Shipping from Australia to Malaysia: Your guide to a seamless process

From 2023 to 2024, the total two-way trade between Malaysia and Australia was valued at AU$33 billion, underscoring the opportunities that Malaysia holds for Australian businesses¹.

In the same period, the country was Australia’s second largest two-way goods trading partner among ASEAN Member States and tenth largest partner overall1. This strong relationship showcases how Malaysia presents a promising market if you’re looking to expand your exports. 

Moreover, the Malaysia-Australia Free Trade Agreement (MAFTA) promises to further your competitive edge through tariff reductions and increased market access, especially in sectors like agriculture, mining, manufacturing, and food and beverage. 

So, ready to reap the opportunities that Malaysia presents? This shipping guide will provide the essential information you need to know when shipping from Australia to Malaysia.

The Malaysia-Australia Free Trade Agreement (MAFTA)

Like many other global free trade agreements, the Malaysia-Australia Free Trade Agreement (MAFTA) offers eligible businesses a significant competitive advantage when shipping from Australia to Malaysia. Signed on 22 May 2012 in Kuala Lumpur, MAFTA has eliminated and reduced tariffs on goods traded between the two countries.

This agreement has lowered upfront costs for Australian businesses, enabling them to price their products more competitively within corresponding market segments in Malaysia.

Benefits of MAFTA for Australian goods exporters

Under MAFTA, more than 99% of goods from Australia are traded tariff-free in Malaysia². The agreement also offers a range of benefits, enabling Australian exporters to lower costs for the following goods2:

• Plastics, chemicals, iron, and steel: Tariffs have been eliminated.
• Automotives: Elimination of all tariffs on large cars and most tariffs on automotive parts. 
• Liquid milk: Licensing requirements for exporters have been deregulated, permitting expanded access for exclusive high-value products.
• Processed food: Almost all taxes and tariffs have been withdrawn.
• Wine: Australian wine exporters are set to receive the most favorable tariff arrangements from Malaysia compared to any other country.
• Rice: Open access arrangements began in 2023, and tariffs will be entirely eliminated by 2026.

Benefits of MAFTA for Australian service suppliers

Australian investors also benefit from MAFTA, which guarantees the right to majority ownership for companies in a wide range of service sectors in Malaysia2. This helps facilitate greater investment opportunities for businesses in Australia and ensures your business has more control when establishing a presence in the Malaysian market.

Under the Agreement, Australian businesses stand to enjoy 100% ownership in the following sectors2:

• Higher education
• Accounting 
• Auditing
• Bookkeeping
• Management consulting (excluding financial management consulting)

They also enjoy the following ownership rights in other sectors2:

• Investment banking and direct insurance services: 70%
• Telecommunications services: At least 70%
• Taxation services: 51% 

Popular products shipped to Malaysia

Major exports from Australia to Malaysia include mineral fuels, coal, copper, machinery, wood, and metal ores. Additionally, Malaysia's expanding economy presents noteworthy opportunities in other industries, such as food and agribusiness (including halal food), education, digital economy (e-commerce and fintech), healthcare, smart cities, energy, and military defence.

When shipping to Malaysia, it's helpful to know what your target consumers are actively seeking. Here are some Australian goods that are highly sought-after in the country:

• Cereals
• Meat and organ meat
• Dairy products, eggs, honey, edible products
• Electrical, electronic equipment, and technical apparatus
• Seeds, grains, and fruits
• Precious stones and pearls

Prohibited and restricted goods when shipping to Malaysia

It’s also crucial to understand the goods that can impede your shipment – prohibited and restricted goods. 

Prohibited commodities are items that are absolutely forbidden from import into Malaysia under any circumstances. Shipping these items will result in immediate seizure and potential legal penalties: 

• Any reproduction of Malaysian and other currencies
• Indecent media, goods, and articles
• Piranha fish
• Turtle eggs
• Fabric with Quran verses
• Hazardous chemicals
• Certain types of weapons
• Dangerous drugs
• Counterfeit goods

Meanwhile, restricted goods are items that can be imported but require specific licenses, permits, quotas, or certifications from the relevant Malaysian authorities. These restrictions help to control the quality, safety, and supply of goods entering the country. As such, you’ll need to prepare the relevant documents before shipping these items:

• Corals
• Explosives and fireworks
• Pesticides
• Pharmaceuticals 
• Certain food products
• Agricultural items
• Electronics
• Safety helmets and articles of clothing for protective purposes

Getting through customs when shipping to Malaysia

Preparing your customs documentation

Accurate and complete paperwork is key to a seamless customs clearance process. To ensure your shipments are processed at Malaysia’s borders without delays, you'll need to prepare several essential shipping documents: 

• Commercial invoice: This features transaction details, including what is being bought, by whom, and the terms agreed upon. It’s vital for customs valuations. 
• Packing list: This document details the contents of each package, including weights and dimensions. It's not always mandatory, but it is helpful for inspections as it enables Malaysia’s customs authorities to verify the contents of your parcel easily.
• Certificate of Origin (CO): This document certifies where your goods were made. Crucially, a CO helps you leverage the benefits of MAFTA, potentially allowing your business to avoid paying unnecessary duties.
• Bill of Lading/Air Waybill: These serve as the contract of carriage and receipt for your goods. 

Applicable duties and taxes

MAFTA significantly reduces or eliminates import duties for eligible Australian goods entering Malaysia, as long as a valid Certificate of Origin is presented. 

However, despite these advantages, Malaysia's Sales and Service Tax (SST) generally applies to all imports, including goods that are duty-free under MAFTA. 

Unless specific exemptions apply, you will have to pay the following taxes:

• Services: 6%
• Goods: 5% to 10%

Defining cost responsibility through Incoterms 

One of the most significant challenges in international shipping is clarifying who is responsible for the payment of duties, taxes, and other charges. Incoterms help to eliminate this ambiguity by defining the responsibilities of sellers and buyers for the delivery of goods. 

Therefore, choosing the right Incoterm is essential for clarifying who is responsible for paying duties and taxes when you send packages to Malaysia. By establishing your and your consignee’s obligations, you can mitigate unexpected costs and delays and ensure a more positive experience for your customers.

Here are some common Incoterms that might be used:

• Delivered Duty Paid (DDP): The seller assumes all costs and risks, including customs duties, taxes, and fees, until the goods are delivered to the buyer's specified location.
• Delivered At Place (DAP): The seller bears the costs and risks of delivery until the goods arrive at a specified location. Thereafter, the buyer is responsible for unloading, import customs clearance, and paying any duties and taxes.

Make international shipping to Malaysia a breeze with DHL Express Australia

Preparing to export to Malaysia can be a complex process. However, a trusted logistics provider like DHL Express can help you navigate it with greater ease. 

Here’s what you stand to gain from a reliable international delivery provider like us:

• Unmatched speed and reliability: Our global network and dedicated express delivery options guarantee fast fulfillments for your time-sensitive shipments to Malaysia, with parcels arriving as fast as one to three business days on key routes. 
• Real-time tracking and visibility: With advanced tracking tools like MyDHL+, you're empowered with end-to-end visibility of your international delivery process. This provides you and your customer with peace of mind and allows for proactive management of your shipment's journey.
• Dedicated customer support: Our experienced and responsive professionals are ready to assist with any queries you might have, from documentation guidance to delivery updates, ensuring you get the professional support you deserve.
• Competitive and fair pricing: With our transparent pricing structures, you can be assured of high-quality logistics services with no surprises, regardless of your delivery location. 

Simplify your shipping process and grow your business in Malaysia confidently – open a business account with DHL Express Australia and kickstart your journey today.

Frequently asked questions about shipping from Australia to Malaysia