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Setting up Warehousing Business in Malaysia

Updated: Aug 27, 2023


Setting up Warehousing Business in Malaysia | Bestar
Setting up Warehousing Business in Malaysia | Bestar

There are three (3) types of licences, depending on the warehousing requirements of the operator. An operator can choose to operate as an ordinary warehouse, a Public Bonded Warehouse or a Private Bonded Warehouse. Investors intending to provide warehousing services are required to incorporate a company under the Companies Act, 2016.

Licensing and Registration

(i) Ordinary Warehouse Licence Investors intending to provide warehousing services are required to incorporate a company under the Companies Act, 2016. The following approvals must be obtained before applying to the Local Authority:-

  • Approval from the Department of Environment (DOE) when operators store hazardous goods.

  • Approval from the Fire and Rescue Department and other Technical Agencies to ensure that the premise is equipped with an adequate number of fire extinguishers and safety alarm systems.

Certificate of Completion and Compliance (CCC) from the Local Authority which is an official document to acknowledge that the building is safe for occupation. The CCC is issued by the project’s Principal Submitting Person (PSP) who is a Professional Architect, Professional Engineer or a Registered Building Draughtsman. (ii) Public Bonded Warehouse Licence A Public Bonded Warehouse operates as a central storage for the distribution of bonded goods (i.e. goods on which Customs duties and taxes have not been paid) in the country and for international trade, catering for the general public. Public Bonded Warehouses that store different categories of goods must comply with the following conditions:-

Category of Goods

Minimum Warehouse Space (square feet)

Minimum Paid-up Capital (RM)

Minimum Value of Goods Warehoused

Critical Goods

​50,000

​1,000,000

​NA

​​Non-Critical Goods

​20,000

​250,000

​NA

(iii) Private Bonded Warehouse Licence

A Private Bonded Warehouse is a central storage and distribution centre for bonded goods (i.e. goods on which Customs duties and taxes have not been paid), of the companies and its related companies. Private Bonded Warehouses that store different categories of goods must comply with the following conditions:-

Category of Goods

Minimum Warehouse Space (square feet)

Minimum Paid-up Capital (RM)

Minimum Value of Goods Warehoused

Critical Goods

NA

150,000

​​5,000,000

​Non-Critical Goods

​NA

​​100,000

​2,000,000


Activities that can be carried out in these warehouses are as follows:

  • Warehousing

  • Bulk breaking

  • Re-packaging

  • Re-labelling of imported goods

  • Consolidation

  • Entreport

  • Devending

A company that wishes to provide public or private bonded warehousing services must apply to the Royal Malaysian Customs Department.

Establishment of Free Zone

The application to establish a free zone must be made through a process the following: 1. Applicants need to prepare a paper to the Secretary's Office State Government and State Economic Planning Unit (UPEN) for support. 1.1 The working paper must contain the following items: a) Area location and area area. b) Land status (land use / land ownership). c) Activities to be carried out (Trade / Manufacturing / Retail). d) Types of goods and services involved. e) Justification of the application of the area as a free zone. f) Business development planning to develop the area. g) Financial resources. h) Expected return on investment (ROI). i) Company information such as Board of Directors / share holder. j) Impact on the economy, social, security and the environment. k) Support from related agencies such as the Department Environment, State Land and Mines Office and others. l) Other requirements set by the Ministry Financial. 2. Application letter, gazette application paperwork and letter support from the State Government and the State Economic Planning Unit (UPEN) should be forwarded to the address as below for obtain a policy approval letter from the Ministry of Finance. Chief Secretary of the Treasury Finance Ministry Malaysia Tax Division Ministry of Finance Complex No. 5, Persiaran Perdana, Precinct 2 Federal Government Administrative Centre 62592 Putrajaya and copy to: Director General of Customs Royal Malaysian Customs Headquarters Customs Division Ministry of Finance Complex No. 3, Perdana Promenade, Precinct 2 Federal Government Administrative Centre 62592 Putrajaya 3. After the policy approval letter is issued by the Ministry of Finance, Applicants should contact the relevant State JKDM to meet the conditions specified in the approval letter base. 4. The applicant must develop infrastructure in the desired area developed as a free zone. Development progress report area and compliance with the terms of the policy approval letter periodic (at least every six months) should be forwarded to the Customs Division, JKDM Headquarters and a copy to JKDM Zone / State concerned. 5. At the same time, the following documents need to be prepared: a) Three (3) copies of the Gazetted Plan issued by the Survey Department and State Mapping (JUPEM). b) The Zonal Authority's nomination letter which has been supported by the Unit State Economic Planner (UPEN). c) Letter of support from the Local Authority. d) Certificate of Eligibility to Occupy the Building by the Fire Department and Rescuer. 6. Once the development of the area is fully completed by complying the conditions in the policy approval letter as well as Customs requirements, the applicant must submit a full report to JKDM Zone / State. A complete report should cover infrastructure development, Customs office as well as other related agencies, Customs control post at exit / entrance, fence position, location photos as well the documents in Para 5. 7. JKDM Zone / State must make a site visit to confirm report submitted by the applicant. 8. Next, JKDM Zone / State must submit a report and support for the gazette application to the Division Customs, Headquarters covers the following matters: a) JKDM Zone / State comments on the report from the applicant. b) The readiness of the area to be gazetted. c) List of required officer positions. d) Estimated annual costs to be borne by JKDM (employment, management costs, building rental costs, operating costs and others). e) Requirements and costs of movable assets, safes, vehicles, scanning machines and others (if necessary). f) Pictures of the location. 9. The Customs Division, Headquarters must take action the following: 9.1 Make a site visit to confirm the report submitted by JKDM Zone / State and the applicant. 9.2 Make complete reports and comments for the purpose of journalism area to the Law Study and Enforcement Unit, Enforcement Division, Headquarters. 10. Law Enforcement Division Study and Strengthening Unit, Headquarters shall draft a gazette notification based on the complete report received for the Division's review Legislation, Headquarters. 11. After the review is done, the Legal Division, Headquarters will submit a draft notification of the gazette and report received to the Attorney General's Department. 12. The Attorney General's Department will approve the draft notification gazette and then submitted to the Ministry of Finance to be signed by the Minister. 13. The Ministry of Finance will return the gazette notification which has been signed by the Minister to the Attorney General's Department to be uploaded into the Federal Government Gazette. 14. Once the area is gazetted, the Ministry of Finance will issue Zonal Authority appointment letter (for gazette applications new free zone area). 15. In accordance with the provisions of Section 3(1) of the Free Zone Act 1990, something the free zone area should be declared as a trade zone free or free industrial zone through notification in the gazette. Accordingly, an area cannot operate as a free zone until the area is declared in Federal Government Gazette. 16. The Zone Authority that has been appointed shall carry out the duties and the responsibility of administering, maintaining and operating for the area which has been gazetted according to the provisions in the Free Zone Act 1990 and the Free Zone Regulations 1991. From

-> Application presented to Ministry of Finance -> Policy approval letter from the Ministry of Finance -> Applicant complied policy requirements of letter of approval -> Progress report by applicant with gazette plan issued by JUPEM -> State JKDM report (including site tours) -> Customs Report Section, Head Office (Including site tours) -> Legal Study Unit -> Legal Department Office -> Attorney General's Department -> Ministry of Finance (signature of the Minister) -> Government Gazette Federation End The following approvals must be obtained before applying to the Royal Malaysian Customs Department:

Other Licensing and Registration

A Public or Private Bonded Warehouse operator that is licensed under Section 65 of the Customs Act, 1967 can be given permission to act as an agent for transacting businesses relating to the import or export of goods that are stored in the licensed warehouse. For this purpose, a warehouse operator is required to obtain a Freight Forwarding Agent/Customs Agent Licence and/or Shipping Agent Licence. Applications for the above licences except for Customs Agent Licence should be submitted directly to the Royal Malaysian Customs Department. Before acquiring a Freight Forwarding Agent/Customs Agent Licence from the Royal Malaysian Customs Department, the company must obtain an International Integrated Logistics Services (IILS) status from MIDA.

Equity Policy

  • Ordinary Warehouse: There is no equity condition imposed by the Royal Malaysian Customs Department. Investors only need to obtain licence from the local authority.

  • Public Bonded Warehouse: A company must have at least 30% Bumiputera equity.

  • Private Bonded Warehouse: There is no equity condition imposed by the Royal Malaysian Customs Department.

Specific Immigration Procedure

The company must apply for an approval to employ expatriates from the Expatriate Committee of the Immigration Department. Upon approval of the expatriate posts, companies should forward their applications for Employment Passes to the Immigration Department for endorsement. The spouse and children of the expatriate can apply for Dependant Passes once the expatriate has been issued with the Employment Pass. The Dependant Pass may be applied together with the application for the Employment Pass or after the Employment Pass is approved. The spouse and children of the expatriate who enter the country on a visit (temporary employment or professional) will be issued a visit (social) pass.

Special Industrial Building Allowance for Warehouses


An initial allowance of 10% and an annual allowance of 3% of qualifying capital expenditure is given for buildings used as warehouses for storing goods for export and re-export. Applications should be submitted to the Inland Revenue Board. Seeking professional advice? Subscribe to our tax services.

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For investors who intend to set up projects in manufacturing and services sector in Malaysia, contact Bestar. With its office in Malaysia’s capital city of Kuala Lumpur, Bestar assists investors interested in establishing manufacturing projects and services activities in Malaysia. Bestar facilitates investors in the implementation and operation of their projects. If you wish to explore investment opportunities in Malaysia, please contact Bestar for more information as well as assistance in your decision-making.

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