee on 
Banking Supervision's principles and the Islamic F inancial Services Board's standards. Whereas 
conventional banks are much restricted in their ownership of real estate, Islamic banks may, due to 
the nature of their business, be involved in investment or acquisition of property or land for 
development, onw ard sale, or lease. Box  4.1 presents an overview of the most common Islamic 
financial products and services.  
Box 4.1 Islamic banking and finance  
A financial system consistent with Shariah  (Islamic Law) generally implies the prohibition of collection and 
payment of interest (riba), gambling (maysir), excessive uncertainty (gharar fahisy), and investment in 
businesses considered haram (forbidden), e.g.  those involving alcohol and pork.  
 
Islamic banking allows gains on capital, consistent with four  basic principles:  
• materiality: a financial transaction must be linked directly or indirectly to a real economic transaction 
("material finality");  
• risk-sharing/risk bearing: the terms of financi al transactions reflect a symmetrical risk/return 
distribution for each participant to the transaction;  
• no exploitation of any party to the financial transaction; and  
• no financing of haram activities.  
Islamic financial instruments are structured using vari ous Shariah  contracts that specify the risks and 
responsibilities of contracting parties, which consist of fund providers and fund users. Islamic financial 
institutions that are licensed to offer Islamic financial products and services are required by laws  and 
regulations to establish Shariah  advisory committees/consultants to advise them and to ensure that their 
business affairs, operations, and activities comply with Shariah  law and principles.  
These are the principal Shariah -compliant financial instrumen ts at present:  
• Tawarruq  is a financing agreement where the customer receives cash for his needs at the end of a 
series of sale transactions, which usually involve commodities (e.g.  metals and palm oil, but not gold 
and silver). A tawarruq consists of two  sale and purchase contracts. The first involves the sale of an 
asset by a seller to a purchaser on a deferred basis. Subsequently, the purchaser of the first sale will 
sell the same asset to a third party on a cash and spot basis.  
• Muraba ḥah refers to the sa le and purchase of goods (e.g.  real estate, commodities, or a vehicle) 
where the acquisition cost and the mark -up are disclosed to the purchaser at the outset of the 
agreement.  
• Wakalah  is an agency contract where a party as principal authorizes another par ty as their agent 
(Wakil) to perform a particular task or carry out a business on their behalf with or without imposition 
of a fee.  
• Ijarah  refers to a lease contract that transfers the ownership of a usufruct of an asset to another 
person for a specified p eriod in exchange for a specified consideration. In addition, Ijarah may refer to 
a contract of hiring of services of a person for a specified period in exchange for a specified WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  consideration. For example, the bank makes available to the customer the use o r service of 
assets/equipment such as plant, office automation, or motor vehicles for a specified period and rental.  
• In Musharakah  (joint venture), two or more parties contribute capital to a business and all parties 
will share the profit and bear the loss  proportionally to their capital contribution. This is often used in 
investment projects, letters of credit, and purchase of real estate or property. For real estate or 
property, the bank assesses an imputed  rent and will share it as agreed in advance. All  providers of 
capital are entitled to participate in its management, but they are not necessarily required to do so. 
Profits are distributed among the partners in pre -agreed ratios, while losses are borne in strict 
proportion to the capital contributions o f each partner. This concept is distinct from fixed -income 
investing (i.e.  the issuance of loans). Often used in investment projects, some Islamic financial 
institutions may also use Musharakah contracts to finance the purchase of real estate and propertie s. 
• Qard  refers to a contract of lending money by a lender to a borrower where the latter is bound to 
repay an equivalent replacement amount to the lender. The inherent nature of a qard contract is the 
obligation of the borrower to repay the money borrowed in full.  
• Istisna  generally refers to a manufacturing contract between a seller and purchaser whereby the 
purchaser will make a series of progressive payments to the seller to facilitate manufacturing, 
processing, or construction. A seller sells to a purcha ser an asset which is yet to be constructed, built 
or manufactured according to agreed specifications and delivered on an agreed specified future date 
at an agreed pre -determined price. The unique value proposition of the Istisna contract is that it enable s 
the purchaser to buy goods that are yet to be constructed (e.g.  a building) and the purchase price paid 
progressively to the seller enables the construction company to pay for the raw materials to complete 
the construction of the building.  
• In Mudarabah  (profit sharing), it involves two  parties, whereby one party to the contract provides 
100% of the capital (rabb -ul-mal) and the other party as the entrepreneur/worker (mudarib) manages 
and mobilizes the capital to generate profit. Profits are shared accordi ng to a pre -agreed ratio. Should 
a loss occur, the first partner will lose their capital, and the other will lose the time and effort dedicated 
to the project.  
• Sukuk  (Islamic bonds). Unlike conventional bonds, the structure of sukuk removes interest -based 
elements by replacing them with an underlying Shariah  contract that is asset -based using most typically 
ijarah, murabahah, or wakalah contracts.  
4.103.   The Shariah Advisory Council (SAC) of BNM was established in 1997 to be the highest 
Shariah authority for Islamic financial business (licensed under IFSA) in Malaysia. Each licensed 
Islamic financial institution is obliged to have an in -house Shariah advis ory council, whose member 
appointments are subject to regulatory approval. The SAC ensures the ascertainment of Islamic law 
on financial matters, issues rulings for reference, and advises BNM on any Shariah issues relating to 
Islamic financial business, ac tivities, or transactions.100 It is an offence for an Islamic financial 
institution to be involved in business that is not compliant with Shariah principles, and supervisory 
and enforcement actions may apply in case of breaches.  
4.104.   Malaysians are increasingly moving towards electronic payment transactions. In all, 
7.2 billion e -payment transactions were effected in 2021, up from 5.5  billion in 2020, i.e.  a rise from 
about 170 transactions per capita to 221 electronic transactions per capita. Consumers are also 
shifting to contactless and online payment methods, and the use of cheques is in decline.  
4.105.   As of 1  July 2021, BNM assumed operations of Malaysia's large value payment system – the 
Real-time Electronic Transfer of Funds and Securities System (RENTAS) – from its part -owned 
Payments Network Malaysia Sdn Bhd (PayNet). Internally, BNM has made adjustments to ensure 
that its operating responsibilities for RENTAS remain completely separated from its oversight 
functions as the regulator and supervisor of the entire payment services industry. The stated purpose 
of the transfer from PayNet was to strengthen the end -to-end risk management of RENTAS.101 Key 
risk areas in the current environment include cyber resilience, consumer data protection, critical 
service provider functions, money laundering and terrorism financing, and payment fraud. Migration 
to the ISO  20022 standard (from ISO  15022) for RENTAS, which BNM is undertaking in collaboration 
with other financial institutions in Malaysia, is taking place in stages from  June 2022 to June  2024. 
Adoption of the new standard is expected to enhance payment efficiency, strengthen risk 
management, and facilitate the offering of value -added services to customers. Qualified non -banks 
may be granted access to RENTAS.  
 
100 For example, in the context of the COVID -19 pandemic, the SAC issued a resolution to clarify and 
provide guidance on how to recognize profit, and a prohibition on the compounding of profits for facilit ies under 
repayment assistance to ensure consistency among Islamic banks.  
101 BNM, Annual Report 2021 , p. 59. WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.4.2.3   Insurance an d takaful  
4.106.   Like banks, insurance companies and takaful operators are governed by the FSA and the 
IFSA. Foreign insurance companies must be incorporated in Malaysia, and all business operations of 
local and foreign institutions require a licence issued by the Ministry of Finance upon 
recommendation from BNM. The issuance of licences to new insurance and ta kaful business is 
governed by the same prudential and "best interest of Malaysia" criteria as those applicable to banks. 
As required under the FSA and IFSA, all composite insurance companies and takaful operators had 
in 2018 completed the process of conver ting their composite licences into sperate/single licences. 
The conversion process, which began in 2013, aimed to strengthen the management of general and 
life/family insurance and takaful business. Takaful operators shall at all times ensure that their ai ms 
and operations, and business affairs and activities are in compliance with Shariah  principles . Their 
Board of Directors must give priority to takaful participants should there be conflicts of interest 
between them and the shareholders.  
4.107.   Foreign professio nal reinsurers, international takaful operators, and retakaful operators may 
conduct business in Malaysia through a branch office. However, licensed general insurers and takaful 
operators should first seek reinsurance/retakaful from licensed insurers/reins urers/takaful 
operators/retakaful operators, or insurers/reinsurers/takaful operators/retakaful operators based in 
the LBIFC, before obtaining foreign reinsurance/retakaful support. Furthermore, licensed general 
insurers are required to cede (reinsure) 2.5 % for all classes of business (with no cession limits) and 
15% for Auto Treaties and Auto Facultative (with 20% retrocession) to Malaysian Reinsurance 
Berhad.  
4.108.   Following implementation of the phased liberalization of motor and fire tariffs that 
commenced on  1 July 2016, BNM communicated the next phase of liberalization in June  2022. 
Greater pricing flexibilities for motor and fire products will be accorded to insurance and takaful 
operators (ITOs) that meet BNM's expectations and reforms to the motor claims ecosystem. The 
ongoing phased liberalization of motor and fire tariffs is expected to improve the ability of general 
ITOs to respond to changes in underlying risks while ensuring that adjustments will not be sharp 
and disorderly.  
4.109.   In 2020, the sector consis ted of 14 life insurers, 22 general insurers, 7 professional 
reinsurers, 26 insurance brokers, 51 loss adjusters, and 37 financial advisers. There were 
15 registered takaful operators.102 The life insurance and family takaful penetration ratio was 41% 
in 2018.103 
4.110.   Taken together, Malaysian insurance companies and takaful operators held assets of around 
MYR 363 billion at the end of 2021. Like Islamic banks, takaful operators are growing at a faster 
rate than conventional insurers, although from a much smaller base than in the banking segment 
(Table  4.20). Life insurance and family takaful dominate relative to other types of insurance 
contracts. At the end of 2021, the average capital adequacy ratios for life insurance/general takaful 
(212%) and general insuranc e/general takaful businesses (256.9%) were well above the regulatory 
minimum of 130% (Table  4.18). 
Table 4.20 Takaful sector, 2018 -21 
 
2018  2019  2020  2021   
MYR million (or otherwise stated)  
Takaful fund assets  31,323.1  36,517.6  41,871.2  45,803.0  
Family  27,594.8  32,283.8  37,025.5  40,258.9  
General  3,728.3  4,233.9  4,845.7  5,544.1  
% of insurance and takaful industry  10.5 11.2 11.9 12.6 
Net contributions income  9,560.9  11,330.7  11,628.3  13,803.7  
Family  7,315.4  8,607.0  8,864.0  10,869.4  
General  2,245.5  2,723.7  2,764.3  2,934.2  
% of insurance and takaful industry  16.6 18.3 18.4 20.6 
Family takaful      
New business contributions  4,913.3  6,157.9  6,593.7  8,499.6  
 
102 BNM, Monthly Highlights & Statistics in August2022 . Viewed at: https://www.bnm.gov.my/ -
/monthly -highlights -statistics -in-august -2022, Tables  4.10 (insurance) and 4.11 (takaful).  
103 The ratio measures the percentage of Malaysians who own at least one (individual or group) life 
insurance policy or family takaful certificate.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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2018  2019  2020  2021  
General takaful      
Gross direct contributions  1,789.0  3,308.5  3,458.3  3,828.1  
Claims ratio (%)  55.9 58.1 55.7 51.3 
Source:  BNM.  
4.111.   The Takaful and Insurance Benefits Protection System (TIPS), effective since the end 
of 2010, protects owners of takaful certificates and insurance policies from the loss of eligible 
benefits in case of failure of an insurer member of PIDM, i.e.  all takafu l operators and insurance 
companies licensed under the IFSA and the FSA. Benefits are generally guaranteed to the maximum 
level of MYR  500,000, except for healthcare benefits, which are protected in full. The PIDM collects 
an annual levy for the TIPS from each member under the Differential Levy System Framework for 
insurers and the Differential Levy System for Takaful operators. At the end of 2021, 
MYR 1,357.4  million was held in the General Insurance Protection Fund, MYR  517.2  million in the 
Life Insurance  Protection Fund, MYR  33.4 million in the General Takaful Protection Fund, and 
MYR 79.7 million in the Family Takaful Protection Fund.104 
4.4.2.4   Securities  
4.112.   Malaysia's capital markets are governed by the Capital Markets and Services 
Act (CMSA)  2007, the Securities Commission Malaysia Act  1993, the Securities Industry 
(Central  Depositories) Act  1991, and their amendments.105 Securities Commission Malaysia is the 
regulator of the securities and derivatives markets, tasked under the CMSA to regulate all matters 
relating  to capital markets. Other functions of the Commission include (i)  advising the Minister of 
Finance on all aspects relating to capital markets; (ii)  ensuring adequate protection of investors to 
maintain their confidence in the Malaysian capital markets; (i ii) encourag ing and promot ing the 
development of the Malaysian capital markets; (iv)  promot ing and regulat ing corporate governance 
and approved accounting standards of listed corporations; (v)  monitor ing, mitigat ing, and manag ing 
systemic risks arising fro m the capital markets; and (vi)  register ing all auditors of public interest 
entities or schedule funds.  
4.113.   Securities Commission Malaysia  is a member of the International Organization of Securities 
Commissions (IOSCO) with the aim of ensuring that internation al standards and best practices are 
implemented in Malaysia. The Commission is a signatory to the IOSCO Multilateral Memorandum of 
Understanding Concerning Consultation and Cooperation and the Exchange of information 
(Appendix  A signatory), as well as a si gnatory to IOSCO's Multilateral Memorandum of 
Understanding for Supervisory Cooperation. As regulators, the Commission and the BNM 
complement the legislative framework with rules and guidelines, guidance notes and guiding 
principles, technical notes, pract ice notes, and circulars to ensure the effective functioning of 
Malaysia's capital markets.  
4.114.   The CMSA introduced a single licensing regime for capital market intermediaries. This new 
licensing framework is premised on the concept of a single licence where a  capital market 
intermediary will only need one licence to carry on any one or more regulated activity, i.e.  securities 
dealing, dealing in derivatives, clearing of securities or derivatives, fund management, dealing in 
private retirement schemes, advising  on corporate finance, investment advice, and financial 
planning. On behalf of Securities Commission Malaysia, the Audit Oversight Board is responsible for 
the registration, inspection, monitoring, and enforcement of auditing regulations and standards 
applicable to audit firms and individual auditors of public interest entities or schedule funds, as well 
as the recognition of the foreign auditors of financial statements of foreign corporations listed on the 
Bursa Malaysia.  
4.115.   Malaysia's Islamic capital market functions in parallel with the conventional capital market, 
complementing and deepening the scope of the Islamic banking system. A two -tier Shariah 
Governance Framework includes a national Shariah Advisory Council (established under the 
Securities Commissi on Malaysia Act  1993) empowered to ascertain the application of Shariah 
principles and issue Shariah rulings on Islamic capital market business and transactions. A dedicated 
Islamic Capital Market Development Business Group within Securities Commission Mal aysia provides 
 
104 PIDM, Annual Report 2021 . Viewed at: 
www.pidm.gov.my/pidm2022/media/downloads/2022/AR21/EN -INTERACTIVE -PDF-PIDM -AR2021.pdf .  
105 The CMSA repealed the Securities Industry Act  1983 and the Futures Industry Act  1993.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  infrastructure support for the application of Shariah principles in the Islamic capital market. This 
ensures that the market is free from prohibited activities such as riba (usury), maisir (gambling), 
and gharar (ambiguity).  
4.116.   Malaysia has one  of the most developed capital markets in the region, a market 
encompassing equities, debt instruments, and derivatives. Overall, the size of the market was 
approximately MYR  3.5 trillion at the end of September  2022, and the more than 900 companies 
listed  on the Bursa Malaysia had a combined market capitalization of MYR  1.6 trillion. Among the 
13 sectors for which indices are calculated, companies in the financial sector make up around 25% 
of the market value, followed by consumer products and services (16 %), and industrial products 
and services (13%).106 Like other equity markets around the world, the market capitalization of the 
30 largest companies on the Bursa Malaysia, which is the basis for the Kuala  Lumpur Composite 
Index (KLCI), fell sharply in March  2020 under the threat of COVID -19, but recovered fully during 
the following five months (Chart  4.5). However, the KLCI has yet to return to the levels of 
early 2018.  
Chart 4.5 FTSE Bursa Malaysia market capitalization and KLCI, 
January  2018 -September  2022  
(MYR billion)  
 
Note:  Market capitalization data reflect the situation at 31  December, except 2022 data (August).  
Source:  Bursa Malaysia, Bursa Malaysia's Key Indicators ; World Bank, World Development Indicators . Viewed 
at: https://databank.worldbank.org/source/world -development -indicators ; and YahooFinance. 
Viewed at: https://finance.yahoo.com/ . 
4.117.   Malaysia is one of the world's largest sukuk issuers. As a steady stream of new issues outstrip 
redemptions, the outstanding volume of bonds and sukuk is growing rapidly, surpassing 
MYR 1.8 trillion in June  2022. Corporate sukuk dominate relative to corporate bonds with an 
outstanding volume of MYR  640 billion (against MYR  141 billion for corporate bonds) at the end of 
July 2022.107 A Sustainable and Responsible Investment Sukuk Framework was intro duced in 
August  2014 (revised in November  2019) to facilitate financing of sustainable and responsible 
investment (SRI) projects. In June  2022, an SRI -linked sukuk framework was introduced to facilitate 
fundraising by companies in addressing sustainability  concerns such as climate change or social 
agenda, with features that relate to the issuer's sustainability performance commitment.  
 
106 Bursa Malaysia Sectorial Index Series, data as at 30  August  2022.  
107 Securities Commission Malaysia, Bond & Sukuk Statistics . Viewed at: 
https://www.sc.com.my/api/documentms/download.ashx? id=7f840f2c -df53-4f4d-9327-46a359b7e426 .  
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02/09/2022Market capitalization (left-scale)  KLCIChart 4.5 FTSE Bursa Malaysia market capitalization and KLCI
(MYR billion) (Points)
Bursa Malaysia, Bursa Malaysia's Key Indicators; World Bank, World Development Indicators. Viewed at: 
https://databank.worldbank.org/source/world -development -indicators; and YahooFinance. Viewed at:https://finance.yahoo.com/. Source:Note: Market capitalization data reflects the situation at 31 December, except 2022 data (Augsut).  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.118.   Malaysia's well -developed fund management industry comprised 100 licensed companies, 
including 23 full -fledged Islamic fund managers and 31 managers that operate Islamic windows as 
at December  2020. Islamic assets under management were valued at MYR  216.8  billion. Fund 
management is a regulated activity as defined under CMSA  2007. Thus, any person carrying out 
fund management i s required to be licensed and supervised under Securities Commission Malaysia's 
regulatory purview. Companies licensed for fund management are required to be incorporated in 
Malaysia as well as adhere to the Commission's licensing framework. There is no re striction for a 
licensed fund management company to be wholly owned by foreigners, or to offer its services to 
foreign -based clients (subject to relevant rules by other regulators such as BNM or the foreign client's 
jurisdiction).  
4.119.   Under the Twelfth  Plan, t he Government will continue to fulfil its commitments to reduce 
carbon emission intensity per GDP by up to 45% in 2030, in line with the aspiration to become a net 
zero carbon emission nation by 2050. To support this aspiration, the Ministry of Environment  and 
Water will implement economic instruments and programmes that have the potential to attract 
low-carbon investment into Malaysia and increase the competitiveness of Malaysian products at the 
international level.  
4.4.3   Telecommunications  
4.120.   The telecommunication s sector contributed about 5% to GDP at 2015 constant prices 
in 2021.108 It employed approximately 35,600  persons in 2020.109 The sector grew faster than 
services overall during the review period (8.4% versus 2.3% average annual growth rates).110 On 
the trade  side, Malaysia was a net importer of telecommunications services; in 2021, the trade deficit 
amounted to USD  624.4  million (Table  4.21). Imports and exports of telecommunications services 
have been growing more rapidly than services trade in general; the share of telecommunications 
exports rose from 1.5% in 2017 to 4.3% of total services trade in 2021, and from 2.6% in 2017 
to 4.3% in 2021 for telecommunication services imports.  
Table 4.21 Selected telecommuni cations indicators, 2017 -21 
 
2017  2018  2019  2020  2021  
Telecommunications services  
 Trade deficit (USD  million)  -528.5  -329.6  -437.2  -496.9  -624.4  
 Exports (% of service exports, BoP)  1.5 1.7 1.7 3.9 4.3 
 Imports (% of service imports, BoP)  2.6 2.3 2.6 4.0 4.3 
Fixed telecoms revenue (USD  million)  2,432.0  2,751.0  2,599.0  2,499.0  2,520.0  
Mobile networks revenue (USD  million)  5,071.7  5,372.8  5,125.3  4,832.9  .. 
Fixed telephone subscriptions ('000)  6,580.8  7,429.0  7,405.1  7,467.9  8,247.1  
 Per 100 people  20.6 22.9 22.6 22.5 24.6 
Fixed broadband subscriptions ('000)  2,687.8  2,696.0  2,964.5  3,358.8  3,734.1  
 Per 100 people  8.4 8.3 9.0 10.1 11.1 
Mobile cellular subscriptions ('000)  42,338.5  42,413.4  44,600.7  43,723.6  47,201.7  
 Per 100 people  132.4  130.9  136.0  131.7  140.6  
Secure Internet servers ('000)  153.0  180.1  214.8  242.6  .. 
 Per 1 million people  4,917.8  5,713.1  6,723.9  7,494.4  .. 
Percentage of the population covered by a 
mobile cellular network  95.8 94.8 96.7 96.7 98.5 
Fibre-to-the-home/building Internet 
subscriptions ( ',000)  1,429.0  1,736.0  2,039.4  2,507.6  .. 
Internet users (%)  80.1 81.2 84.2 89.6 96.8 
.. Not available.  
Source:  ITU, World Telecommunication/ICT Indicators Database  2022; EIU (2022), Industry Report 
Telecommunications Malaysia, 1st Quarter ; World Bank, World Development Indicators . Viewed  at: 
https://databank.worldbank.org/source/world -development -indicators ; and WTO, WTO  Stats. 
Viewed at: https://stats.wto.org/ . 
4.121.   Malaysia has a mature telecommunications sector, with a high penetration rate for mobile 
phones, and more than 95% 4G coverage in the first quarter of 2022. The number  of subscribers to 
 
108 Department of Statistics Malaysia (2022), Annual Gross Domestic Production, 2015 -2021, May.  
109 The figure refers to full -time equivalent telecommunication employees, based on ITU, 
Telecommunication/ICT Indicators Database  2021.  
110 Calculations based on GDP at constant 2015 prices from the Department of Statistics Malaysia.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  fixed line, fixed broadband, and mobile cellular services continues to grow (Table  4.21). For instance, 
Malaysia's mobile cellular penetration rate was 140.6  per 100 people in 2021 up from 132.4 per 
100 people in 2017. In addition, the number of Internet subscriptions using fibre to the premises 
(home/building) reached 2.5  million in 202 0, up from 1.4  million in 2017. Furthermore, a trend 
towards secure Internet servers and Internet users was also observed (Table  4.21). The overall 
upward trend is likely attributable to improved connectivity through several infrastructure projects 
impleme nted by the Government in line with Malaysia's national development plans (see below).  
4.122.   Telekom Malaysia (a publicly listed company) remains the major provider of fixed -line and 
broadband services with a market share around 95%. TIME dotCom Bhd (a publicly listed company) 
provides wholesale bandwidth and operates the Cross Peninsular Cable System. In the mobile 
market, there are four  main operators: Celcom, Digi, Maxis, and U  Mobile. As at 30  September  2022, 
Digi was 49% owned by Telenor Asia Pte Ltd.111 The merger application for Celcom and Digi was 
submitted to the Malaysian Communications and Multimedia Commission (MCMC) in July  2021. 
MCMC provided a notice of no objection on the merger on 28  June 2022, subject to the undertaking 
provided by Celcom and Digi .112 The authorities note that once the merger is concluded, it is 
anticipated that Celcom and Digi will have significant market share in the mobile market.  
4.123.   The main legislation governing the sector remains the Communications and Multimedia Act 
(CMA) No.  588 of 1998 and the Malaysian Communications and Multimedia Commission Act 
(MCMCA) No.  589 of 1998. Since the last Review, there have been no changes to the legislation. 
According to the authorities, the CMA  1998 and the MCMCA  1998 are currently under review ; the 
proposed amendments in general are intended to strengthen the function, power, and governance 
of the Commission, in tandem with the evolution and growth of the communications and multimedia 
industry. The Ministry of Communications and Multimedia Mala ysia (MCMM) is responsible for 
developing policies for the sector. The sector is regulated by the MCMC whose responsibilities 
include, inter alia, advising the Minister on all matters related to telecommunication activities, 
implementing/enforcing the regu lations related to telecommunications, and making 
recommendations on granting and cancellation of licences.113 The MCMM is the regulator for postal 
and courier services under the Postal Services Act No.  741 of  2012 and digital signatures under the 
Digital S ignature Act No.  562 of 1997.  
4.124.   National development plans, such as the Shared Prosperity Vision  2030 (SPV  2030),  the 
Malaysia Digital Economy Blueprint  and the  Twelfth  Plan outline developmental agenda towards a 
digitally driven and high -income country by becoming a regional leader in digital economy by 
2030.114 In addition, t he Twelfth Plan highlights four strategies directed at the advancing digital 
economy: (i ) providing an enabling environment with a focus on digital governance, trade through 
e-commerce, wealth distribution, and cybersecurity; (ii)  strengthening the provision of digital 
infrastructure and services; (iii)  developing future -ready digital talent and enhancing digital skills 
through education and training programmes; and (iv)  positioning Malaysia as the ASEAN Digital 
Centre by  facilitating strategic and quality investment and digitalizing micro, small, and 
medium -sized enterprises (MSMEs) to broade n market access.115 
4.125.   The Universal Service Provision (USP) is a fundamental policy principle under the CMA  1998 
and the Communications and Multimedia (Universal Service Provision) Regulations  2002. Its 
objective is to provide collective and individual access  to basic telephony and Internet access in 
underserved areas or for underserved groups within the community. The USP programme provides 
several infrastructure projects (e.g.  expansion of mobile and fixed broadband coverage, the fibre 
optic network, and the  submarine cable system) funded by the USP fund. Under Regulation  27 of 
the Communications and Multimedia (Universal Service Provision) Regulations 2002116, all licensees 
except for Content Applications Service Provider (CASP) licence holders, with total ne t revenue for 
 
111 Information provided by the authorities.  
112 Diji (2022), "Celcom -Digi Merger Receives MCMC Clearance", 22  June. Viewed at: 
https://corporate.digi.com.my/media/celcom -digi-merger -receives -mcmc -clearance .  
113 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
114 Ministry of Economic Affairs (2019), Shared Prospe rity Vision 2030 Restructuring the Priorities of 
Malaysia's Development , 5 October.  
115 Economic Planning Unit, Twelfth  Malaysia Plan, 2021 -2025, pp. 11-13–11-19. 
116 Communications and Multimedia (Universal Service Provision) Regulations  2002 (P.U.(A)  419/20 02). 
Viewed at: https://www.mcmc.gov.my/en/legal/acts/communications -and-multimedia -act-1998-reprint -
200/communications -and-multimedia -universal -service -p.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  the previous calendar year derived from the designated services that meet the minimum revenue 
threshold of MYR  2 million, shall contribute 6% of its weighted net revenue annually to the USP fund.  
4.126.   In August  2020 the Government launched the Jal inan Digital Negara (JENDELA), funded by 
the USP fund117, in line with the Twelfth  Plan. The estimated cost for the JENDELA phase  1 is 
MYR 28 billion.118 The JENDELA is a five -year digital infrastructure plan (2021 -25) to strengthen the 
level of connectivity , quality of communication services, and coverage, especially in rural and 
underserved areas. The plan aims at 100% 4G coverage, increased mobile broadband speed from 
25 Mbps to 100  Mbps, and gigabit speed access to fixed broadband for nine  million premise s by the 
end of 2025.119 As per the 3G sunset (gradual retirement), 99.3% of the 3G carriers were shut down 
as of the end of June  2022 and the remaining 3G carriers are scheduled to shut down in 
December  2022.120 
4.127.   The Government introduced the Malaysia Digital Economy Blueprint initiative in 
February  2021 to support national development plans such as the SPV  2030 and the Twelfth  Plan 
and streamline key policies to facilitate the development of the digital economy in  Malaysia. The EPU 
provides leadership and policy direction. Malaysia Digital Economy Blueprint sets out the 
consolidated initiatives and targeted outcomes related to the rakyat , business, and the Government 
through the Malaysia Digital Economy Blueprint121 and the National  4IR Policy (N4IRP)122 
(Table  4.22). The JENDELA initiative, as noted earlier, is adopted in the Malaysia Digital Economy 
Blueprint.123 
Table 4.22 Goals of the Malaysia Digital Economy Blueprint  
Rakyat ( people)  Business (private sector)  Government (public sector)  
• Creation of 500,000 new jobs  
• 100% of households to have 
Internet access  
• All students to have access to 
online learning  • 30% uplift productivity across all 
sectors by 2030  
• 22.6% share of digital economy 
to GDP 
• 875,000 MSMEs adopt 
e-commerce  
• Attract 2  unicornsa (home -grown 
or foreign)  
• MYR 70 billion investment in 
digitalization  
• Increase the number of start -ups 
to 5,000  • 100% of civil servants to possess 
digital literacy  
• 80% end -to-end online 
government services  
• All ministries and agencies to 
provide cashless payment option 
in 2022 
• 80% usage of cloud storage across 
the Government in 2022  
a A unicorn is a start -up company with a value of over USD  1 billion.  
Source:  Economic Planning Unit, Malaysia Digital Economy Blueprint , p. 11. Viewed at: 
https://www.epu.gov.my/sites/default/files/2021 -02/malaysia -digital -economy -blueprint.pdf . 
4.128.   In line with the goals of Malaysia Digital Economy Blueprint, the Government established the 
Digital Nasional Berhad (DNB) in June  2021. The DNB is responsible fo r the development of 
5G infrastructure nationwide and the management of Malaysia's 5G  spectrum.124 According to the 
authorities, as at September  2022, the DNB integrated 2,428 5G sites in several states, namely 
W.P. Putrajaya, W.P.  Kuala  Lumpur, Selangor, P erak, Penang, Malacca, Negeri Sembilan, Johor, 
Sabah, and Sarawak, which cover 33.2% of the populated areas. The DNB aims to achieve 36% 
coverage in populated areas by the end of 2022 and 80% coverage in populated areas by the end 
of 2024.  
 
117 MCMC (2021), Universal Service Provision Annual Report 2020 , 30 July. Viewed at: 
https://www.mcmc.gov.my/s kmmgovmy/media/General/pdf/MCMC -USP-AR2020_Eng.pdf . 
118 Information provided by the authorities.  
119 JENDELA, 1st Quarterly Report of JENDELA  2022. Viewed at: https://myjendela.my/en -GB/.  
120 JENDELA, 1st Quarterly Report of JENDELA  2022.  
121 Economic Planning Unit, Malaysia Digital Economy Blueprint . Viewed at: 
https://www.epu.gov.my/sites/default/file s/2021 -02/Malaysia -digital -economy -blueprint.pdf . In order to 
achieve the goals, 6  strategic thrusts, 22  strategies, 48  national initiatives, and 28  sectoral initiatives are 
identified in the Malaysia Digital Economy Blueprint.  
122 Economic Planning Unit, National Fourth Industrial Revolution (4IR) Policy . Viewed at: 
https://www.epu.gov.my/sites/default/files/2021 -07/National -4IR-Policy.pdf .  
123 JENDELA, 1st Quarterly Re port of JENDELA  2022.  
124 DNB, 5G for All: Accelerating a Digital Future for Malaysia . Viewed at: https://www.digital -
nasional.com.my/about -us.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.129.   Telecommunicatio ns companies must obtain a licence to provide telecommunications 
services in Malaysia. The CMA  1998 sets out four types of licences: (i)  Network Facility 
Provider  (NFP); (ii)  Network Service Provider (NSP); (iii)  Applications Service Provider (ASP); and 
(iv) CASP . In addition, two  types of licences , except for ASPs, are granted within each licensable 
activity, namely "individual licences" for certain activities where there is a need for regulatory 
control, and "class licences" with a lighter degree of regul ation (Table  4.23). Overall, there was no 
significant change in the number of licences issued during the review period  (Table  4.24) . Under the 
category of "class licences", there had been a steady increase in the number of ASP licences; this 
led to an upwa rd trend in the number of Internet users.  There is now a new category of service, 
namely cloud services, which is an activity licensed under the ASP category of licences with effect 
from 1  April 2022 (Table  4.23). 
Table 4.23 Telecommunications licensing regimes, 2022  
Licensing category  Individual licence  Class licence  
Network Facility 
Provider:  for 
owners/providers of 
network facilities 
infrastructure such as 
cables, towers, and 
satellite  Earth stations; fixed links and cables; radio 
communications transmitters and links; 
satellite hubs; satellite control stations; 
space stations; submarine cabl e landing 
centres; and towers, poles , ducts, and pits 
used in conjunction with other network 
facilities; or such other network facilities 
which are not exempt under the CMA or 
not subject to a class licence under Part  IV 
of the Licensing Regulations  2000a Niche or limited purpose network 
facilities  
Network Service 
Provider:  providers of 
the basic connectivity 
and bandwidth, enabling 
connectivity between 
different networks  Bandwidth services; broadcasting 
distribution services; cellular mobile 
services; acc ess applications services; 
space services; switching services; and 
gateway services; or such other network 
services which are not exempt under the 
CMA or not subject to a class licence under 
Part IV of the Licensing Regulations  2000a Niche customer access;  or niche 
connection services  
Application Service 
Provider:  provision of 
services to end  users, 
such as voice services, 
data services, and 
Internet access  n.a. PSTN telephony; public cellular services; 
IP telephony; public payphone services; 
public switch ed data services; audiotext 
hosting services provided on an opt -in 
basis; directory services; Internet access 
services; messaging services; or cloud 
service  
Content Applications 
Service Provider:  
subset of ASP such as 
television and radio 
broadcast services, and 
services such as the 
provisioning of 
information services  Satellite broadcasting; subscription 
broadcasting; terrestrial free to air TV; 
terrestrial radio broadcasting; or such other 
content applications services which are not 
exemp t under the CMA or not subject to a 
class licence under Part  IV of the Licensing 
Regulations 2000a Content applications service limited in its 
availability to vehicles, vessels, railway 
or aircraft used for hire or reward or for 
any other valuable consider ation; a 
single commercial or residential building; 
or a restricted geographical area  
 
Content applications service of limited 
appeal or which is targeted to a special 
interest group and available through 
subscription by persons using equipment 
specificall y designed for receiving the 
said service; content applications service 
where the content is remotely generated 
and distributed through a network 
service and displayed on a screen; 
content applications service for distance 
learning purpose; or content appl ications 
service linked or associated specifically 
to a sporting, cultural or other one -off 
event  
n.a. Not applicable.  
a Communications and Multimedia (Licensing) Regulations  2000 (P.U.(A)  129/2000).  
Source:  MCMC (2022), Licensing Guidebook , 1 June. Viewed at: 
https://www.mcmc.gov.my/skmmgovmy/media/General/pdf2/Suruhanjaya -Komunikasi -dan-
Multimedia -Malaysia_Licensing -Guidelines_Jun2022.pdf . WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 114 - 
 
  Table 4.24 Telecommunications licences issued, 2017 -21 
(Number)  
  2017  2018  2019  2020  2021  
Individual licences  437 459 441 438 454 
NFP 209 220 213 220 239 
NSP 176 183 176 170 173 
CASP  52 56 52 48 42 
Class licences  463 444 452 499 497 
NFP 9 10 11 17 11 
NSP 11 10 11 17 11 
CASP  10 11 10 15 9 
ASP 433 413 420 450 466 
Source:  Information provided by the authorities.  
4.130.   Foreign individuals and companies may not apply for individual or class licences under the 
current licensing regime.125 They must be locally incorporated in Malaysia. There are no foreign 
equity restrictions on class licences, whereas applications for individual licences are assessed on a 
case-by-case basis. The Minister may decide to grant a licence based on the MCMC's 
recommendations under the CMA.126 According to the authorities, assessing a n application for 
non-foreign equity restriction for a network facility or network service provider licence, the MCMC 
would take into account factors, inter alia: investments made in Malaysia by the applicant and their 
economic impact; employment of Malays ians (number employed and key positions held) and job 
opportunities; transfer of technology and skills; the unique or exclusive nature of the business; and 
contributions to the socio -economic development of Malaysia. The authorities underline that these 
factors are not exhaustive, and applications received will be evaluated on a case -by-case basis.  
4.131.   A limit of 70% foreign equity participation is permitted in network facility and network service 
provider licences.127 However, according to the authorities, in g eneral, individual licences issued 
under the  CMA 1998 contain special licence condition on the shareholding requirement where there 
is a requirement of a minimum 30% Bumiputera shareholding by a licensee that it must comply with 
and foreign shareholding is  capped at 49% for a network facility or network service provider licensee. 
Equity restrictions do not apply if the licence holder is a publicly listed company, but they do apply 
when the licensee is a private limited company (Sendrian Berhad) held by a pu blic limited company 
(Berhad).128 Also, the authorities note that operators with Malaysia Digital Status may request for 
100% foreign equity when applying for Network Facility Provider Individual (NFP(I)) License and 
Network Service Provider Individual (NSP (I)) License.129 
4.132.   As noted in the last Review, under the CMA, all network service and facilities service 
providers have access to the facilities and services on reasonable terms and conditions and on an 
equitable and non -discriminatory basis.130 Service providers seeking access are required to make a 
written request to the access provider. According to the authorities, MCMC is currently carrying out 
a public inquiry on the review of the Mandatory Standard on Access; thus the Variation to the 
Comm ission Determination on the Mandatory Standard on Access Pricing (Determination No.  1 
of 2017), Determination No.  1 of 2020 is still applicable.  
4.133.   MCMC does not regulate retail rates with respect to retail prices for fixed line services, mobile 
phones, and f ixed broadband. It depends on market forces. However, service providers are required 
to adhere to the principles on rate setting under Section  199 of the CMA.131 
 
125 MCMC (2022), Licensing Guidebook , 1 June. Viewed at: 
https://www.mcmc.gov.my/skmmgovmy/media/General/pdf2/Suruhanjaya -Komunikasi -dan-Multimedia -
Malaysia_Licensing -Guidelines_Jun2022.pdf .  
126 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
127 MITI, Autonomous Liberalisation . Viewed at: https://www.miti.gov.my /index.php/pages/view/4236 .  
128 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
129 Malaysia Digital Economy Corporation (MDEC), Malaysia Digital Status . Viewed at: 
https://mdec.my/malaysiadigital/apply/ .  
130 WTO document WT/TPR/S/366/Rev.1, 25  May 2018.  
131 Communications and Multimedia Act  1998 (Act  588). Viewed at: 
https://www.mcmc.gov.my/en/legal/acts/communications -and-multimedia -act-1998-reprint -200.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.4.4   Transport  
4.4.4.1   Air transport  
4.134.   Malaysia's aviation polices are planned and evaluated by the Ministry of Transport, which 
also represents Malaysia in international organizations and negotiations to expand the international 
air services network. The Ministry also plans and monitors the development of airports according to 
the standards set by the C ivil Aviation Authority Malaysia and the International Civil Aviation 
Organization (ICAO). Malaysia has been a member of ICAO since 1958 and is party to its 
conventions.  
4.135.   The basic legal framework has not undergone major changes in recent years and comprise s 
the Civil Aviation Act  1969 (Act  3), the Carriage by Air Act  1974 (Act  148), the Aviation Offences 
Act 1984 (Act  307), the Airport and Aviation Services (Operating Company) Act  1991 (Act  467), and 
the International Interest in Mobile Equipment (Aircraft)  Act 2006 (Act  659). Further to the 
Malaysian Aviation Commission Act  2015 (Act  771) and the Civil Aviation Regulations  2016, the 
Malaysian Civil Aviation Commission (MAVCOM) was established as an independent entity on 
1 March  2016 to regulate economic and  commercial matters related to civil aviation, including the 
protection of consumers, settlement of disputes between aviation industry players, and the 
administration and management of air traffic rights and routes under public service obligations. 
MAVCOM also advises the Government on aviation matters. The Department of Civil Aviation within 
the Ministry of Transport continues to regulate issues pertaining to safety, maintenance, and 
security.  
4.136.   MAVCOM issues air service licences and permits, which are requi red for the carriage of 
passengers, mail, and cargo by air for hire and reward.132 MAVCOM also issues licences for 
aerodrome operators and ground handling services. Among the criteria MAVCOM applies in assessing 
applications for air service licences and air  service permits are whether the company is incorporated 
in Malaysia, whether it is directly under the control of a Malaysian company or person(s), and the 
ownership structure of the applicant. More than 50% Malaysian ownership is required by a 
non-publicl y listed company to hold an Air Services Licence, Air Services Permit, Aerodrome Operator 
Licence, or Ground Handling Licence, whereas publicly listed companies require 33% Malaysian 
ownership.  
4.137.   Malaysia has 6 international airports, 19 domestic airports, a nd 17 short take -off and landing 
airports. These are all state -owned, and nearly all of them are managed by the government -linked 
company Malaysia Airports Holdings Berhad (MAHB). The Senai International Airport (in JohorBahru) 
is managed by Senai Airports  Terminal Services Sdn Bhd under a 50 -year concession agreement 
that commenced in 2003.  
4.138.   As at 1  October  2022, Malaysia had 11 airlines holding air services licences: Malaysia Airlines 
Berhad with its sister companies MA Swings Sdn Bhd and FireFly Sdn Bhd; the low -cost airline AirAsia 
Berhad and its long -haul carrier AirAsiaX Berhad; Batik Air (a hybrid full -service carrier); and 
SKS Airways, a regional airline that commenced operations in early 2022; and cargo operators such 
as Raya Airways Sdn Bhd, MyJet E xpress Sdn Bhd, and M Jets International Sdn Bhd, as well as 
World Cargo Airline Sdn Bhd. In addition, air services permits are held by 15  charter companies. 
Domestic passenger routes are only served by Malaysian carriers.  
4.139.   At September  2022, Malaysia was p arty to 106 bilateral air service agreements. Among 
these, 21 were open skies agreements.  
4.140.   Until the onslaught of the COVID -19 pandemic, Malaysia's airline industry was growing 
steadily. The number of airline passengers, excluding transit passengers, surpas sed 100  million for 
the first time in 2018, and continued to increase in 2019 (Table  4.25). Nearly 60% of the passenger 
traffic involved the busiest airport by far –Kuala  Lumpur International Airport (KLIA). The decline in 
traffic due to international trav el restrictions therefore hit KLIA particularly hard, but the MCOs also 
caused a considerable drop in domestic air travel. As these MCOs persisted into 2021, passenger 
volumes were even more depressed in 2021 until the final measures were lifted on 11  October. 
 
132 Air service permits only cover unscheduled flights. The oper ation of scheduled flights requires an air 
services licence.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Malaysia's borders were reopened on 1  April 2022, and international arrival is facilitated by dedicated 
"vaccinated travel" lanes.  
Table 4.25 Air transport, selected indicators, 2017 -21 
 
2017  2018  2019  2020 2021  
Total passengers (excluding transit) (million)  99.5 102.4  109.4  26.8 11.0 
 KLIA 58.5 59.9 62.3 13.1 3.9 
 Kota Kinabalu  8.0 8.6 9.4 2.3 1.1 
 Pulau Pinang  7.2 7.8 8.3 1.8 0.5 
 Kuching  5.1 5.6 6.0 1.8 0.8 
 Johor Bahru  3.1 3.5 4.3 1.1 0.4 
 Langkawi  2.8 2.7 2.9 1.0 0.8 
 Subang  2.9 2.0 2.3 0.9 0.6 
 Miri 2.2 2.3 2.4 0.9 0.5 
Total cargo (excluding transit) ('000  tonnes)  948.2  965.8  942.6  789.1  1,008.1  
 KLIA 710.2  714.7  687.2  505.2  636.0  
 Kota Kinabalu  27.4 28.0 28.7 41.4 60.7 
 Pulau  Pinang  119.3  130.1  124.4  123.3  140.7  
 Kuching  24.1 26.6 24.7 30.3 54.0 
 Johor Bahru  7.6 9.7 14.7 10.1 3.3 
 Langkawi  0.8 0.8 0.9 0.5 0.2 
 Subang  36.6 32.3 34.6 58.3 83.4 
 Miri 4.9 5.1 5.3 5.3 7.6 
Aircraft movements ('000)  894.6  916.0  951.8  370.3  244.2  
 KLIA 386.1  398.8  407.3  124.5  73.7 
 Kota Kinabalu  71.9 77.5 82.1 29.2 21.1 
 Pulau Pinang  69.2 73.5 78.4 28.5 16.0 
 Kuching  48.0 54.2 53.6 25.1 18.3 
 Johor Bahru  46.5 52.0 58.3 21.5 9.0 
 Langkawi  24.8 23.7 25.7 10.4 7.5 
 Subang  67.4 50.1 52.1 29.1 22.3 
 Miri 38.4 42.5 42.1 24.9 20.3 
Source:  Ministry of Transport, Transport Statistics Malaysia 2021 . 
4.141.   The transportation of cargo was much less affected by the pandemic than was passenger 
transport. Volumes actually expanded at some airports, particularly Subang, Kuching, and 
Pulau  Pinang, and although volumes fell by 36% at KLIA in 2020, the subsequent re bound in 2021 
was significant. The unevenness in performance between airports may be explained by the 
differences in the available capacity of air cargo, the air cargo rates on a particular route, and the 
type of commodity of air cargo. In 2021, overall ca rgo movements for MAHB airports recorded more 
than 1,000  metric tonnes, an increase of 31.9%. There was an increase in cargo flights , including 
charters as airlines began to operate more cargo flights to Australia; India; Indonesia; Japan; 
Hong Kong,  China ; Chinese  Taipei; and the Republic  of Korea, and in the conversion of passenger 
aircraft to carry cargo in the fuselage. Domestic cargo movements for 2021 registered a growth of 
46.9% over 2020. The gain in the cargo sector in  2021 may be attributed to an increase in demand 
related to e -commerce by consumers, shipment of perishable goods, and pharmaceutical products.  
4.142.   The recovery in air transport has continued in 2022. Air passenger traffic totalled 16.3  million 
in the first five  months, and international p assenger traffic reached 1  million in May, the first monthly 
seven -digit figure since March  2020.133 Cargo volume was up 6% in the first quarter of 2022 relative 
to the same quarter in 2021. Increased transportation of goods is supported by the return of be lly 
cargo capacity as international flights have gradually resumed, as well as the continuing expansion 
of e-commerce and a healthy Malaysian electrical and electronics sector.  
4.143.   MAVCOM has, in accordance with its Long -term Recommendations for the Civil Avia tion 
Industry in Malaysia 2021 -2030, adopted a soft -touch regulatory approach to preserve a competitive 
domestic market for scheduled air services. Domestic airfares are monitored continuously during 
peak seasons, and airlines are required to file their fa res for selected routes. MAVCOM is also 
encouraging more airlines to serve monopoly routes, routes with high demand, and routes with no 
alternative modes of transport.  
 
133 MAVCOM (2022), Malaysian Aviation Industry Outlook: Key Highlights . Viewed at: 
https://www.mavcom.my/wp -content/uploads/2022/07/20220615 -MAVCOM -ECONOMICS -WAYPOINT -JULY-
2022-FINAL.pdf . WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.4.4.2   Maritime transport  
4.4.4.2.1   General  
4.144.   The Ministry of Transport is the principal agency involved in  the regulation of the maritime 
sector and related issues. Its tasks include the setting of policies and planning regarding maritime 
safety (passengers, crew, and ships) and environmental measures; strengthening international 
cooperation through maritime t ransport agreements, memoranda of understanding, and human 
capital development programmes; endorsing and implementing international conventions and 
amending domestic regulations as appropriate; processing and issuance of domestic shipping 
licences; and for mulati ng, implement ing, and monitoring policies regarding federal port activities, 
including privatization.  
4.145.   The legal framework comprises the Carriage of Goods by Sea Act  1950 (Act  527), the Federal 
Light Dues Act  1953 (Act  250), the Penang Port Commission  Act 1955 (Act  140), the Port Authorities 
Act 1963 (Act  488), the Bintulu Port Authority Act  1981 (Act  243), the Ports (Privatisation) Act  1990 
(Act 422), the International Yacht Registration Act Langkawi 2003 (Act  630), and the Merchant 
Shipping Ordinance  1952. The Ordinance was amended in 2017 to update the ship registration and 
licensing framework. The Ministry has also issued a standard operating procedure for the detention, 
inspection, and release of containers.  
4.146.   Malaysia has been a member of the Intern ational Maritime Organization (IMO) since 1971 
and has ratified 26 of its conventions, protocols, and agreements, notably the Convention on the 
International Maritime Organization, the Convention for the Safety of Life at Sea, the Convention for 
the Preven tion of Pollution of Ships, and the Convention on Standards of Training, Certification and 
Watchkeeping for Seafarers.134 The Maritime Training Institute offers training programmes to 
increase the competency of Malaysian seafarers, including an Integrated T echnical Cooperation 
Programme for human capital development organized jointly with the IMO since 2013.  
4.147.   The Maritime Institute of Malaysia (MIMA) was established in 1993 as a policy research 
institute and to serve as the national focal point for research i n the maritime sector. MIMA's role is 
advisory and consultative. MIMA also complements the efforts of government agencies involved in 
the sector by mobilizing expertise and to assist and support them in policy planning and 
implementation. MIMA's research c entres focus on ecologically sustainable development of marine 
resources and the conservation and protection of the marine environment, maritime security and 
diplomacy, maritime economic activities and industries, ocean law and related issues, and the 
mana gement of the Straits of Malacca.  
4.4.4.2.2   Shipping  
4.148.   Vessel registration in Malaysia is administered by the Marine Department of Malaysia, a 
department under the Ministry of Transport. Traditional registration is assigned to four  ports (Port 
Kelang, Pulau Pinang, Ko ta Kinabalu, and Kuching) while the Malaysian International Ship Registry 
(MISR) is located in Labuan.  
4.149.    The Merchant Shipping Ordinance (Part  II B, Subsection 65KA(1)), as amended with effect 
from 1  January  1980, reserves domestic shipping for Malaysian -flagged vessels holding a domestic 
shipping licence.135 To obtain such a licence, the vessel must be owned by a Malaysian citizen or an 
enterprise with minimum 51% Malaysian ownership. The Domestic Shipping Licensing Board 
regulates and controls the licensing  of ships engaged in shipping between ports in Malaysia. A foreign 
registered vessel may be granted a temporary domestic shipping licence if it is demonstrated that 
no Malaysian registered vessel is available for a particular shipment or industry. As noted  in previous 
Secretariat reports, foreign vessels are permitted to transport cargo or undertake transhipment of 
containers on selected domestic routes. There has been no enlargement of this permitted route 
network since 2018. For international maritime tra nsport, traders are free to choose between 
domestic and internationally registered vessels.  
 
134 IMO, Status of Conventions . Viewed at: 
https://www.imo .org/en/About/Conventions/Pages/StatusOfConventions.aspx .  
135 Domestic shipping is defined as services, other than fishing, in the exclusive economic zone, or 
transportation of goods and/or passengers from one place to another within the exclusive economic zone.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.150.   At the end of 2021, 5,674 ships with a total gross register tonnage (GRT) of 11.5  million 
were registered in Malaysia (Table  4.26). Whereas the number of vessels ha s tended to increase 
over the last 10 years, the total GRT has been fairly stable. MISC Berhad, a government -linked 
company owned 62.67% by PETRONAS, is a major provider of energy -related maritime solutions 
and services. MISC owns and operates a modern and  diversified fleet of petroleum and petroleum 
product tankers, LNG vessels, and offshore floating facilities, as well as two LNG floating storage 
units.  
Table 4.26 Total vessels registered in Malaysia by type and weight, 2017 -21 
 
2017  2018  2019  2020  2021  
No. '000 
GRT No. '000 
GRT No. '000 
GRT No. '000 
GRT No. '000 
GRT 
Total 5,482  11,984  5,558  11,978  5,626  11,967  5,728  11,836  5,674  11,534  
Oil tanker  260 1,987  261 1,827  280 1,799  287 1,477  283 1,257  
LNG, LPG 
carrier  41 2,728  39 2,762  39 2,762  39 2,762  38 2,676  
Chemical, 
petroleum 
tanker  42 358 41 357 39 195 39 195 31 141 
Bulk, 
grain, ore, 
log carrier  17 469 18 517 23 481 28 487 29 491 
General 
cargo, 
semi 
container  478 533 472 519 468 519 476 517 470 500 
Passenger, 
general, 
passenger 
ship 352 77 357 79 362 76 367 126 370 134 
Roll-on, 
roll-off 10 165 10 162 10 162 11 162 13 254 
Full 
container  25 220 25 234 33 328 36 351 40 420 
Offshore 
support 
vessel  299 356 309 380 325 415 331 424 319 403 
Barge  1,493  1,580  1,518  1,619  1,550  1,648  1,572  1,687  1,559  1,659  
Other  2,465  3,511  2,508  3,522  2,497  3,582  2,542  3,647  2,522  3,600  
Source:  Ministry of Transport, Transport Statistics Malaysia  2021. 
4.151.   The MISR  seeks to attract foreign companies and individuals to register ships at the 
Labuan  Port with no need to comply with any Malaysian majority shareholding requirement. 
However, the vessel owning company must be incorporated in Malaysia, and the ship manager must 
be a Malaysian citizen or corporation. The authorities do not wish the MISR to be perceived as a flag 
of convenience registry. Ships registered in the MISR fly the Malaysian flag and are considered 
Malaysian carriers (Table  4.27).  
Table 4.27 Total vessels registered in the Malaysian International Ship Registry by type, 
2015 -21 
  2015  2016  2017  2018  2019  2020  2021  
Anchor handling, 
standby, supply  Number  10 7 39 40 32 23 17 
 GT 26,480  19,182  118,559  129,756  111,449  88,204  74,993  
Barge  Number  2 0 2 2 1 1 0 
 GT 37,221  0 40,568  40,568  8,508  8.508  0 
Other  Number  3 5 1 2 3 4 7 
 GT 10,084  14,187  59,295  70,976  133,126  140,943  261,585  
Total  Number  15 12 42 44 36 28 24 
 GT 73,785  33,369  218,422  241,300  253,083  237,655  336,578  
Source:  Marine  Department of Malaysia.  
4.152.   The authorities provide tax incentives and financing to foster growth in the maritime sector. 
Vessels registered in the Traditional Ship Registry are exempt from taxation for income earned on 
the transportation of passengers and cargo, and the crew is exempt from personal income tax. The 
Malaysia Development Bank (BPMB) manages the Maritime Development Fund, which provides 
conventional and Islamic financing for the acquisition of new and recently built second -hand vessels 
by Malaysian -owned (51% or more) enterprises. The maximum amount of financing is WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  MYR 500 million per single client. The BPMB also administers the Maritime and Logistics Scheme, a 
MYR 1.5 billion facility for ex isting and new companies dealing with, or involved in, maritime -related 
activities and services, aerospace, and logistics. Supported activities include the acquisition of new 
or second -hand vessels (or aircraft), machinery, and equipment, as well as land, and the 
construction of shipyards, warehouses, and port facilities. Funds are being made available from 
1 January  2021 until 2023.  
4.4.4.2.3   Ports  
4.153.   Seven  major federal ports, which are owned and regulated by the Ministry of Transport, are 
administered by their respec tive port authorities, i.e. the Penang Port Commission, the Port Klang 
Authority, the Kemanam Port Authority, the Johor Port Authority (the Johor and Tanjung Pelepas 
Ports), the Kuantan Port Authority, and the Bintulu Port Authority.136 State ports such as the Sabah 
Port Authority, the Rajang Port Authority, the Miri Port Authority, and Lumut Port are administered 
by state governments.137 All ports in Sabah and Sarawak (excluding the Bintulu and Labuan Ports) 
are under the purview of the state governments.  
4.154.   Port operations have largely been privatized under long -term concession agreements. For 
example, Malaysia's busiest port (Klang) is operated by Northport (Malaysia) Sdn Bhd and Westports 
Malaysia Sdn Bhd, and Tanjung Pelepas, which is an important transit po rt, by Pelabuhan Tanjung 
Pelepas Sdn Bhd. Most port concessions are of 30  years' duration, although the duration takes into 
account the time needed for the development of the port and for the port operators to recoup their 
investment. The maximum foreign o wnership in port operations is 40%.  
4.155.   The pandemic had some negative effect on freight volumes in 2020 and 2021, both on 
incoming and outbound shipments (Table  4.28). On the other hand, the volume of 
transhipments  increased by 6% from 2019 to 2020, and a fur ther 20% from 2020 to 2021. The 
increase in total transhipment was mainly due to the global market rebound and spin -off impact 
post-2020 COVID -19, and shipping contingency plan for recovery on cargo overflow due to 
congestion issues.  
Table 4.28 Main ports and activities, 2017 -21 
  2017  2018  2019  2020  2021  
Cargo ('000  freight  weight tonnes ) 
Total  544,711  570,701  595,478  564,329  591,489  
 Export  228,459  222,937  241,792  222,703  218,419  
 Import  191,810  214,285  223,453  203,503  207,882  
 Transhipment  124,441  133,479  130,233  138,123  165,188  
Main ports  
Klang  212,308  220,700  243,108  221,421  235,539  
 Export  104,202  104,418  116,805  105,428  112,552  
 Import  108,106  116,282  126,303  115,993  122,987  
 Transhipment  0 0 0 0 0 
Tanjung Pelepas  130,522  139,807  137,203  144,625  168,059  
 Export  5,813  6,231  6,272  6,251  4,939  
 Import  2,203  2,342  2,500  2,446  3,141  
 Transhipment  122,506  131,234  128,432  135,928  159,979  
Bintulu  47,645  44,054  45,196  42,896  41,837  
 Export  40,433  36,994  39,577  37,254  32,989  
 Import  5,919  5,485  4,370  4,245  4,083  
 Transhipment  1,293  1,575  1,249  1,397  4,765  
Container ('000  TEU)  
Total  23,784  24,941  26,420  26,678  28,419  
 Export  4,145  4,437  4,605  4,595  4,631  
 Import  4,070  4,347  4,584  4,473  4,523  
 Transhipment  15,569  16,157  17,231  17,610  19,266  
Main ports       
Klang  11,978  12,316  13,581  13,244  13,724  
 Export  2,161  2,354  2,486  2,565  2,684  
 Import  2,175  2,395  2,549  2,556  2,649  
 Transhipment  7,642  7,567  8,546  8,123  8,391  
 
136 In addition, Teluk Ewa Port is administered by the Penang Port Commission (Teluk Ewa), and the 
Labuan port by the Labuan Port Authority.  
137 Lumut Port is a privately owned port.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Tanjung Pelepas  8,261  8,961  9,077  9,846  11,200  
 Export  336 368 364 362 325 
 Import  179 190 203 208 209 
 Transhipment  7,746  8,402  8,510  9,276  10,667  
Pulau Pinang  1,524  1,510  1,491  1,388  1,278  
 Export  724 716 706 648 606 
 Import  706 706 701 631 608 
 Transhipment  94 89 84 110 64 
Source:  Ministry of Transport, Transport Statistics Malaysia  2021. 
4.156.   Several Malaysian ports are specialized in their operations. The Port of Tanjung Pelepas, 
primarily dedicated to transhipment of containers, processed 55% of the containers in transit 
through Malaysia (representing nearly 97% of the transhipment volume by weight) in 2021. Other 
ports, such as Bintulu, specialize in the export of LNG, petroleum, and palm oil; Port Dickson is an 
important oil terminal operated by Shell and Esso; and the Teluk Ewa Jetty is used for exporting 
cement and transporting raw materia ls and spare parts to the local cement plant.  
4.4.5   Tourism  
4.157.   Before the outbreak of COVID -19, the tourism sector accounted about 6.8% of total gross 
value added  in 2019.138 Malaysia remained a net exporter of travel services; in 2019, travel services 
generated MYR  82.1 billion, equivalent to  48.3% of total services exports ( Table  1.4). Malaysia 
ranked 29th of 140  countries in the World Economic Forum's (WEF) Travel & Tourism Competitiveness 
Report 2019, the second -best performer in ASEAN after Singapore.139 
4.158.   Malaysia received 26.1  million international tourists in 2019, mainly from Singapore, 
Indonesia, China, and Thailand, which accounted for 73% of all international tourist arrivals 
(Chart  4.6). The number of tourist arrivals was practically stagnant during the period 2015 -19, 
registering an annual growth rate of 0.4%. This may be partly due to the lack of product 
development, poor maintenance of tourist attractions, and effective marketing activities; congestion 
and poor facilities at the entry points from n eighbouring countries; and weak governance.140 For 
instance, although Singapore remained the major source of visitors, its share declined from 50.3% 
in 2015 to 38.9% in 2019.  
Chart 4.6 Tourism sector's performa nce, 2015 -21 
 
Source:  Department  of Statistics Malaysia (2020), Tourism Satellite Account ; and Tourism Malaysia , Tourist 
Receipts . Viewed at: http://mytourismdata.tourism.gov.my/ . 
 
138 Department of Statistics Malaysia (2021), Tourism Satellite Accoun t 2020, September. The figure 
(6.8% of total GVA) refers to the direct tourism sector, which is the part of gross value added generated by the 
tourism industry and other industries of the economy that directly serve visitors in Malaysia. Counting all 
estab lishments in the industry, regardless of whether all outputs are provided to visitors and tourism -related 
activities, the tourism industry accounted for 16.1% of total GVA in 2019.  
139 WEF (2019), The Travel & Tourism Competitiveness Report  2019. 
140 Economic  Planning Unit, Twelfth  Malaysia Plan, 2021 -2025, pp. 3-8. 
WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.159.   Total inbound expenditure on tourism and related activities increased by 5.7% per year from 
MYR 69.1 billion in 2015 to MYR  86.1 billion in 2019 (Chart  4.6). In addition, the healthcare travel 
segment continued to expand, recording a revenue increase of 86.0% from 2015 to 2019.141 Foreign 
patients primarily come for general health screening, cardiology, IVF, and oncology. The healthcare 
visitors are primarily from Indonesia, China, India, and Japan.  
4.160.   The MCOs provoked by the outbreak of COVID -19 led to a sharp drop in inte rnational visitors, 
declining from 26.1  million arrivals in 2019 to 4.3  million in 2020 and a mere 134,000 in 2021. 
Similarly, tourism receipts fell from MYR  86.1 billion in 2019 to MYR  12.7 billion in  2020 and 
MYR 0.2 billion in 2021.142 The Visit Malaysia  2020 campaign, which was to promote Malaysia as an 
attractive tourist destination, was cancelled.143 Instead, the Government introduced various 
measures to assist the tourism sector (see below).  
4.161.   In the main, Malaysia's tourism industry i s managed by two government bodies, namely the 
Ministry of Tourism, Arts and Culture (MOTAC) and the Malaysia Tourism Promotion Board (MTPB). 
The MOTAC is responsible for policy development and sector regulation. The MTPB, an agency under 
the MOTAC and com monly known as Tourism Malaysia, promotes Malaysia as a tourism destination, 
along with the Islamic Tourism Centre and MyCEB (Malaysia Convention and Exhibition Bureau), 
assists tourism service providers, and develops and promotes investment opportunities.  Other 
government agencies are also engaged in specific segment developments including the Ministry of 
Agriculture and Food Industries  for agrotourism, and the Medical Healthcare Travel Council (MHTC) 
under the Ministry of Health for medical tourism.  
4.162.   Under  the Tourism Industry Act  1992, tourism service providers are required to register 
and/or obtain a licence before operating a tourism -related business. The Act stipulates the licensing 
requirements for tour operating business and travel agencies, tourist g uides, tourism training 
institutes, and tourism vehicle business for excursion bus licences or hire -and-drive cars (applicable 
only for applicants in Sabah, Sarawak, and Labuan).144 
4.163.   Government policy for the tourism sector is covered in several documents, i ncluding the 
Twelfth  Plan, the Malaysian Plans, and the National Tourism Policy (NTP) 2020 -2030, and the 
Tourism Recovery Plan 2022. The tourism sector is a focus area of the Twelfth  Plan. Several 
strategies are outlined in the Twelfth  Plan, including rest oring tourist confidence in travel in the 
aftermath of the COVID -19 pandemic; improving the quality of products and services such as 
ecotourism, cultural immersion activities, and better working environment and training for staff; 
enhancing sustainability of tourism products through better service and visibility; and improved 
marketing strategies.  
4.164.   Moreover, under the Malaysian Plans and the NTP 2020 -2030, the Government aims to boost 
the country's tourism revenue by attracting more high -yield tourists, with  a focus on sustainability, 
competitiveness, and inclusiveness. MOTAC aims to position Malaysia one of the world's ecotourism 
destinations and elevate the country's status into a top tourism destination worldwide. Key strategies 
in achieving this target in clude (i)  strengthened governance capacity; (ii)  the creation of special 
tourism investment zones; (iii)  embrace of smart tourism; (iv)  customized travel to enrich tourists' 
experience and satisfaction; (v)  reinforcing commitment to strengthen sustainable and responsible 
tourism; and (vi)  enhanced human capital development. The policy stresses the adoption and 
application of digital technology for sustainable and inclusive development of the tourism industry. 
In addition, MOTAC launched a Tourism Recovery Plan 2022 with various incentives (e.g.  discounts, 
vouchers, and rebates) for consumers regardless of origin/nationality, with the aim of reviving 
domestic tourism industry (see below).  
 
141 The 1,220,000 foreign patients generated revenue of MYR  1.7 billion in 2019, up from 
MYR 914 million (859,000 foreign patients) in 2015. Malaysia Healthcare Travel Council, Healthcare Travel ler 
Statistics . Viewed at: https://www.mhtc.org.my/statistics/ .  
142 Tourism Malaysia, Tourist Receipts . Viewed at: http://mytourismdata.tourism.gov.my/.   
143 Malaysia Tourism Promotion Board (2020), "Cancellation  of Visit Malaysia 2020 (VM2020) Campaign 
and Guest Stay at Tourist Accommodation Premises Throughout the Movement Control Order (MCO)", 
19 March. Viewed at: https://www.tourism.gov.my/media/view/cancellation -of-visit-malaysia -2020-vm2020 -
campaign -and-guest -stay-at-tourist -accommodation -premises -throughout -the-movement -control -order -mco.  
144 Tourism Industry Act  1992; and Malaysian Investment Development Authority (MIDA), Tourism and 
Travel Related Services . Viewed at: https://mida.gov.my/wp -
content/uploads/2020/07/20200131123840_BOOKLET -9-TOURISM -AND-TRAVEL -RELATED -SERVICES.pdf .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.165.   Foreign equity participation is restricted in certain tourism activitie s. In tour operators and 
travel agencies, equity is capped according to the country of origin of the foreign shareholder, for 
instance, 30% for non -ASEAN investors (Table  4.29). Autonomous liberalization of the tourism 
sector includes theme parks; conventi on and exhibition centres; travel agencies and tour operators' 
services (inbound travel only); hotel and restaurant services for 4 - and 5 -star hotels only; and food 
and beverage serving services for consumption on the premises for 4 - and 5 -star hotels only .145 
Table 4.29 Foreign equity limits in tourism sector  
Investment  Foreign equity limits  
Hotels  
1- and 2 -star 0 
3-star 70% 
4- and 5 -star 100%  
Projects  
Theme parks  100%  
Recreational parks/other tourism projects  51% 
Convention centres  100%  
Healthcare  100%  
Tour operator/travel agencies  
Inbound and ticketing  Singapore and Cambodia: 70%  
Other ASEAN: 51%  
Non-ASEAN: 30%  
Inbound  100%  
Outbound  0 
Source:  MIDA , Hospitality (Hotels & Tourism) . Viewed at: 
https://www.mida.gov.my/industries/services/hospitality -hotels -and-tourism/ ; WTO document 
WT/TPR/S/366/Rev.1, 25  May 2018; and information prov ided by the authorities.  
4.166.   A tourism tax, at the rate of MYR  10 per room per night, is levied on tourists staying at any 
premises registered under the Tourism Tax Act  2017.146 Malaysian citizens and permanent residents 
of Malaysia, certain operators under the  Homestay Malaysia Programme, educational institutes, 
religious or welfare bodies operating accommodation premises, and accommodations with less than 
four rooms are exempted from the tourism tax.147 The scope of the tourism tax has been broadened 
to premise s reserved via digital platforms regardless of whether the booking sites are located in or 
outside Malaysia.148 This rule has been enforced since 1  July 2021. The registration of digital 
platform service providers who provide services related to online book ing of accommodation 
premises to tourists began  on 1  October  2022, with tourism tax collection beginning 
on 1 January  2023.  
4.167.   The Government introduced various measures to alleviate the adverse impact of the 
COVID -19 pandemic on the tourism sector. The 2022  budget allocated MYR  2.6 billion to support 
the sector, including MYR  2.0 billion for the Hiring Incentives that provide incentives worth 
20%-30% of salary for hiring of unemployed jobseekers and also MYR  600 million for the Wage 
Subsidy Programme that pro vided MYR  600 per employee to all eligible employers.149 Other relief 
measures include exemption from the tourism tax, income tax relief of MYR  1,000 for domestic 
tourism expenses, and assistance to arts, culture, entertainment, events, and exhibitions.150 Under 
the PENJANA, since 1  July 2020, foreign tourists staying in registered premises have been exempted 
from the tourism tax, an exemption extended until 31  December  2022.151 
 
145 MIDA, General Policies, Facilities and Guidelines . Viewed at: https://www.mida.gov.my/wp -
content/uploads/2021/04 /BOOKLET -1-GENERAL -POLICIES -FACILITIES -AND-GUIDELINES -Chapter1 -Getting -
Started -Services.pdf ; and information provided by the authorities.  
146 Federal Government Gazette, Tourism Tax (Rate of Tax) Order  2017, P.U.(A)  241, 22 August  2017.  
147 Federal Government Gazette, Tourism Tax (Exemption) Order  2017, P.U.(A)  240, 22 August  2017.  
148 Federal Government Gazette, Tourism Tax (Rate of Digital Platform Service Provider Tax) 
Order  2021, P.U.(A)  113, 16 March  2021; and Tourism Tax (Digital Platform Service Provider) 
Regulations  2021, P.U.(A)  153, 31 March  2021.  
149 Information provided by the authorities.  
150 WTO, COVID -19 and Trade – Malaysia . Viewed at: 
https://www.wto.org/english/tratop_e/covid19_e/covid_details_by_country_e.htm?country=MYS .  
151 RMCD, Tourism Tax (TTx) Policy No.  1/2021, TTx Exemption, 18  March  2021; and Tourism Tax (TTx) 
Policy No.  2/2021, Extension of TTx Exemption, 27  December  2021.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  4.168.   The Government has implemented the following financial assistance schemes for the sector:  
• The PENJANA Tourism Financing (PTF) facility through the BNM152: Malaysian SMEs and 
micro enterprises in core tourism and tourism -related sectors may apply for financial support 
up to MYR  75,000 and MYR  500,000, respectively, at a financing rate of up to 3.5% per 
annum over a maximum of seven years including a repayment moratorium of six  months. 
Eligible sectors include tourism accommodation premises; travel agencies and tour 
operators; transportation of tourists; medical tourism; meetings, incent ives, conferences, 
and exhibitions; money services businesses; capacity -building institutions; and 
tourism -related retail recreation and wellness.  
• The Tourism Infrastructure Scheme (TIS) is a soft loan that finances the acquisition of land, 
construction of  buildings, machinery, and refurbishment/upgrades of existing buildings and 
facilities in the tourism industry.153 Eligibility criteria include Malaysian ownership 
(minimum  51% owned by Malaysians); a minimum paid -up capital of MYR  5 million or 
minimum 20% of the total financing, whichever is higher; and based on Malaysia 
Development Bank (BPMB)'s evaluation and credit policy on the financed amount with 
endorsement from MOTAC. The scheme is effective from 1  January  2021 until 
31 December  2023. The Government  will be subsidizing the financing rate up to 1.5%. TIS 
was introduced by the Government for tourism industry operators before the COVID -19 
pandemic.  
4.169.   A wide range of general fiscal incentives are available for investments in the tourism 
industry, as well a s in support of tourism -related activities (Table  4.30).  
Table 4.30 Fiscal incentives for tourism projects, 2022  
Scheme  Eligibility  Incentive offered  
Special relief for 
individual income tax on 
domestic tourism 
expenses under the 
Strategic Programme to 
Empower the People and 
the Economy 
(PEMERKASA)  Malaysians  The domestic travel income tax relief allowed 
individuals to claim up to MYR  1,000 in tax 
relief for travel expenses (effective until 
31 December  2022). Eligible expenses include 
hotel accommodation (only those registered 
with MOTAC), as well as entrance fees to 
tourist attractions.  
Tourism tax exemption  Malaysian tourists, permanent 
residents of Malaysia  
 
 
Foreign tourists  Exemption from tourist tax at a flat rate of 
MYR 10/room/night in accordance with Tourism 
Tax (Exemption) Order  2017.  
 
Exemption from tourism tax at a flat rate of 
MYR 10/room/night until 31  December  2022 
under PENJANA.  
Pioneer Status (PS)  Companies unde rtaking new 
investments in 1 - to 3-star 
hotels and/or tourism projects  Five-year partial exemption from income tax 
payments. Requirement to pay tax on only 
30% of statutory income, commencing from 
day of production. Carry -forward of 
unabsorbed capital allo wances and 
accumulated losses up to 7 consecutive years.  
Investment Tax 
Allowance (ITA)  Companies undertaking new 
investments in 1 - to 3-star 
and/or tourism projects  Alternative to Pioneer Status. Allowance of 
60% on the qualifying capital expenditure 
incurred within 5 years from date of 
expenditure. Companies may offset this 
allowance against 70% of statutory income in 
the first year of assessment. Carry -forward of 
unutilized allowances.  
 
152 BNM, PENJANA Tourism Financing: FAQ . Viewed at: 
https://www.bnm.gov.my/documents/20124/2294076/PTF_FAQ_en.pdf ; and Small Medium Enterprise 
Development Bank Malaysia, Penjana Tour ism Financing (PTF) . Viewed at: 
https://www.smebank.com.my/en/financing/programmes/penjana -tourism -financing -ptf.  
153 BPMB, Tourism Infrastructure Scheme . Viewe d at: https://www.bpmb.com.my/tourism -
infrastructure -scheme .  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Scheme  Eligibility  Incentive offered  
Tax incentives for 
tourism projects  Expanded to include 
integrated tourism and sports 
tourism projects, new 
investment for international 
theme park  Integrated tourism and sports tourism 
projects:  
Pioneer Status with tax exemption of 70% of 
statutory income for five years; or ITA of 60% 
on the qualifying capital  expenditure incurred 
within 5 years. This allowance can be offset 
against up to 70% of statutory income, 
effective from 1  January  2020.  
 
International Theme Park:  
Pioneer Status with tax exemption of 100% of 
statutory income for the five years; or ITA of 
100% on the qualifying capital expenditure 
incurred within 5  years. This allowance can be 
offset against up to 70% of statutory income, 
effective from 1  January  2020.  
Incentives for 
reinvestments in hotels 
and tourism projects  Companies that reinvest in 
expanding/modernizing 1 - to 
5-star hotels and/or tourism 
projects as follows:  
- Hotel project: 3  rounds  
- Tourism project: 1  round  Pioneer Status with income tax exemption of 
70% for five years. Possibility to carry forward 
unabsorbed capital allowances and 
accumulated losses; or ITA of 60% on 
qualifying capital expenditure within 5 years. 
The allowance can be offset against 70% of 
statutory income in each year of assessment. 
Unutilized allowances can be carried forward 
up to 7 consecutive years until fully  absorbed.  
Incentive for healthcare 
travel  Investment in construction of 
new private hospitals or 
expansion renovation of 
existing ones. Hospitals must 
be Ministry of Health 
(MOH) -licensed and 
MHTC -registered. This 
incentive is applicable 
for applications received by 
MIDA not later than 
31 December  2022 ITA of 100% on qualifying capital expenditure 
within 5  years. The allowance can be offset 
against 100% of statutory income in each year 
of assessment . Unutilized allowances can be 
carried forward until fully absorbed.  
Healthcare travel: double 
deduction for 
accreditation expenses  Private hospitals incurring 
expenses in obtaining 
domestic/international 
accreditation  Double deduction on expenses incurre d in 
obtaining domestic or internationally 
recognized accreditation. MOF approves the 
accreditation body that is recognized by 
agencies such as SIRIM  Berhad , MOH.  
Incentives for the luxury 
yacht industry  Companies  constructing luxury 
yachts; and companies  
carrying out repair and 
maintenance services  for 
luxury  yachts   Pioneer  Status with income  tax exemption  of 
70% for 5 years.  Carry-forward of u nabsorbed  
capital  allowances  and accumulated losses up 
to 7 years from Year Assessment 2019 
onwards; or ITA of 60% on qualifying capital 
expenditure for 5  years. The allowance can be 
offset against 70% of statutory income in each 
year of assessment.  
Application should be submitted to MIDA. 
Application received by MIDA from 
1 January  2021 until 31  December  2022 i s 
eligible to be considered for this incentive.  
Double deduction on 
overseas promotion and 
trade fairs  Hotels and tour operators  Double deduction on qualifying expenditure 
incurred for various promotional activities 
overseas and for participation in approved 
international trade fairs in and outside of 
Malaysia. Claims should be submitted to the 
Inland Revenue Board (IRB).  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Scheme  Eligibility  Incentive offered  
Tax exemption for tour 
operators  Tour operators licensed by 
MOTAC  Tour operators who bring in at least 
750 foreig n tourists in groups in a year are 
exempt from income tax related to the income 
derived from operating such tours.  
Under PEMERKASA package, tour operators 
organizing domestic tour packages involving 
the participation of least 200  local tourists per 
year; a nd inbound tourists for tourism 
packages to Malaysia are exempt from income 
tax related to the income derived from 
operating such tours. Claims should be 
submitted to the IRB.  
Tax exemption  for 
organizing/promoting 
international conferences 
and trade exhi bitions  Companies promoting/ 
organizing  international 
conferences  in Malaysia  Tax exemption  on income earned from  bringing 
at least 500  foreign participants into the 
country (applies to local companies promoting 
conferences only). Tax exemption  for income  
earned  from organizing approved international 
trade exhibitions, whereby the organizers bring  
in at least 500 foreign  visitors  per year (applies  
to both local and foreign companies), effective 
until 2025. Claims should be submitted to the 
IRB. 
Deduction  on cultural 
performances  Companies  promoting  and 
managing  musical/cultural 
groups and sponsoring 
approved cultural 
performances  Single  deduction  for expenditure.  Ceiling  for 
deductions for local performances is 
MYR 500,000 per year. Ceiling for deductions 
for foreign performances is MYR  200,000 per 
year. Claims should be submitted to the IRB.  
Incentive  for car rental  
operators  Car rental  operators  and tour 
operators  Car rental operators may receive a full excise 
duty exemption on purchase of national cars.  
Tour operators are eligible for a 50% 
excise  duty exemption on locally assembled 
four-wheel -drive vehicles.  
Tour operators are eligible for Accelerated 
Capital Allowance on expenses incurred on the 
purchase of locall y assembled excursion buses 
with an initial allowance of 20% and an annual 
allowance of 40%, effective until 2024.  
Claims should be submitted to the MOF.  
Tax exemptions  on the 
value of increased 
healthcare services 
exports  Healthcare  services  offered to 
foreign clientsa Tax exemption of 100% on the value of 
increased exports  subject  to 70% of the income  
for each  year of assessment.  
a Foreign clients are defined as a company, a partnership, an organization, or a cooperative society 
that is incorporated or registered outside Malaysia or a non -Malaysian citizen individual or a 
non-resident Malaysian citizens living abroad and their dependents.  
Source:  MIDA , Tourism and Travel Related Services . Viewed at: https://www.mida.gov.my/wp -
content/uploads/2020/07/20200131123840_BOOKLET -9-TOURISM -AND-TRAVEL -RELATED -
SERVICES.pdf ; and infor mation provided by the authorities.  
 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports by HS section and major HS  chapter/subheading, 
2017 -21 
HS Section/chapters/subheadings  2017  2018  2019  2020  2021  
Total exports (USD  billion)  217.7  248.7  240.2  234.1  299.2   
(% of total exports)  
01 Live animals and products  0.6 0.5 0.6 0.6 0.6 
02 Vegetable products  0.4 0.4 0.4 0.4 0.4 
03 Fats and oils  6.2 4.9 4.9 5.8 6.6 
 1511 Palm oil and its fractions, not chemically modified  4.5 3.5 3.6 4.2 4.7 
04 Prepared food, beverages and tobacco  2.8 2.6 2.7 2.6 2.3 
05 Mineral products  16.2 16.4 15.3 12.1 13.2 
 27 Mineral fuels and oils  15.4 15.7 14.4 11.4 12.5 
 2710 Petroleum oils (..), other than crude  6.1 6.5 6.2 5.5 6.9 
 2711 Petroleum gases and other gaseous hydrocarbons  4.7 4.6 4.5 3.3 3.3 
06 Chemicals and products thereof  5.6 5.5 5.5 5.0 6.0 
 29 Organic chemicals  1.7 2.0 1.8 1.5 2.0 
 38 Miscellaneous chemical products  2.0 1.8 1.8 1.7 2.0 
07 Plastics and rubber  6.8 6.8 7.0 8.3 9.0 
 39 Plastics and articles thereof  3.4 3.8 4.0 3.5 3.4 
 40 Rubber and articles thereof  3.3 3.0 3.0 4.8 5.6 
 4015 Articles of apparel and clothing accessories of 
vulcanised rubber other than hard rubber  1.7 1.8 1.8 3.7 4.4 
08 Raw hides and skins; leather, furskins and articles thereof  0.1 0.1 0.1 0.0 0.1 
09 Wood, cork, straw  1.6 1.4 1.3 1.0 0.9 
10 Pulp of wood; paper and paperboard  0.6 0.6 0.7 0.7 0.7 
11 Textiles and textile articles  1.4 1.3 1.4 1.2 1.1 
12 Footwear, headgear, etc.  0.1 0.1 0.1 0.1 0.1 
13 Articles of stone, plaster, cement  0.8 0.8 0.9 0.9 0.9 
14 Precious stones and metals  1.4 1.3 1.1 0.7 0.8 
15 Base metals and articles thereof  5.6 6.1 6.4 6.2 7.3 
 72 Iron and steel  1.1 1.3 2.0 2.2 2.2 
 74 Copper and articles thereof  1.0 1.2 1.2 0.9 1.1 
 76 Aluminium and articles thereof  1.5 1.6 1.6 1.6 2.4 
16 Machinery, electrical equipment  42.6 43.7 43.2 45.5 42.8 
 84 Machinery and mechanical appliances, parts thereof  11.0 10.2 9.1 8.6 8.4 
 8471 Automatic data processing machines and units 
thereof (..)  3.9 3.8 2.8 2.1 2.1 
 85 Electrical and electronic equipment  31.6 33.5 34.2 36.9 34.4 
 8517 Telephone sets, including telephones for cellular 
networks (..)  1.8 1.5 1.7 2.3 2.1 
 8523 Discs, tapes, solid -state non -volatile storage 
devices, other media for the recording of sound (..)  1.8 1.8 1.8 2.5 2.2 
 8541 Diodes, transistors, similar semiconductor 
devices  (..) 3.9 3.5 3.6 3.3 2.8 
 8542 Electronic integrated circuits  15.1 18.4 18.6 21.0 19.9 
17 Transport equipment  1.7 1.8 1.9 1.9 1.3 
18 Precision equipment  3.8 4.0 4.5 4.9 4.4 
 90 Optical, photo, technical, medical, etc apparatus  3.6 3.8 4.3 4.7 4.2 
19 Arms and ammunition  0.0 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles  1.5 1.4 1.6 1.9 1.5 
 94 Furniture, lighting, signs, prefabricated buildings  1.2 1.1 1.3 1.5 1.2 
21 Works of art, etc.  0.0 0.0 0.0 0.0 0.0 
Other  0.3 0.4 0.3 0.2 0.2 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table A1. 2 Merchandise imports by HS section and major HS chapter/subheading, 
2017 -21 
HS Section/chapters/subheadings  2017  2018  2019  2020  2021  
Total imports (USD billion)  194.7  218.0  205.0  190.4  238.2   
(% of total imports)  
01 Live animals and products  1.4 1.3 1.4 1.5 1.4 
02 Vegetable products  2.4 2.3 2.4 2.8 2.5 
 10 Cereals  0.7 0.8 0.8 0.9 0.9 
03 Fats and oils  0.8 0.8 0.8 1.1 1.5 
04 Prepared food, beverages and tobacco  3.2 3.0 3.1 3.4 3.2 
05 Mineral products  14.0 15.7 16.0 13.3 14.1 
 26 Ores, slag and ash  1.0 1.1 1.2 1.2 1.4 
 27 Mineral fuels and oils  12.8 14.4 14.6 11.9 12.5 
 2701 Coal; briquettes, ovoids  and similar solid fuels 
manufactured from coal  1.3 1.5 1.4 1.2 1.7 
 2710 Petroleum oils and oils from bituminous minerals, 
not crude  2.0 2.6 3.2 2.4 1.5 
 2711 Petroleum gases and other gaseous hydrocarbons  8.6 9.3 8.5 7.0 8.4 
06 Chemicals and products thereof  7.3 7.6 7.5 7.4 8.2 
 28 Inorganic chemicals  1.2 1.2 1.1 1.2 1.3 
 29 Organic chemicals  1.9 2.0 1.9 1.6 1.9 
 30 Pharmaceutical products  0.7 0.7 0.8 0.9 1.1 
 38 Miscellaneous chemical products  1.5 1.7 1.8 1.8 2.0 
07 Plastics and rubber  6.0 5.7 6.1 6.2 6.5 
 39 Plastics and articles thereof  4.0 4.0 4.4 4.2 4.0 
 40 Rubber and articles thereof  2.0 1.7 1.8 2.0 2.4 
08 Raw hides and skins; leather, furskins and articles thereof  0.3 0.3 0.3 0.3 0.2 
09 Wood, cork, straw  0.4 0.4 0.4 0.4 0.5 
10 Pulp of wood; paper and paperboard  1.2 1.2 1.3 1.2 1.2 
11 Textiles and textile articles  1.9 1.9 1.8 1.7 1.4 
12 Footwear, headgear, etc.  0.4 0.3 0.3 0.3 0.2 
13 Articles of stone, plaster, cement  0.8 0.8 0.8 0.8 0.7 
14 Precious stones and metals  2.3 2.2 1.9 2.0 2.7 
 7108 Gold unwrought, semi -manufactured forms, or in 
powder form  1.6 1.4 1.2 1.2 1.8 
15 Base metals and articles thereof  8.4 8.6 9.0 8.8 8.6 
 72 Iron and steel  2.7 3.0 3.2 2.7 3.1 
 73 Articles of iron and steel  1.5 1.4 1.3 1.3 1.3 
 74 Copper and articles thereof  1.8 1.8 1.7 1.3 1.8 
 76 Aluminium and articles thereof  1.3 1.6 1.8 2.6 1.7 
16 Machinery, electrical equipment  39.8 38.6 37.4 39.5 39.1 
 84 Machinery and mechanical appliances, parts thereof  11.7 10.6 10.1 9.4 9.1 
 8471 Automatic data processing machines and units 
thereof (..)  1.5 1.5 1.3 1.3 1.5 
 85 Electrical machineries and parts thereof  28.1 28.0 27.2 30.1 30.0 
 8517 Telephone sets, including telephones for cellular 
networks (..)  2.1 2.1 2.0 2.1 1.8 
 8534 Printed circuits  1.0 1.0 1.1 1.3 1.3 
 8541 Diodes, transistors, similar semiconductor devices  1.9 1.7 1.5 1.7 1.8 
 8542 Electronic integrated circuits  15.9 16.0 15.6 17.5 18.0 
17 Transport equipment  5.0 5.2 4.8 4.6 3.4 
 87 Vehicles other than railway, tramway  2.8 2.9 3.2 2.4 2.5 
 8708 Parts and accessories of motor vehicles  1.2 1.2 1.3 1.1 1.1 
18 Precision equipment  3.2 2.8 3.1 3.1 2.9 
 90 Optical, photo, technical, medical, (..) apparatus  2.9 2.5 2.8 2.8 2.7 
19 Arms and ammunition  0.01 0.01 0.01 0.0 0.0 
20 Miscellaneous manufactured articles  1.0 0.9 1.0 1.1 1.0 
21 Works of art, etc.  0.01 0.01 0.02 0.04 0.016  
Other  0.38 0.40 0.50 0.58 0.56 
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table A1. 3 Merchandise exports by destination, 2017 -21 
  2017  2018  2019  2020  2021  
Total exports (USD  billion)  217.7  248.7  240.2  234.1  299.2   
(% of total exports)  
Americas  11.8 11.1 11.8 13.2 14.0 
 United  States  9.5 9.1 9.7 11.1 11.5 
 Other America  2.3 2.0 2.0 2.1 2.5 
 Mexico  1.0 0.8 0.9 0.9 0.9 
 Canada  0.4 0.4 0.4 0.4 0.5 
 Brazil  0.4 0.4 0.4 0.3 0.3 
 Costa  Rica 0.0 0.0 0.0 0.1 0.3 
Europe  12.0 11.1 10.8 10.8 10.6 
 EU-27 9.2 9.0 8.8 8.6 8.4 
 Netherlands  2.9 2.6 2.6 2.4 2.5 
 Germany  2.9 2.8 2.6 2.5 2.3 
 Italy 0.5 0.6 0.5 0.6 0.6 
 Belgium  0.5 0.5 0.5 0.5 0.5 
 France  0.6 0.6 0.6 0.5 0.5 
 Spain  0.3 0.4 0.5 0.4 0.4 
 EFTA 0.6 0.3 0.3 0.3 0.2 
 Other Europe  2.2 1.7 1.7 1.9 2.0 
 Türkiye  1.1 0.8 0.7 0.8 1.1 
 United  Kingdom  1.0 0.9 0.9 1.0 0.8 
CISa 0.4 0.4 0.5 0.4 0.4 
 Russian  Federation  0.3 0.3 0.4 0.3 0.3 
Africa  2.2 1.9 1.9 2.0 2.4 
 Kenya  0.1 0.1 0.2 0.2 0.4 
Middle East  2.7 2.3 2.2 1.9 2.1 
 United  Arab Emirates  1.3 1.1 1.1 0.9 0.9 
 Saudi  Arabia, Kingdom  of 0.5 0.4 0.4 0.4 0.4 
Asia 70.9 73.2 72.9 71.7 70.5 
 China  13.5 13.9 14.2 16.2 15.5 
 Japan  8.1 7.0 6.6 6.4 6.1 
 Other Asia  49.3 52.3 52.1 49.2 48.9 
 Singapore  14.3 14.0 13.8 14.4 14.0 
 Hong Kong,  China  5.1 7.5 6.7 6.9 6.2 
 Thailand  5.4 5.7 5.7 4.6 4.2 
 Viet Nam 3.0 3.4 3.6 3.1 3.7 
 India 3.7 3.6 3.9 3.1 3.6 
 Chinese  Taipei  2.6 3.3 3.7 3.4 3.3 
 Indonesia  3.6 3.2 3.1 3.0 3.2 
 Korea,  Republic  of 3.1 3.4 3.4 3.5 3.0 
 Australia  3.5 3.3 2.9 2.5 2.8 
 Philippines  1.8 1.7 1.9 1.8 1.8 
 Bangladesh  0.7 0.9 1.0 0.5 0.8 
 Pakistan  0.5 0.5 0.5 0.5 0.5 
 Brunei  Darussalam  0.2 0.2 0.2 0.3 0.5 
 New Zealand  0.5 0.5 0.5 0.4 0.4 
Other  0.01 0.01 0.01 0.01 0.01 
Memorandum:       
EU-28 10.2 9.8 9.7 9.6 9.2 
ASEAN  28.9 28.6 28.8 27.7 27.7 
a Commonwealth of Independent States, including certain associate and former member States.  
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table A1. 4 Merchandise imports by origin, 2017 -21 
  2017  2018  2019  2020  2021  
Total imports (USD  billion)  194.7  218.0  205.0  190.4  238.2   
(% of total imports)  
Americas  10.5 9.8 10.7 11.6 10.4 
 United  States  7.8 7.4 8.1 8.7 7.6 
 Other America  2.7 2.4 2.6 2.9 2.8 
 Brazil  1.1 0.9 0.9 1.1 1.2 
 Argentina  0.6 0.5 0.5 0.6 0.7 
 Canada  0.4 0.4 0.4 0.4 0.4 
 Mexico  0.2 0.2 0.2 0.2 0.2 
Europe  11.5 11.2 10.5 9.5 9.7 
 EU-27 8.8 8.8 8.4 7.4 7.8 
 Germany  3.1 3.0 3.2 2.9 2.6 
 Ireland  0.4 0.5 0.5 0.3 1.3 
 Italy 0.9 0.8 0.8 0.8 0.8 
 France  1.5 1.9 1.3 0.8 0.7 
 Netherlands  0.9 0.8 0.7 0.5 0.5 
 Belgium  0.3 0.3 0.4 0.4 0.4 
 Austria  0.3 0.3 0.3 0.2 0.3 
 EFTA 1.7 1.3 0.9 0.9 0.9 
 Switzerland  1.4 1.2 0.8 0.8 0.8 
 Other Europe  1.1 1.1 1.2 1.2 1.1 
 United  Kingdom  0.8 0.8 0.9 0.8 0.7 
 Türkiye  0.2 0.2 0.2 0.3 0.3 
CISa 0.5 0.6 0.6 0.5 0.5 
 Russian  Federation  0.4 0.5 0.5 0.4 0.5 
Africa  1.4 1.4 1.6 1.5 1.6 
 Côte d'Ivoire  0.3 0.2 0.3 0.4 0.4 
Middle East  3.8 4.6 4.9 4.7 3.4 
 Saudi  Arabia,  Kingdom  of 1.3 2.0 2.2 2.0 1.3 
 United  Arab Emirates  1.6 1.3 1.8 1.5 1.2 
 Oman  0.2 0.3 0.2 0.3 0.3 
Asia 72.2 72.3 71.7 72.2 74.3 
 China  19.7 19.9 20.7 21.5 23.2 
 Japan  7.6 7.3 7.5 7.7 7.5 
 Other Asia  45.0 45.1 43.5 43.0 43.6 
 Singapore  11.1 11.7 10.5 9.2 9.5 
 Chinese  Taipei  6.5 7.2 6.7 7.3 7.6 
 Indonesia  4.5 4.6 4.6 4.6 5.7 
 Korea,  Republic  of 4.7 4.5 4.6 5.8 5.1 
 Thailand  5.8 5.5 5.2 4.3 4.6 
 India 3.2 3.0 2.9 3.1 2.5 
 Viet Nam 2.7 2.2 2.3 2.3 2.4 
 Australia  2.4 2.5 2.7 2.5 2.3 
 Hong Kong,  China  1.7 1.7 1.7 1.8 1.8 
 Philippines  1.1 1.0 1.1 1.1 1.0 
 New Zealand  0.4 0.4 0.4 0.4 0.3 
Other  0.1 0.1 0.04 0.1 0.02 
Memorandum:       
EU-28 9.6 9.6 9.3 8.2 8.5 
ASEAN  25.7 25.6 24.2 21.9 23.6 
a Commonwealth of Independent States, including certain associate and former member States.  
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table A2. 1 WTO notifications, 27  November  2017 to 31  August  2022  
Agreement  Requirement/content  Periodicity  WTO document and date  
(latest document if recurrent)  
Agreement on Agriculture  
Articles 10 and 
18.2 
 
 
 
 
Article  18.2 
 
 
Article  18.2 Tables ES:1 and ES:2 – 
Export subsidies  
 
 
 
 
Tables DS:1 and DS:2 – 
Domestic support  
 
Table  MA:2 – imports under 
tariff quotas  Annual  
 
 
 
 
 
Annual  
 
 
Annual  G/AG/N/MYS/52, 27/06/2022 and Add.1, 
21/07/2022 
G/AG/N/MYS/49, 50, and 51, 28/09/2021  
G/AG/N/MYS/46, 47, and 48, 28/09/2021  
G/AG/N/MYS/41, 17/01/2018  
G/AG/N/MYS/40, 16/01/2018  
G/AG/N/MYS/53, 08/08/2022  
G/AG/N/MYS/43, 44, and 45, 21/12/2018  
 
G/AG/N/MYS/42, 17/01/2018  
Enabling clause – integration  
Enabling clause  Transparency mechanism for 
Regional Trade Agreements, 
paragraph  14 – Protocol 
amending the Framework 
Agreement on 
Comprehensive Economic 
Co-operation and certain 
Agreements thereunder 
between ASEAN and China  Ad hoc  WT/COMTD/N/20/Add.2  
S/C/N/463/Add.1, 09/0 2/2022  
Enabling clause  
 
 
 
 
Enabling clause  Regional Trade Agreement: 
ASEAN and Korea,  Rep. of; 
re-circulation of 
documentation   
 
 
 
 
Ad hoc  WT/COMTD/RTA13/N/1, 14/01/2020  
 
 
 
 
WT/COMTD/RTA21/N/1 and Add.1, 
20/09/2021  ASEAN Trade in Goods 
Agreement (ATIGA)  
GATS  
Article  V:7(a)  Regional trade agreements  Ad hoc  S/C/N/1043, 11/02/2021  
S/C/N/920, 20/12/2018  
Agreement on Implementation of Article  VI of the GATT  1994 (Anti -dumping)  
Article  16.4 Semi-annual reports of 
anti-dumping actions (taken 
within the preceding 
six months)  Semi-annual  G/ADP/N/370/MYS, 26/08/2022  
G/ADP/N/364/MYS, 25/02/2022  
G/ADP/N/357/MYS, 07/10/2021  
G/ADP/N/350/MYS, 06/04/2021  
and Corr.1, 06/10/2021  
G/ADP/N/342/MYS, 28/09/2020  
G/ADP/N/335/MYS, 27/03/2020  
G/ADP /N/328/MYS, 21/10/2019  
G/ADP/N/322/MYS, 04/02/2019  
G/ADP/N/314/MYS, 16/10/2018  
G/ADP/N/308/MYS, 26/03/2018  
Article  16.5 Competent authority   G/ADP/N/14/Add.55, 20/10/2021  
Agreement Implementation of Article  XXIV:7(a) of the GATT  1994 (Free trade areas)  
Article  XXIV of the 
GATT  1994 
(goods)  ASEAN Trade in Goods 
Agreement (ATIGA)  
 
Free trade agreement 
between ASEAN and 
Hong Kong,  China  (AHKFTA)  
Comprehensive and 
Progressive Agreement for 
Trans -Pacific Partnership 
(CPTPP)  Ad hoc  
 
 
Ad hoc  
 
 
Ad hoc  WT/REG457/N/1 and Add.1, 21/09/2021  
 
 
WT/REG448/N/1, 11/02/2021  
 
 
WT/REG395/N/1, 20/12/2018  Article  XXIV of the 
GATT  1994 
(goods)  
Article  XXIV of the 
GATT  1994 
(goods)  
Agreement on Rules of Origin  
Paragraph  4 of 
Annex  II Preferential rules of origin 
under the ATIGA  Ad hoc  
 
Ad hoc  G/RO/N/229, 16/11/2021  
 
Paragraph  4 of 
Annex  II 
 
 
Paragraph  4 of 
Annex  II Preferential rules of origin 
under the FTA between 
ASEAN and 
Hong Kong,  China (AHKFTA)  G/RO/N/221, 29/04/2021  
 
 
 
G/RO/N/183, 15/04/2019  Preferential rules of origin 
under Comprehensive and 
Progressive Agreement for 
Trans -Pacific Partnership 
(CPTPP)  Ad hoc  
Understanding on the Interpretation of Article  XVII of the GATT  1994 (State trading)  
Article  XVII:4(a)  State  trading activities  Annual  G/STR/N/17/MYS – G/STR/N/18/MYS, 
15/10/2021  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 131 - 
 
  Agreement  Requirement/content  Periodicity  WTO document and date  
(latest document if recurrent)  
Agreement on Import Licensing Procedures  
Article  7.3 Replies to questionnaire on 
import licensing procedures  Annual  G/LIC/N/3/MYS/15, 28/01/2021  
G/LIC/N/3/MYS/14, 08/04/2020 and Corr.1, 
24/04/2020  
G/LIC/N/3/MYS/13, 19/03/2018  
Decision on Notification Procedures for Quantitative Restrictions  
G/L/59/Rev.1  Notification of QRs  Biannual  G/MA/QR/N/MYS/1, 06/10/2020  
and Add.1, 23/09/2021  
Agreement on Safeguards  
Article  12.1(a)  Initiation of investigations  Ad hoc  G/SG/N/6/MYS/6, 23/09/2020  
Decision of the 
Committee on 
Safeguards  Termination  Ad hoc  G/SG/N/9/MYS/3, 15/01/2021  
Agreement on the Application of Sanitary and Phytosanitary Measures  
Article  7, Annex  B Laws, regulations and 
emergency measures  Ad hoc  G/SPS/N/MYS/50, 51, 52, and 53, 11/08/2021  
G/SPS/N/MYS/49, 22/03/2021  
G/SPS/N/MYS/48, 25/01/2021  
G/SPS/N/MYS/47, 04/09/2020  
G/SPS/N/MYS/44, 45, and 46, 31/03/2020  
G/SPS/N/MYS/43, 17/12/2018  
G/SPS/N/MYS/42, 19/07/2018  
G/SPS/N/MYS/41, 01/02/2018  
Agreement on Subsidies and Countervailing Measures  
Article  25.1 and 
Article  XVI:1 of 
the GATT  1994 Subsidies  Full notification 
every three  years; 
annual updating  G/SCM/N/372/MYS, 30/06/2021  
G/SCM/N/343/MYS, 03/07/2020  
Article  25.11  Countervailing duty actions  Semi-annual  G/SCM/N/371/Add.1, 15/04/2021  
G/SCM/N/363/Add.1, 14/10/2020  
G/SCM/N/356/Add.1, 04/05/2020  
G/SCM/N/349/Add.1, 15/11/2019  
G/SCM/N/342/Add. 1, 24/04/2019  
G/SCM/N/334/Add.1, 19/10/2018  
G/SCM/N/328/Add.1, 20/04/2018  
Article  25.12  Competent authority  Ad hoc  G/SCM/N/18/Add.55, 20/10/2021  
Agreement on Technical Barriers to Trade  
Article  2.10 Notification of technical 
regulations  Ad hoc  G/TBT/N/MYS/93, 02/07/2019  
G/TBT/N/MYS/92, 02/07/2019  
Article  2.9 Technical regulations  Ad hoc  [28] notifications (series G/TBT/N/MYS/ or see 
https://eping.wto.org/ )  
Articles  2.9 
and 5.6 
 
Article  5.6 Technical regulations and 
conformity assessment 
procedures  Ad hoc  
 
 
Ad hoc  G/TBT/N/MYS/107, 110, 111, 112, and 113, 
06/01/2022  
G/TBT/N/MYS/102 and 103, 15/06/2020  
Conformity assessment 
procedures  G/TBT/N/MYS/90, 11/06/2019  
Agreement on Implementation of Article  VII of the GATT  1994 (Customs valuation)  
Decisions of the 
Customs 
Valuation 
Committee  Valuation of carrier media 
bearing software  
Treatment of interest 
charges  Ad hoc  G/VAL/N/3/MYS/2, 18/01/2018  
 
G/VAL/N/3/MYS/1, 18/01/2018  
Agreement on Trade Facilitation  
Articles  1.4, 
10.4.3, 10.6.2 , 
and 12.2.2  Transparency obligations  
 
 
Notification of category 
commitments  Ad hoc  
 
 
Ad hoc  G/TFA/N/MYS/2, 14/10/2020  
 
 
G/TFA/N/MYS/1/Add.2, 09/08/2021  
G/TFA /N/MYS/1/Add.1, 03/07/2019  
G/TFA/N/MYS/1, 27/11/2017  Articles  7.8, 11.9, 
and 16  
Source:  WTO Secretariat.  
 
 
 WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table A3. 1 Malaysia's MFN tariff summary, 2022  
 
Number of 
linesa Range 
(%) Average 
(%) CVb Duty 
free 
(%) 
Total  11,435  (27) 0-452.8  7.6 1.8 57.4 
HS 01 -24 1,826 (27)  0-452.8  5.5 4.0 72.7 
HS 25 -97 9,609  0-60 7.9 1.4 54.5 
By WTO category       
WTO agricultural products  1,441 (27)  0-452.8  7.0 3.6 66.6 
 Animals and products thereof  161 0-50 3.8 2.8 85.7 
 Dairy products  47 0-50 3.6 3.4 85.1 
 Fruit, vegetables, and plants  374 0-110.8  3.9 3.1 75.7 
 Coffee and tea  48 0-15 5.0 1.1 47.9 
 Cereals and preparations  205 0-50 8.1 1.6 55.6 
 Oils seeds, fats, oil and their products  237 0-20 2.5 1.3 56.1 
 Sugars and confectionery  33 0-15 2.9 2.0 78.8 
 Beverages, spirits and tobacco  135 (27)  0-452.8  44.9 1.6 12.6 
 Cotton  5 0 0.0 0.0 100.0  
 Other agricultural products, n.e.s.  196 0-25 0.7 4.7 92.3 
WTO non -agricultural products  9,994  0-60 7.6 1.4 56.1 
 Fish and fishery products  467 0-20 0.6 3.7 92.1 
 Minerals and metals  1,600  0-60 9.0 1.2 39.2 
 Chemicals and photographic supplies  1,624  0-50 4.0 2.0 75.9 
 Wood, pulp, paper and furniture  615 0-35 9.5 1.1 46.3 
 Textiles  864 0-30 9.2 0.8 33.2 
 Clothing  352 0-20 0.1 11.9 99.1 
 Leather, rubber, footwear and travel goods  339 0-40 11.6 1.2 46.0 
 Non-electric machinery  1,336  0-35 4.9 1.9 67.4 
 Electric machinery  790 0-30 4.9 1.7 67.6 
 Transport equipment  1,174  0-50 19.0 0.7 21.3 
 Non-agricultural products, n.e.s.  788 0-50 5.8 1.7 65.1 
 Petroleum  45 0-5 0.3 3.7 93.3 
By ISIC Rev.2 sector       
 ISIC 1 – Agriculture, hunting and fishing  717 0-452.8  4.3 5.1 83.7 
 ISIC 2 – Mining  121 0-30 1.0 3.8 89.3 
 ISIC 3 – Manufacturing  10,596 (27)  0-321.8  7.9 1.6 55.3 
Manufacturing excluding food processing  9,407  0-60 8.1 1.4 53.7 
 ISIC 4 – Electrical energy  1 0 0.0 0.0 100.0  
By stage of processing       
 First stage of processing  1,179  0-452.8  3.5 5.1 85.8 
 Semi-processed products  3,017  0-50 6.3 1.3 55.2 
 Fully processed products  7,239 (27)  0-321.8  8.7 1.6 53.7 
By HS section       
 01  Live animals and products  624 0-50 2.1 4.2 90.7 
 02  Vegetable products  513 0-110.8  3.8 3.1 79.3 
 03  Fats and oils  187 0-20 3.0 1.1 48.7 
 04  Prepared food, beverages and tobacco  502 (27)  0-452.8  13.0 3.0 52.6 
 05  Mineral products  219 0-50 1.5 3.7 88.1 
 06  Chemicals and products thereof  1,353  0-50 2.0 3.2 86.9 
 07  Plastics, rubber, and articles thereof  600 0-40 13.7 0.8 27.5 
 08  Raw hides and skins, leather, and its products  92 0-10 0.3 5.4 96.7 
 09  Wood and articles of wood  267 0-35 9.7 1.1 49.1 
 10  Pulp of wood, paper and paperboard  310 0-25 11.1 0.8 33.2 
 11  Textiles and textile articles  1,180  0-30 6.2 1.2 53.7 
 12  Footwear, headgear, etc.  92 0-30 5.1 1.7 68.5 
 13  Articles of stone, plaster, cement  266 0-60 17.6 0.8 25.6 
 14  Precious stones and metals, pearls  80 0-10 0.7 3.2 90.0 
 15  Base metals and articles thereof  1,073  0-30 9.1 0.9 29.1 
 16  Machinery, electrical equipment, etc.  2,212  0-35 4.7 1.9 69.3 
 17  Transport equipment  1,188  0-50 18.9 0.7 21.7 
 18  Precision equipment  313 0-35 0.4 7.2 96.8 
 19  Arms and ammunition  32 0-30 14.4 0.9 15.6 
 20  Miscellaneous manufactured articles  313 0-50 10.8 1.1 37.7 
 21  Works of art, etc.  19 0-5 1.1 1.9 78.9 
a Number in brackets refer s to tariff lines with a specific rate that have been excluded from the 
calculations due to missing AVEs.  
b Coefficient of variation.  
Note:  Calculations exclude in -quota rates, but include AVEs, as available, for non -ad valorem  rates. If not 
available, the ad valorem  part is used for compound and alternate rates.  
Source:  WTO Secretariat calculations, based on data provided  by the authorities.   WT/TPR/S/436 /Rev.1  • Malaysia  
 
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  Table A3. 2 Excise duties  
Tariff code  Description  Excise duty rate  
2009  Fruit or nut juices and vegetable juices   
2009110000; 2009120000; 2009190000; 
2009210000; 2009290000; 2009310000; 
2009390000; 2009410000; 2009490000;  
2009500000; 2009610000; 2009690000;  
2009710000; 2009790000; 2009811000;  
2009819000; 2009891000; 2009892000;  
2009893000; 2009894000; 2009899100;  
2009899900; 2009901000; 2009909100;  
2009909900  - - Grapefruit juice; pomelo juice  
- - Juice of any other single citrus fruit  
- - Pineapple juice  
- - Tomato juice  
- - Grape juice (including grape must)  
- - Apple juice  
- - Juice of any other single fruit, nut or vegetable  MYR 0.40 per litre  
2202  Waters, including mineral waters and aerated 
waters, containing added sugar or other 
sweetening matter or flavoured, and other 
non-alcoholic beverages, not including fruit, 
nut or vegetable juices of heading 20.09   
2202102000; 2202103000; 2202109000  - Waters, including mineral waters and aerated 
waters, containing added sugar or other sweetening 
matter or flavoured  MYR 0.40 per litre  
2202910000  - - Non-alcoholic beer  MYR 0.40 per litre  
2202991000  - - Flavoured UHT milk based drinks  MYR 0.40 per litre  
2202992000  - - Soya milk drinks  MYR 0.40 per litre  
2202993000  - - Coconut water based drinks  MYR 0.40 per litre  
2202994000  - - Coffee based drinks or coffee flavoured drinks  MYR 0.40 per litre  
2202995000  - - Other non -aerated beverages ready for 
immediate consumption without dilution  MYR 0.40 per litre  
2202999000  - - Other  MYR 0.40 per litre  
2203  Beer made from malt   
2203001100; 2203001900; 2203009100;  
2203009900  - Stout and porter  
- Other, including ale  MYR 175.00a 
2204  Wine of fresh grapes, including fortified wines; 
grape must other than that of heading 20.09   
2204100000  - Sparkling wine  MYR 450.00a 
2204211100; 2204211300; 2204211400;  
2204212100; 2204212200; 2204221100;  
2204221200; 2204221300; 2204222200;  
2204291100; 2204291200; 2204292100;  
2204292200;  - Other wine; grape must with fermentation 
prevented or arrested by the addition of alcohol  MYR 150.00a 
2204301000; 2204302 000; - Other grape must   
2205  Vermouth and other wine of fresh grapes 
flavoured with plants or aromatic substances   
2205101000; 2205102000; 2205901000;  
2205902000  - - In containers holding 2l or less  
- - Other  MYR 150.00a 
2206  Other fermented beverages   
2206001000  - Cider and perry  MYR 60.00a 
2206002000  - Saké MYR 60.00a 
2206003100; 2206003900  - Coconut palm toddy  MYR 40.00a 
2206004100; 2206004900  - Shandy  MYR 60.00a 
2206005000  - Mead  MYR 40.00a 
2206006000  - Wines obtained by the fermentation of vegetables 
juices or of fruit juices, other than juice of fresh 
grapes  MYR 60.00a 
2206009100  - - Other rice wine (including medicated rice wine)  MYR 60.00a 
2206009900  - - Other  MYR 40.00a 
2207  Undenatured ethyl alcohol of an alcoholic 
strength by volume of 80% vol. or higher; 
ethyl alcohol and other spirits, denatured, of 
any strength   
2207100000  - Undenatured ethyl alcohol of an alcoholic strength 
by volume of 80% vol. or higher  MYR 22.50a 
and 15% 
2207201100; 2207201900; 2207209000  - Ethyl alcohol and other spirits, denatured, of any 
strength  MYR 1.10 and 
15% 
2208  Undenatured ethyl alcohol of an alcoholic 
strength by volume of less than 80% vol.; 
spirits, liqueurs and other spirituous beverages   
 
- Spirits obtained by distilling grape wine or grape 
marc:   
2208205000  - - Brandy  MYR 150.00a 
2208209000  - - Other  MYR 150.00a 
2208301000; 2208309000  - - Whiskies  MYR 150.00a 
2208400000  - Rum and other spirits obtained by distilling 
fermented sugarcane products  MYR 150.00a 
2208500000  - Gin and Geneva  MYR 150.00a 
2208600000  - Vodka  MYR 150.00a 
2208701000; 2208709000  - Liqueurs and cordials  MYR 60.00a 
2208901000  - - Medicated samsu  of an alcoholic strength by 
volume not exceeding 40% vol.  MYR 60.00a WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 134 - 
 
  Tariff code  Description  Excise duty rate  
2208902000  - - Medicated samsu of an alcoholic strength by 
volume exceeding 40% vol.  MYR 60.00a 
2208903000  - - Other samsu  of an alcoholic strength by volume 
not exceeding 40% vol.  MYR 60.00a 
2208904000  - - Other samsu of an alcoholic strength by volume 
exceeding 40% vol.  MYR 60.00a 
2208905000  - - Arrack or pineapple spirit of an alcoholic strength 
by volume not exceeding 40% vol.  MYR 60.00a 
2208906000  - - Arrack or pineapple spirit of an alcoholic strength 
by volume exceeding 40% vol.  MYR 60.00a  
2208907000  - - Bitters and similar beverages of an alcoholic 
strength not exceeding 57% vol.  MYR 40.00a 
2208908000  - - Bitters and similar beverages of an alcoholic 
strength exceeding 57% vol.  MYR 40.00a 
2208909100  - - Other: Of an alcoholic strength by volume not 
exceeding 1.14% vol.  MYR 60.00a 
2208909900  - - Other: other  MYR 60.00a 
2402  Cigars, cheroots, cigarillos and cigarettes, of 
tobacco or of tobacco substitutes   
2402100000  - Cigars, cheroots and cigarillos, containing tobacco  MYR 400.00   
- Cigarettes containing tobacco   
2402201000  - - Beedies  MYR 7.50 and 5%  
2402202000  - - Clove cigarettes  MYR 0.40 per stk  
2402209000  - - Other  MYR 0.40 per stk  
2402901000  - - Cigars, cheroots and cigarillos of tobacco 
substitutes  MYR 400.00  
2402902000  - - Cigarettes of tobacco substitutes  MYR 0.40 per stk  
2403  Other manufactured tobacco and manufactured 
tobacco substitutes; "homogenized" or 
"reconstituted" tobacco; tobacco extracts and 
essences   
 
- Smoking tobacco, whether or not containing 
tobacco substitutes in any proportion:   
 
- - Water pipe tobacco specified in Subheading 
Note 1 to this Chapter:   
2403111000  - - - Packed for retail sale  MYR 27.00 and 
5% 
2403119000  - - - Other  MYR 15.00 and 
5%  
- - Other:   
 
- - - Packed for retail sale:   
2403191100  - - - - Ang Hoon  MYR 27.00 and 
5% 
2403191900  - - - - Other  MYR 27.00 and 
5% 
2403192000  - - - Other manufactured tobacco for the 
manufacture of cigarettes  MYR 15.00 and 
5%  
- - - Other   
2403199100  - - - - Ang Hoon  MYR 15.00 and 
5% 
2403199900  - - - - Other  MYR 15.00 and 
5% 
240391  - - Homogenized or "reconstituted" tobacco:   
2403911000  - - - Packed for retail sale  MYR 27.00 and 
5% 
240399  - - Other:   
2403994000  - - Snuff, whether or not dry  MYR 27.00 and 
5% 
2404  Products containing tobacco, reconstituted 
tobacco, nicotine, or tobacco or nicotine 
substitutes, intended for inhalation without 
combustion; other nicotine containing products 
intended for the intake of nicotine into the 
human body   
 - Products intended for inhalation without 
combustion:   
2404110000  - - Containing tobacco or reconstitut ed tobacco  MYR 778.00 per 
kg of tobacco 
content  
3824  Prepared binders for foundry moulds or cores; 
chemical products and preparations of the 
chemical or allied industries (including those 
consisting of mixtures of natural products), not 
elsewhere specified or included   
3824999910  - - - - Preparation of a kind used for smoking 
through electronic cigarette and electric vaporizing 
device, in form of liquid or gel  MYR 0.40 per litre  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 135 - 
 
  Tariff code  Description  Excise duty rate  
8543  Electrical machines and apparatus, having 
individual functions, not specified or included 
elsewhere in this Chapter   
8543400000  - Electronic cigarettes and similar personal electric 
vaporizing devices  10% 
8703 (various – 241 tariff lines)  Motor cars and other motor vehicles principally 
designed for the transport of persons, 
including station wagons and racing cars   
By type of engine:    
 
Of a cylinder capacity:  
- not exceeding 1,000cc  
- exceeding 1,000cc but not exceeding 1,500cc  
- not exceeding 1,000cc  
- exceeding 1,000cc but not exceeding 1,500cc  60% 
 
Of a cylinder capacity:  
- exceeding 1,500cc but not exceeding 1,800cc  
- not exceeding 1,000cc  
- exceeding 1,000cc  
- exceeding 1,000cc but not exceeding 1,500cc  65% 
 
Of a cylinder capacity:  
- exceeding 1,000cc but not exceeding 1,500cc  
- exceeding 1,500cc but not exceeding 1,800cc  
- exceeding 1,800cc but not exceeding 2,000cc  
- not exceeding 1,000cc  75% 
 
Of a cylinder capacity exceeding 1,800cc but not 
exceeding 2,000cc  80% 
 
Of a cylinder capacity:  
- exceeding 1,500cc but not exceeding 2,500cc  
- exceeding 1,500cc but not exceeding 3,000cc  
- exceeding 1,800cc but not exceeding 2,500cc  
- exceeding 1,800cc but not exceeding 3,000cc  
- exceeding 2,000cc  
- exceeding 2,000cc but not exceeding 2,500cc  90% 
 
Of a cylinder capacity:  
- exceeding 2,500cc  
- exceeding 3,000cc  
- exceeding 2,500cc but not exceeding 3,000cc  105%  
8703809200; 8703809400; 8703809500; 
8703809700; 8703809800; 8703809900  - - - Other vehicles, with only electric motor for 
propulsion  10% 
8703909200  - - - All-Terrain Vehicles (ATV)  65% 
8703909400  - - - Hearses  65% 
8703909500  - - - Prison vans  65% 
8703909700  - - - Sedan  60% 
8703909800  - - - Other motor cars (including station wagons and 
sports cars, but not including vans)  60% 
8703909900  - - - Other  65% 
8711  Motorcycles (including mopeds) and cycles 
fitted with an auxiliary motor, with or without 
side-cars; side -cars  
871110  - Motorcycles (including mopeds) and cycles fitted 
with an auxiliary motor, with or without side -cars; 
side-cars  
8711109200  - - - Mopeds or motorized bicycles  20% 
8711109400  - - - Powered kick scooters; pocket motorcycles  20% 
8711109500  - - - Other motorcycles and motor scooters  20% 
8711109900  - - - Other  20% 
871120  - With internal combustion piston engine of a 
cylinder capacity exceeding 50cc but not exceeding 
250cc:   
8711209200  - - - Mopeds or motorized bicycles  20% 
8711209300  - - - Pocket motorcycles  20%  
- - - Other motorcycles (with or without side -cars), 
including motor scooters:   
8711209400  - - - - Of a cylinder capacity exceeding 150cc but not 
exceeding 200cc  30% 
8711209500  - - - - Of a cylinder capacity exceeding 200cc but not 
exceeding 250cc  30% 
8711209600  - - - - Other  20% 
8711209900  - - - - Other  20% 
871130  - With internal combustion piston engine of a 
cylinder capacity exceeding 250cc but not exceeding 
500cc   
8711209900  - - Other  30% 
871140  - With internal combustion piston engine of a 
cylinder capacity exceeding 500cc but not exceeding 
800cc:   
8711409000  - - Other  30% WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 136 - 
 
  Tariff code  Description  Excise duty rate  
871150  - With internal combustion piston engine of a 
cylinder capacity exceeding 800cc:   
8711509000  - - Other  30% 
871160  -With electric motor for propulsion:   
8711609200  - - - Kick scooters; self -balancing cycle; pocket 
motorcycles  10% 
8711609300  - - - Other motorcycles  10% 
8711609400  - - - Bicycles, with an auxiliary electric motor not 
exceeding 250  W and with the maximum speed not 
exceeding 25  km/h 10% 
8711609500  - - - Other bicycles  10% 
8711609900  - - - Other  30% 
8711909000  - - - Other  30% 
9504  Video game consoles and machines, table or 
parlour games, including pintables, billiards, 
special tables for casino games and automatic 
bowling equipment, amusement machines 
operated by coins, banknotes, bank cards, 
tokens or by any other means of payment   
9504400000  - Playing cards  10%  
- - Gambling equipment and paraphernalia:   
9504903400  - - - Mahjong tiles, of wood or of paper or of plastics  10% 
9504903500  - - - Other Mahjong tiles  5% 
9614  Smoking pipes (including pipe bowls) and cigar 
or cigarette holders, and parts thereof   
9614009010  - - Smoking pipes (including pipe bowls)  10% 
a Unit: per 100% vol. per litre.  
Source:  Federal Government Gazette, Excise Duties Order  2022, P.U.(A)  163, 23 May 2022.  
 
 
 
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 137 - 
 
  Table A3. 3 Import prohibitions and licensing (Second Schedule)  
Item 
no. Description of goods  Ministry/department/statutory body 
issuing licence  
Part I Goods which are prohibited to be imported into Malaysia except under an import licence  
1 (1) Acetyl bromide (2) Acetyl chloride  MOH 
2 (1) Logs; wood in the rough, whether or not stripped of its 
bark or merely roughed down, wood roughly squared or 
half – squared but not further manufactured; and baulks;  
(2) Poles and piles, of Bakau (Rhizophora spp.);  
(3) Plywood, veneered panels and similar laminated wood; 
(4) Sawn Timber;  
(5) Particleboard/Chipboard;  
(6) Fibreboard.   For importation into Peninsular Malaysia 
and Labu an: Malaysian Timber Industry 
Board and Department of Agriculture 
Forestry Department of Sabah  
 
For importation into Sabah and Sarawak: 
Department of Agriculture of Sabah and 
Sarawak Timber Industry Development 
Corporation (STIDC)  
3 Motor vehicles for the transport of: (1) 10 or more persons, 
including the driver; (2) less than 10 persons (excluding 
go-karts, ambulances, golf cars and golf buggies, all -terrain 
vehicles (ATV) and motorhomes); and (3) goods.  MITI 
4 (1) Nicotine and its salt;  
(2) Essentia l oils containing nicotine;  
(3) Preparations containing nicotine, in the form of tablets 
and chewing gum intended to assist smokers to stop 
smoking;  
(4) Preparations containing nicotine, in the form of patches 
(transdermal systems) intended to assist smokers to stop 
smoking;  
(5) Mixture and preparation whether or not containing 
tobacco extract or essence, nicotine, aromatic oil, flavouring 
etc. of a kind use for vaporizer smoking;  
(6) Phosphorus;  
(7) Hypophosphoric acid (diphosphoric IV acid (H₄P₂O₆));  
(8) Hypophosphorous acid.  MOH 
5 (1) Rice (including glutinous rice); (2) Rice flour (including 
glutinous rice flour), rice bran, cereal groat, meal and 
pellets of rice, rice vermicelli (beehon), transparent 
vermicelli (suun), noodles and uncooked rice co mmercially 
packed in sachet or pouch known as ketupat.  Director General of the Control of Paddy 
and Rice (except transparent vermicelli 
(suun))  
6 Arsenic trichloride.  MOH 
7 Bars and rods, hot -rolled, in irregularly wound coils, of other 
alloys steels.  MITI 
8 Caffeine and its salts.  MOH 
9 Chemicals/substances covered under the 1988 United 
Nations Convention Against Illicit Traffic In Narcotic Drugs 
and Psychotropic Substances.  MOH 
10 Medicine making machine.  MOH 
11 Mercury (Hg) and mercury compounds covered under 
Minamata Convention on Mercury.  MOH 
12 Used rice machinery for milling, grading, sorting, cleaning 
and parts thereof.  Director General of the Control of Paddy 
and Rice  
13 Ships' derricks; cranes, including cable cranes; mobile lifting 
frames, straddle carriers and works trucks fitted with a 
crane (excluding palfinger fully hydraulic compac, hydraulic 
loading cranes, gantry cranes and crawler cranes).  MITI 
14 Waste, parings  and scrap of plastics.  Department of National Solid Waste 
Management  
15 Preparation of kind used in animal feeding containing 
polymyxin including polymyxin  B and polymyxin  E (colistin).  
Organic compounds of polymyxin including polymyxin  B and 
polymyxin  E (colistin).  
Medicaments containing polymyxin  B and polymyxin  E 
(colistin).  MOH 
Part II Conditional prohibition except under import licence and does not apply to specified free zones  
1 All goods from Israel.  MITI 
2 Sugar (including cane and beet sugar, chemically pure 
sucrose, fructose and glucose).  Ministry of Domestic Trade  and Consumer  
Affairs  
3 (1) Radar apparatus, radio navigational aid apparatus, 
including other parts and accessories; and  
(2) Parabolic antenna including other parts  and accessories.  SIRIM Berhad  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 138 - 
 
  Item 
no. Description of goods  Ministry/department/statutory body 
issuing licence  
4 Chassis fitted with engines, for the motor vehicles of 
heading 87.02, 87.03, 87.04 or 87.05.  MITI 
5 Chassis, not fitted with engines, for the motor vehicles of 
heading 87.02, 87.03, 87.04 or 87.05.  MITI 
6 Bodies (including cabs) for the motor vehicles falling within 
headings 87.02, 87.03, 87.04 or 87.05.  MITI 
7 Motorcycles, auto -cycles (including mopeds), electric 
powered motorcycles, motorized bicycles and cycles fitted 
with an auxiliary motor (excluding side -cars). MITI 
8 Road tractors for semi -trailers (including prime movers), 
completely built -up, old.  MITI 
9 Special purpose motor vehicles, other than those principally 
designed for the transport of persons or goods (for example 
breakdown lorries, crane lorries, concrete -mixer lorries, 
road sweeper lorries, spraying lorries, mobile workshops, 
mobile radiological units) excluding fire fighting vehicles.  MITI 
10b (1) Used brakes and servo -brakes including used brake pad, 
and brake lining, for motor vehicle s of headings 87.01, 
87.02, 87.03, 87.04, 87.05, 87.09 and 87.11;  
(2) All kinds of reusable batteries (accumulators) for motor 
vehicles of headings 87.01, 87.02, 87.03, 87.04, 87.05, 
87.09 and 87.11.  MITI 
11 Unmanufactured tobacco; tobacco refuse.  Nationa l Kenaf, Tobacco Board and 
Department of Agriculture (Peninsular 
Malaysia, Labuan, Sabah & Sarawak)  
12 1, 1, 1, - Trichloroethane (methyl chloroform).  MITI 
13 Optical disc mastering and replicating machines and parts 
thereof.  Ministry of Domestic Trade  and Consumer 
Affairs  
14b Toxic chemicals and their precursors covered under the 
Convention on the Prohibition of the Development, 
Production, Stockpiling and Use of Chemical Weapons and 
on Their Destruction 1993 (CWC).  MITI 
15 Substances structurally derived from Phenethylamine and 
their salts.  MOH 
16 Hydrochlorofluorocarbons gas (HCFCs) covered under 
Montreal Protocol, Annex  C – Group  1. DOE 
17 Flat-rolled products of other alloy steel, of a width of 
600 mm or more.  MITI 
18 Substances covered under Montreal Protocol.  DOE 
19 Hydrochlorofluorocarbons gas (HCFCs) covered under 
Montreal Protocol.  DOE 
20 Containing perfluorocarbons (PFCs) or hydrofluorocarbons 
(HFCs) but not containing chlorofluorocarbons (CFCs) or 
hydrochlorofluorocarbons (HCFCs).  DOE 
Part III Conditional prohibition except under import licence and shall not apply to Labuan, Langkawi, 
Tioman, Pangkor and specified free zonesc 
1 (1) Bars and rods, hot -rolled, in wound coil, of stainless or 
heat resisting steel, circular cross -section;  
(2) Bars and rods, hot -rolled, in straight length of stainless 
or heat resisting steel, circular cross -section.  MITI 
2 Flat-rolled products of iron or non -alloy steel, of a width of 
600 mm or more, hot-rolled, not clad, plated or coated.  MITI 
3 Flat-rolled products of iron or non -alloy steel, of a width of 
600 mm or more, cold rolled (cold -reduced), not clad, 
plated or coated.  MITI 
4 Flat-rolled products of iron or non -alloy steel, of a width of 
less than 600  mm not clad, plated or coated.  MITI 
5 Flat-rolled products of iron or non -alloy steel, of a width of 
600 mm or more, clad, plated or coated.  MITI 
6 Flat-rolled products of iron or non -alloy steel, of a width less 
than 600  mm clad, plated or coated.  MITI 
7b Kain sarong batik (by traditional batik process).  MITI 
8 Other tubes and pipes hollow profiles (for example, open 
seam or welded, riveted or similarly closed), of iron or steel.  MITI WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 139 - 
 
  Item 
no. Description of goods  Ministry/department/statutory body 
issuing licence  
9 Semi-finished products of iron and steel, including slab, 
bloom and billets.  MITI 
10 Stranded wire, cables, cordage, ropes, plaited bands and 
the like, of aluminium wire (excluding insulated electric 
wires and cables): (1)  of steel reinforced aluminium; and 
(2) of aluminium alloys or not alloyed.  MITI 
a Excluding Indonesia, absolutely prohibited ( First Schedule).  
b Items are subject to quantitative restriction (WTO document G/MA/QR/N/MYR/1, 6  October  2020).  
c Import licence requirements for 181 tariff lines of iron and steel products were  terminated effective 
from 1  August  2017 (WTO document G/LIC/N/2/MYS/8, 18  August  2017).  
Note:  MITI: Ministry of International Trade and Industry; MOH: Pharmaceutical Services Division, 
Ministry  of Health; and DOE: Department of Environment.  
Source:  Compil ed by WTO Secretariat, based on Federal Government Gazette , Customs (Prohibition of 
Imports) Order  2017 (P.U.(A)  103), 31 March  2017, and various Amendment Orders  2018 
(P.U.(A)  57), 2019 (P.U.(A)  228), 2019 (P.U.(A)  358), 2020 (P.U.(A)  70), and 2020 (P.U.(A)  231), 
23 February2018, 26  August  2019, 23  December  2019, 26  February  2020, and 17  August  2020, 
respectively.  
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 140 - 
 
  Table A3. 4 Export licensing  
Description of goods  Ministry/department/statutory body issuing licence  
All goods to Israel  Ministry of International Trade and Industry  
Unrooted cuttings, budwood, budded stumps, 
seedlings and seeds, of rubber, for sowing or 
planting  Ministry of Plantation Industries and Commodities  
Oil palm living tissues/fruits/seeds or n uts/pollens  Ministry of Plantation Industries and Commodities  
Oils and fats of palm oil  Malaysian Palm Oil Board  
Pineapple slips  Malaysian Pineapple Industries Board  
Pineapple, fresh, chilled and preserved by freezing  Malaysian Pineapple Industries Board  
Bamboo, rattans, wood, logs, charcoal, timber, etc.  Malaysian Timber Industry Board and corresponding 
agencies in Sabah and Sarawak  
Minerals, ores, coal, lignite, peat, coke, rare -earth 
metal, scandium, yttrium, cerium compounds and 
other compounds of rare -earth metals, of yttrium or 
of scandium or of mixtures of these metals, etc.  Ministry of Energy and Natural Resources  
All kinds of natural sands  Ministry of Energy and Natural Resources  
Slag and hardhead of tin  Ministry of Energy and Natural Resources  
Military clothing, headgear, footwear, and other 
textile articles  Ministry of Defence  
Ministry of International Trade and Industry  
Sugar  Ministry of Domestic Trade and Consumer  Affairs  
Cement clinker  Ministry of Domestic Trade and Consumer  Affairs   
Portland cement  Ministry of Domestic Trade and Consumer  Affairs  
Waste and scrap  Ministry of International Trade and Industry  
Recovered (waste and scrap) paper or paperboard  Ministry of International Trade and Industry  
Toxic chemica ls and their precursors covered under 
the Convention on the Prohibition of the 
Development, Production, Stockpiling and Use of 
Chemical Weapons and on Their Destruction 1993 
(CWC)  Ministry of International Trade and Industry  
Acetyl bromide  Pharmaceutical Services Division, Ministry of Health  
Acetyl chloride  Pharmaceutical Services Division, Ministry of Health  
Chemicals/substances covered under the 
1988 United Nations Convention Against Illicit Traffic 
in Narcotic Drugs and Psychotropic Substances  Pharmaceutical Services Division, Ministry of Health  
Hydrochlorofluorocarbons (HCFCs) covered under 
the Montreal Protocol, Annex  C – Group  1  Department of Environment  
Mercury (Hg) and mercury compounds covered 
under the Minamata  Convention on Mercury  Pharmaceutical Services Division, Ministry of Health  
Hydrofluorocarbons gas (HFCs) covered under 
Montreal Protocol  Department of Environment  
Containing perfluorocarbons (PFCs) or 
hydrofluorocarbons gas (HFCs) but not containing 
chlorofluorocarbons (CFCs) or 
hydrochlorofluorocarbons (HCFCs)  Department of Environment  
Source:  WTO Secretariat, based on WTO document WT/TPR/S/366/Rev.1, 25  May 2018; Federal 
Government Gazette, Customs (Prohibition of Exports) Order  2017, (P.U.(A)  102), 31 March  2017, 
and various Amendment  Orders  2020 (P.U.(A)  71) and 2021 (P.U.(A)  130), 26 Februar y 2020 and 
24 March  2021, respectively.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 141 - 
 
  Table A3. 5 Imports subject to TBT requirements  
Item No.  Description of goods  Import requirement  
Part I  Conditional prohibition except conforming to Malaysian authorities or other standards 
approved by the authorities and in the manner provided for:  
1 Cement (portland cement, 
aluminous cement, other 
hydraulic cement)  The importation accompanied by a certificate of approval (COA) or a 
letter of exemption issued by or on behalf of the Chief Executive of the 
Construction Industry Development Board (CIDB).  
2 Ceramic products  The importation accompanied by a COA or a letter of exemption issued 
by or on behalf of the Chief Executive of the CIDB.  
3 Plastic flushing cisterns 
equipped wi th mechanism 
(close couple, medium 
level, high level or 
concealed)  The importation accompanied by a COA or a letter of exemption issued 
by or on behalf of the Chief Executive of the CIDB.  
4 Recovered (waste and 
scrap) paper and paper 
boarda The importatio n accompanied by a COA by or on behalf of SIRIM Berhad 
as defined under the Guidelines for importation and inspection of waste 
paper.  
5 Waste and scrap of metala Importation accompanied by a COA by or on behalf of SIRIM Berhad as 
defined under the Guidelines for importation and inspection of metal 
scrap.  
Part II  Conditional prohibition except conforming to Malaysian authorities or other standards 
approved by the a uthorities and in the manner provided for, and does not apply the free 
commercial zones:  
1 Iron and steel products  The importation accompanied by a COA or a letter of exemption issued 
by the CIDB for the construction sector or SIRIM Berhad for non -
construction sector.  
2 Aluminium products  The importation accompanied by a COA or a letter of exemption issued 
by the CIDB  for the construction sector or SIRIM Berhad for non -
construction sector.  
3 Electrical apparatus or 
accessories  Suruhanjaya Tenaga, or the equivalent counterpart in the case of certain 
states (Sarawak), certifying that the specified domestic electrical 
apparatus conforms to the Malaysian or IEC standards, or British 
standards, or any other.  
4 Safety seatbelts  Comply to the standard under the Motor Vehicles (Safety Seatbelts) 
Rules 1978; and the importation accompanied by:  
- E-Mark and certificate issued b y the World Forum for Harmonization of 
Vehicles Regulation; or  
- MS mark and certificate issued by standards organization or certificate 
body which is recognized/approved by the Department of Standard 
Malaysia; and  
- A letter of approval issued by the Road Transport Department.  
5 New pneumatic tyres and 
new retreaded pneumatic 
tyres, of rubber  Comply to the standards as prescribed under the Motor Vehicles 
(Construction and Use) Rules 1959; imports must be accompanied by:  
- E-mark and certificate issued  by the World Forum for Harmonization of 
Vehicles Regulation; or  
- DOT mark and certificate issued by the US National Highway Traffic 
Safety Administration; or  
- MS mark and certificate issued by standards organization or certificate 
body which is recogniz ed/approved by the Department of Standard 
Malaysiab; and  
- A letter of approval issued by the Road Transport Department.b 
6 Toys, games and 
children's bicycles  Importation must be accompanied by:  
- certificate of conformance (COC)  issued under the Consumer Protection 
Act 1999;  
- notification form or a letter of clarification.  
7 Apparatus or equipment to 
be attached to or 
connected to a public 
communications network 
or system  A COA issued by SIRIM QAS International Sdn. Bhd. Import must be 
certified to the Malaysian standards, or international standards, or 
technical codes, or te chnical declarations, subject to the 
Communications and Multimedia Act  1998.  
8 Radio communications 
apparatus or equipment in 
the frequency band up to 
420 THz A COA issued by SIRIM QAS International Sdn. Bhd. Import must be 
certified to the Malaysian stan dards, or international standards, or 
technical codes, or technical declarations, subject to the 
Communications and Multimedia Act  1998.  
9 Flowers, vegetables, 
coconuts, fruits, coffee, 
spices, groundnuts, 
sugarcane  A COC of agricultural produce, issued b y MAQIS, and inspection and 
approval by MAQIS (SPS measures).  
10 Construction products  A COA or a letter of exemption by the Chief Executive Officer of the 
CIDB 
11 Non-rechargeable primary 
cells and primary batteries  A COC, a notification form, or a letter of clarification, issued by the 
Controller of Consumer Affairs, under the Consumer Protection Act  1999.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 142 - 
 
  Item No.  Description of goods  Import requirement  
12 Apparatus or equipment 
which are integrated with 
a communications module 
for connecting to a public 
communications network 
or for radio 
communications utilizing 
the frequency band up to 
420 THz A COA issued by SIRIM QAS International Sdn. Bhd. Import must be 
certified to the Malaysian standards, or international standards, or 
technical codes, or technical declarations, subject to the 
Commu nications and Multimedia Act  1998.  
13 Liquid -filled type electric 
heating bag, cushion, 
pillow, pouch or pad filled 
with liquid, using 3 -pin 
inlet alternating current 
(AC) or AC and direct 
current (AC/DC)  A COA issued by the Suruhanjaya Tenaga or the equi valent counterpart 
in Sarawak, certifying that the product conforms to the Malaysian 
standard, or IEC standard, MS  IEC 60335 -1. 
14 Motorcyclists' safety 
helmets (except as worn 
by motorcyclists or 
motorcycle pillion riders)  Comply to standard as prescribed under the Motor Vehicles 
(Construction and Use) Rules  1959, governed by the Road Transport 
Department, and the importation is accompanied by:  
- E-Mark and certificate issued by the World Forum for Harmonization of 
Vehicles Regulation; or  
- MS mark and certificate issued by standards organization or certificate 
body which is recognized/approved by the Department of Standard 
Malaysiab; and  
- A letter of approval issued by the Road Transport Department.b 
15 Some wheat flour (other 
than those  mentioned in 
Item 21) A letter of consent, by the Ministry of Domestic Trade  and Consumer  
Affairs  
16 Gas discharge headlamp 
including gas discharge 
bulb for the use of all 
types of motor vehicle  Comply to the standards under the Motor Vehicles (Construct ion and 
Use) Rules  1959; and the importation is accompanied by:  
- E-Mark and certificate issued by the World Forum for Harmonization of 
Vehicles Regulation; and  
- A letter of approval issued by the Road Transport Department.b 
17 New brake lining or brake 
pad Comply to the standards under the Motor Vehicles (Construction and 
Use) Rules 1959, and the importation is accompanied by:  
- E-Mark and certificate issued by the World Forum for Harmonization of 
Vehicles Regulation; or  
- MS mark and certificate i ssued by standards organization or certificate 
body which is recognized/approved by the Department of Standard 
Malaysiab; and  
- A letter approval issued by the Road Transport Department.b 
18 Vehicle alarm system and 
immobilizer for motor 
vehicle  Comply to  the standards under the Motor Vehicles (Construction and 
Use) Rules  1959, and the importation is accompanied by:  
- E-Mark and certificate issued by the World Forum for Harmonization of 
Vehicles Regulation; or  
- MS mark and certificate issued by standards organization or certificate 
body which is recognized/approved by the Department of Standard 
Malaysiab; and  
- A letter of approval issued by the Road Transport Department.b 
19 New seat for motor 
vehicles principally 
designed for the transport 
of persons including taxi 
and bus  Comply to the standards under the Motor Vehicles (Construction and 
Use) Rules  1959 governed by the Road Transport Department, and the 
importation is accompanied by:  
- E-Mark and certificate issued by the World Forum for Harmonization of 
Vehicles Regulation; and  
- A letter of approval issued by the Road Transport Department.b 
20 Speed limitation device for 
motor vehicles  Comply to the standards under the Motor Vehicles (Construction and 
Use) Rules  1959, and the importatio n is accompanied by:  
- E-Mark and certificate issued by the World Forum for Harmonization of 
Vehicles Regulation; and  
- A letter of approval issued by the Road Transport Department.b 
21 Wheat flour for human 
consumption  COA issued by SIRIM QAS Internation al Sdn. Bhd.  
22a Bars and rods, hot -rolled 
in irregularly wound coils 
of other alloy steel  Importation accompanied by a COA or a letter of exemption issued by or 
on behalf of the Chief Executive of SIRIM Berhad.  
23a Deformed round bar in 
various forms  Importation accompanied by a COA or a letter of exemption issued by or 
on behalf of the CIDB.  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 143 - 
 
  Item No.  Description of goods  Import requirement  
24a Child seat for motor 
vehicles  Comply to the standard under the Motor Vehicle (Safety Seat -belts) 
(Amendment) Rules 2019; and the importation accompanied by:  
- E-Mark and certificate issued by the World Forum for Harmonization of 
Vehicles Regulation; a nd 
- A letter of approval issued by the Road Transport Department.  
25a Rear view mirrors for 
motor vehicles and 
headlamp for motor 
vehicles  Comply to the standard under the Motor Vehicle (Construction and Use) 
Rules  1959; and the importation accompanied by:  
- E-Mark and certificate issued by the World Forum for Harmonization of 
Vehicles Regulation; and  
- A letter of approval issued by the Road Transport Department.  
26a Safety glass for motor 
vehicles  Comply to the standard under the Motor Veh icle (Construction and Use) 
Rules  1959; and the importation accompanied by:  
- E-Mark and certificate issued by the World Forum for Harmonization of 
Vehicles Regulation; or  
- MS marking and certificate issued by standards organization or 
certification body which is recognized/approved by the Department of 
Standard Malaysia; and  
- A letter of approval issued by the Road Transport Department.  
a New items through the amendments.  
b Modifications and new requirements through the amendments.  
Source:  Compiled by WTO Secretariat, based on WTO document WT/TPR/S/366/Rev.1, 25  May 2018; 
Federal Government Gazette, Customs (Prohibition of Imports) Order  2017, (P.U.(A)  103), 
31 March  2017, and various  Amendment Orders 2018 (P.U.(A)  223), 2022 (P.U.(A)  7), and 2022 
(P.U.(A)  8), 29 August  2018, 7  January  2022, and 7  January  2022, respectively.  
   
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 144 - Table A4. 1 Malaysia's major traded agricultural products, 2017 -21a 
(USD million, %)  
HS 
code  Product d escription  2017  2018  2019  2020  2021  Average 
value  
2017 -21 % of total 
agri-
cultural 
trade  
2017 -21 Major partners (% of total 
agricultural trade)  
Total agricultural exports  3,872.1  22,648.8  21,998.8  23,221.7  32,079.1  24,764.1  100.0  China (11.3%); EU-27 (10.2%); 
Singapore (10.1%)  
% of total exports  11.0%  9.1%  9.2%  9.9%  10.7%  10.0%    
1511 Palm oil and its fractions  9,718.5  8,676.1  8,596.6  9,775.3  14,209.3  10,195.2  41.2 India (19.5%); EU -27 (10.9%); 
China  (8.7%)  
3823 Industrial monocarboxylic fatty 
acids; acid oils from refining  2,385.8  2,208.1  1,880.6  1,816.3  3,220.8  2,302.3  9.3 EU-27 (24.1%); China (14.9%); 
Singapore (9.7%)  
1516 Animal or vegetable fats and oils 
and their fractions  1,928.0  1,656.2  1,497.7  1,639.7  2,265.1  1,797.4  7.3 China (28.1%); EU -27 (10.7%); 
Türkiye (7.7%)  
1513 Coconut (copra), palm kernel or 
babassu oil and fractions thereof  1,039.7  817.9  638.8  913.2  1,411.4  964.2  3.9 EU-27 (31.7%); China (17.8%); 
United  States  (8.4%)  
2106 Food preparations not elsewhere 
specified or included  622.6  650.7  680.8  683.4  818.9  691.3  2.8 Singapore (11.6%); Indonesia (11%); 
China (7.9%)  
1905 Bread, pastry, cakes, biscuits and 
other bakers' wares  660.7  738.2  698.0  532.9  738.6  673.7  2.7 Singapore (16.7%); China (9.1%); 
Thailand (9%)  
1901 Malt extract; food preparations of 
flour, groats, meal, starch or malt 
extract  570.6  562.5  615.9  573.8  610.5  586.6  2.4 Philippines (13.8%); Indonesia 
(7.3%); Brunei  Darussalam (6.7%)  
1804 Cocoa butter, fat and oil  379.1  390.7  613.3  598.9  604.8  517.3  2.1 USA (22.7%); Japan (16.1%); EU -27 
(15.5%)  
2101 Extracts, essences and 
concentrates, of coffee, tea or 
maté and preparations  501.2  543.8  522.9  480.0  517.9  513.1  2.1 Thailand (12.9%); China (12.8%); 
Singapore (9.1%)  
1517 Margarine; edible mixtures or 
preparations of animal or 
vegetable fats or oils  410.5  375.9  413.3  380.7  546.4  425.4  1.7 China (8%); Australia (7.9%); 
Thailand (6.6%)  
Total agricultural imports  15,280.6  16,208.0  15,624.1  16,589.4  20,712.6  16,882.9  100.0  Indonesia (15.4%); China 
(9.7%); Thailand (7.6%)  
% of total imports  7.8%  7.4%  7.6%  8.7%  8.7%  8.1%    
1801 Cocoa beans, whole or broken, raw 
or roasted  698.7  788.4  826.7  972.6  1,209.4  899.2  5.3 Côte d'Ivoire (33.4%); Ghana 
(18.7%); Ecuador (10.2%)  
1005 Maize (corn)  741.9  823.4  786.8  791.0  1,124.4  853.5  5.1 Argentina (64.3%); Brazil (30.4%); 
United  States  (2.2%)  
1701 Cane or beet sugar and chemically 
pure sucrose, in solid form  923.7  736.6  629.8  763.0  933.6  797.4  4.7 Brazil (60.1%); Thailand (15.9%); 
South  Africa (9.8%)  
2106 Food preparations not elsewhere 
specified or included  624.7  688.6  712.8  776.1  1,069.2  774.3  4.6 Singapore (28.3%); 
United  States  (19.5%); EU -27 
(12.7%)  
1511 Palm oil and its fractions  403.5  456.8  549.2  657.7  1,148.7  643.2  3.8 Indonesia (90.1%); Papua New 
Guinea (4.6%); Cambodia (1.5%)  
3823 Industrial monocarboxylic fatty 
acids; acid oils from refining  624.8  680.0  459.4  503.7  924.9  638.6  3.8 Indonesia (87.7%); China (2.7%); 
EU-27 (1.8%)    
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 145 - HS 
code  Product d escription  2017  2018  2019  2020  2021  Average 
value  
2017 -21 % of total 
agri-
cultural 
trade  
2017 -21 Major partners (% of total 
agricultural trade)  
2304 Oil-cake and other solid residues 
resulting from the extraction of 
soyabean oil  610.1  590.3  521.9  519.9  629.2  574.3  3.4 Argentina (96.4%); 
United  States  (2.1%); India (0.6%)  
1513 Coconut (copra), palm kernel or 
babassu oil and fractions thereof  535.2  490.0  343.2  453.7  775.6  519.5  3.1 Indonesia (54.6%); Thailand 
(22.8%); Philippines (12.7%)  
0402 Milk and cream  458.4  466.0  507.7  517.0  568.0  503.4  3.0 New Zealand (52.9%); EU -27 
(21.7%); United  States  (15.5%)  
0202 Meat of bovine animals, frozen  503.7  498.1  445.8  489.9  525.7  492.6  2.9 India (79.3%); Australia (11.2%); 
Brazil (4.3%)  
1006 Rice 345.8  405.7  452.6  589.1  575.5  473.7  2.8 Viet Nam (34.9%); Thailand (23.4%); 
India (21%)  
a Major products (top  3) are ranked according to averaged values 2017 -21. 
Note:  WTO definition of agriculture: HS  Chapters 01 -24 less fish and fishery products (HS  Chapters 03, 0508, 0511.91, 1504.10, 1504.20, 1603 -1605, and 2301.20), plus 
some selected pro ducts (HS  2905.43 -2905.45, 3301, 3501 -3505, 3809.10, 3823, 3824.60, 4101 -4103, 4301, 5001 -5003, 5101 -5103, 5201 -5203, and 5301 -5302).  
Source:  WTO Secretariat calculations, based on UN Comtrade database.     
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 146 - Table A4. 2 Malaysia's major traded fish and fish products, 2017 -21a 
(USD million, %)  
HS 
code  Product description  2017  2018  2019  2020  2021  Average 
value 
2017 -21 % of total 
fish and 
fishery 
trade 
2017 -21 Major partners  
(% of total fish and fishery products 
exports or imports)  
Total exports of fish and fish products  705.6  765.7  897.3  861.3  911.0  828.2  100.0  China (23.2%); Singapore (17.3%); 
Australia (7.2%)  
% of total exports  0.3%  0.3%  0.4%  0.4%  0.3%  0.3%    
0306 Crustaceans  221.3  261.5  316.7  249.3  304.3  270.6  32.7 China (26.1%); Singapore (18.1%); 
Rep. of Korea (13.8%)  
1604 Prepared or preserved fish; caviar 
and caviar substitutes prepared from 
fish eggs  119.9  125.3  143.5  143.0  156.8  137.7  16.6 Singapore (27.3%); Australia (15%);  
EU-27 (8.3%)  
0307 Molluscs  88.2 70.4 90.3 92.2 109.2  90.0 10.9 China (38.2%); Viet  Nam (13.7%); 
Rep. of Korea (9.4%)  
0303 Fish, frozen, excluding fish fillets and 
other fish meat of heading 03.04  68.8 67.8 70.6 117.8  108.0  86.6 10.5 China (39.5%); Thailand (15.4%); 
Viet Nam (14.4%)  
2301 Flours, meals and pellets, of fish or of 
crustaceans, molluscs, unfit for 
human consumption; greaves  35.3 52.2 52.2 56.1 27.2 44.6 5.4 China (34.5%); Viet  Nam (31.4%); 
Japan  (15.2%)  
0304 Fish fillets and other fish meat, fresh, 
chilled or frozen  33.5 37.6 46.6 47.7 43.7 41.9 5.1 Japan (21.8%); Saudi  Arabia (19.9%); 
Singapore (14.4%)  
1605 Crustaceans, molluscs and other 
aquatic invertebrates, prepared or 
preserved  45.9 40.8 45.2 30.8 38.3 40.2 4.9 Australia (32.2%); Singapore (21.6%); 
United  Kingdom (15.6%)  
Total imports of fish and fish products  970.6  1,046.8  1,137.6  1,137.9  1,329.6  1,124.5  100.0  China (23.0%); Indonesia (15.4%); 
Viet Nam (12.0%);  
% of total imports  0.5%  0.5%  0.6%  0.6%  0.6%  0.5%   
  
0303 Fish, frozen, excluding fish fillets and 
other fish meat of heading 03.04  242.7  245.4  249.9  245.4  284.2  253.5  22.5 China (26.1%); Viet  Nam (12.3%); 
Japan  (7.3%)  
0302 Fish, fresh or chilled, excluding fish 
fillets and other fish meat of 
heading  03.04  138.0  173.4  183.1  165.7  183.6  168.8  15.0 Indonesia (52.5%); Thailand (26%); 
Norway (17.1%)  
0307 Molluscs  125.7  126.1  140.6  145.0  201.6  147.8  13.1 China (40.6%); India (11.9%); 
Viet Nam (7.9%)  
0306 Crustaceans  121.5  140.1  153.9  142.6  163.6  144.4  12.8 China (17.2%); Indonesia (14.8%); 
Thailand (9.8%)  
0304 Fish fillets and other fish meat, fresh, 
chilled or frozen  109.5  127.2  147.7  139.5  173.6  139.5  12.4 Viet Nam (34.2%); China (18.9%); 
Indonesia (16.3%)    
  WT/TPR/S/436 /Rev.1  • Malaysia  
 
- 147 - HS 
code  Product description  2017  2018  2019  2020  2021  Average 
value 
2017 -21 % of total 
fish and 
fishery 
trade 
2017 -21 Major partners  
(% of total fish and fishery products 
exports or imports)  
1604 Prepared or preserved fish; caviar 
and caviar substitutes prepared from 
fish eggs  76.1 70.0 83.9 122.9  113.9  93.4 8.3 China (52.6%); Thailand (26.7%); 
Indonesia (4.5%)  
0305 Fish, dried, salted or in brine; 
smoked fish flours, meals and pellets 
of fish, fit for human consumption  40.7 49.8 37.6 36.0 55.0 43.8 3.9 Thailand (34.9%); Viet  Nam (33.4%); 
Myanmar (16.4%)  
a Major products are ranked according to averaged values 2017 -21. 
Note:  WTO definition of fish and fishery products: HS  Chapter 03, 0508, 0511.91, 1504.10, 1504.20, 1603 -1605, and 2301.20, plus some sel ected products 
(HS 2905.43 -2905.45, 3301, 3501 -3505, 3809.10, 3823, 3824.60, 4101 -4103, 4301, 5001 -5003, 5101 -5103, 5201 -5203, and 5301 -5302).  
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
__________