Malaysia is an open economy with a small domestic market. It is important for Malaysian businesses to go beyond our borders, explore more opportunities and expand markets. The free trade agreements (FTA) which the Malaysian government has signed can help companies to export. FTAs help to enhance our competitive advantage, strengthen investors' confidence and to a large extent, build Malaysia's economic sustainability.
Malaysia has already signed and implemented 7 bilateral FTAs with Japan, Pakistan, India, New Zealand, Chile, Australia and Turkey. While at the ASEAN level, Malaysia has 6 regional FTAs with ASEAN Free Trade Agreement (AFTA), China, Korea, Japan, Australia, New Zealand and India.
What is an FTA?
A Free Trade Agreement (FTA) is an international agreement between two or more countries to reduce or remove trade barriers and bring closer economic integration.
How can FTAs help my business?
- FTA offers lower or zero tariff (tariff concession) on exports and imports of goods and components assigned under FTA. This would make products more competitive, as compared to exports and imports from non-FTA partner countries
- More relaxed or removal of quantitative import restrictions
- Hassle-free custom procedures
- Improve market access for various services
- Easier entry for investors
How do I know whether my product is eligible for tariff concessions?
- Identify the FTA market you are intending to export
- Determine the Harmonised System (HS) Code of your products from Royal Malaysian Customs Department
- Check from Ministry of International Trade & Industry (MITI) website (http://fta.miti.gov.my) if the product is included in the tariff reduction and elimination schedule
- Check if the product satisfies the Rules of Origin (ROO)
What are Rules of Origin (ROO)?
- The ROO determines the country of origin of a product to be eligible for tariff concessions
- Rules of Origin for a product may vary across the different FTAs. Information on ROO can be obtained from the respective section of individual FTAs listed in MITI's website
If my product is eligible for tariff concessions, how do I go about claiming for the FTA benefits?
- If your products meet the stipulated ROO requirements, you need to get a copy of the Preferential Certificate of Origin (PCO).
- PCO is a document to prove or certify the status of origin of a product, and presented as an import document to the customs authority of an importing country so that the product can enjoy the stipulated tariff concession.
How do I apply for Preferential Certificate of Origin (PCO)?
- Register online with Dagang Net through www.dagangnet.com
- Send the Cost Analysis (CA) application to MITI via online with required documents. The approval process will take 5 working days*
- Send the PCO application online once receive approval of CA. The approval process will take 24 hours on a working day*
- Purchase the relevant PCO form (eg: Form AJ, D, AANZ, AK, E, MNZ, etc) from the Federation of Malaysia Manufacturers (FMM).
- Print the PCO approval using the relevant PCO form and submit to MITI for endorsement.
*subject to submission of required documents
Click here for more information on Preferential Certificate of Origin (PCO).
Now that I have got PCO documentation and approval, how do I claim for preferential tariff concession?
Present the PCO together with import documents to Customs Authority of the importing party