Import regulations and customs duties
Import regulations in Malaysia are liberal as compared to other ASEAN countries' regulations. Most of the goods can be freely imported under Open General License. Some specific sectors, considered as strategic, are protected by a system of restricted import licenses. Items covered under this category are iron industry, the cement, motorcar and its component and also polyethylene and polypropylene.
The restrictions in import licensing also affect other sectors in terms of approval (electrical products and sanitary items, dietary or veterinarian products), without having a protectionist measure.
Quotas are not frequently applied to imports and are fixed on certain products which production is favoured(rice, meat, fruits and vegetables). In extreme cases (frozen chicken, eggs, liquid milk or sugar), if it is considered that the local production is self-sufficient, import is forbidden. There are other products that are forbidden or subject to special licenses for safety, religion or morality reasons.
The customs classification of the goods is based on the International Nomenclature of the Harmonised System. A majority of customs duties are calculated ad valorem and are specific only in certain cases. Imported goods, except for machinery, its parts and components, are subject to a tax on sales which varies between 5 to 10%. In recent years, duties have dropped and now fluctuate between 15 and 25%. However certain sectors can be taxed up to 30%. The customs tariff is high when the imported product is also locally produced (from 30 to 50 %).
In January 1996, Malaysia, within ASEAN market, subscribed the Common Effective Preferential Tariffs (CEPT) arrangements, which significantly increase the products list of the previous Preferential Trading Arrangements (PTA). The introduction of the CEPT is meant to accelerate the establishment of a free trade zone within ASEAN countries (AFTA - ASEAN free Trade Area). Before 2003, all products integrated into the CEPT, will undergo a duty from 0 to 5%. Non-taxed farm products remain outside the agreement. There is currently a list of temporary exclusion for some products, in force until January 1, 2000.
Malaysia benefits from the Preferential Generalised System, under which 14% of its exports is carried out.
Whoever wants to trade in Malaysia should take into account the multiracial population and the strong economic and social disparities. The selection of an agent should be based on ethnic considerations. It is advisable to associate with a well established local company.
Commercial transactions between the Chinese or Malaysian communities are very different from transactions between European communities. Chinese are commercially powerful and dominate the distribution network. Trade is the centre of small family businesses and operates from a complicated structure of providers, entrepreneurs and sub-entrepreneurs.
The most influential persons in the economic activity are the public administrators, the Malaysian entrepreneurs (in low number) and the Chinese entrepreneurs (who hold the most important private groups of the country).
The Business to Consumer (B to C) market
The Business to Business (B to B) market
Transportation of goods
Malaysia had a 64,328-km road network, highways and main roads in 1995. This mode of transport represents 90% of the goods and passengers traffic in Malaysia. The federal Government allowed some groups to enter the country and build toll roads. Therefore, 16,000 km of additional roads were expected during the year 2000, of which 2/3rd are financed by foreign investments.
Malaysia has a rail network of more than 2,000 km, mainly located in Kuala Lumpur and along the coast of the strait of Malacca. There are constant improvements in the railway service. Moreover, an urban train project is under development.
Malaysia's harbour requirements were traditionally served by Singapore. The strong growth in terms of exports and other requirements implied the increase of the harbour capacities. The main ports of the country are Kelang ( Kuala Lumpur)
and Johor, all on the coast of the Etroits. For some years, Kelang's port has been receiving important investments aimed at getting back the goods traffic that currently serves Singapore.
The main airports are Johore Bahru, Penang and Kuala Lumpur. The international airport, Subang, on the Western part of the capital will soon share its functions with the less important New Sepang, in the South East, that was inaugurated in 1998.
The organisation in charge of the normalisation and the certification of products in Malaysia is the Department of Standards Malaysia (DSM).
The standards and Industrial Research Institute of Malaysia (SIRIM) is the body accredited by the Malaysian Administration for the development of the activities of standardisation and certification. At the moment, the SIRIM has more than 600 standards, with more than 70 different procedures for certification. The SIRIM grants the SIRIM mark of quality with the Malaysian standards.
For some precise products and production processes, it is necessary to obtain a certificate from the SIRIM. There are certain cases when the approval of some other organisations is necessary, for electrical products for instance, which require the approval of the Department of Electrical Inspectorate under the Ministry of Energy, Telecommunications and the Post. Generally the British standards are used.
Patents and brands
The organisation in charge of the protection of intellectual property is the Kementerian Perdagangan Dalam Negeri Dan Hal Ehwal Pengguna.
Malaysia is a member of the World Intellectual property Organization and signed the Agreement of Paris on the Protection of Industrial Property.
The protection of patents is governed by the 1983 Law. The current regulation came into force on October 1st, 1986. The request for a patent should be presented in Malaysia and this will cover the whole country. Inventions can be patented only if they are new, little obvious and industrially applicable. A patent expires after 15 years but can be renewed in certain cases.
The protection of registered trademarks is governed in Malaysia by the 1976 and 1983 Laws.
In order to register a trademark, it is necessary to seek its registration from the Registrar of Trade Mark and to indicate the user of the brand in the country. As soon as the trademark is registered, it becomes protected and its usage is continuous.
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