Given the fact that Malaysia is Australia's ninth largest trading partner, companies should understand how to transport goods to this country to further their businesses.
As a strategic gateway to Southeast Asia, Malaysia is a promising market with a fast-growing economy for Australian businesses looking to expand their exports. Malaysia offers a wide range of opportunities in a variety of business sectors, including but not limited to agriculture, mining, manufacturing, food and beverage and more.
To aid Australian business owners and investors in their venture into the lucrative Malaysian market, here are some important information to note.
Malaysia-Australia Free Trade Agreement (MAFTA)
Firstly, like many other global free trade agreements, the Malaysia-Australia Free Trade Agreement (MAFTA) provides Australian businesses with a significant competitive advantage. Signed on 22 May 2012 in Kuala Lumpur between the Ministers of Trade from each nation, the MAFTA eliminated and reduced tariffs on goods traded between the two countries.
This agreement lowered upfront costs, allowing Australian businesses such as automotive manufacturers in Adelaide, sustainable technology exporters in Gold Coast or advanced electronic makers in Sydney to price their products in a more competitive position within corresponding market segments in Malaysia.
Other benefits that businesses can enjoy because of MAFTA include:
More than 99% of goods from Australia are traded tariff-free in Malaysia.
Complete elimination of tariffs for commodities such as plastics and chemicals.
The elimination of all iron and steel tariffs since 2020.
Other key outcomes of the agreement include:
Deregulation of the licensing requirements for liquid milk exporters permits access to more exclusive high-value products.
All tariffs on large cars were eliminated, and most tariffs on automotive parts have been removed.
Withdrawal of almost all taxes and tariffs on processed food and various manufactured items.
Australian wine exporters are set to receive the most favourable tariff arrangements from Malaysia compared to any other country.
Rice tariffs will be completely eliminated by 2026, with open access arrangements starting in 2023.
Australian investors are also guaranteed the right to majority ownership in companies in a wide range of sectors supplying services in Malaysia:
100% ownership in higher education, accounting, auditing and bookkeeping as well as management consulting services (other than financial management)
70% ownership in investment banking, direct insurance services, and telecommunications services
51% ownership in taxation services.