Additional Malaysia resources
Understanding how economics, politics and government intersect can help businesses navigate Malaysia's market with confidence. This chapter outlines key institutions, economic zones, essential contacts and support resources for business success.
Country information
Politics and government
Malaysia is a federal constitutional monarchy with a multi-party parliamentary democracy. The King is the head of state, the Commander of the Armed Forces and the leader of the Islamic religion for the states of Penang, Sabah, Sarawak and the Federal Territories. The Prime Minister is the head of government.
Power in Malaysia is separated between the Legislative, the Executive and the Judiciary. Legislative power is divided between federal and state legislatures, with the states being Perlis, Kedah, Penang, Perak, Selangor, Negeri Sembilan, Malacca, Johore, Pahang, Terengganu, Kelantan, Sarawak and Sabah.
Federal power is vested in the Executive, comprised of the Government, and the Legislative, which houses the Senate and the House of Representatives. The House of Representatives has 222 members and the Senate has 70. The legislative bodies are located in Kuala Lumpur, while the federal government is located in the administrative capital, Putrajaya. The federal government is responsible for finance, defence, education and foreign affairs.
Malaysian politics can be fractious and coalition partners can be required to form government.
Legal system
In Malaysia, the British-influenced common law system operates alongside Islamic law. The common law system predominates, particularly in commerce, while Islamic law governs civil law, which relates to family law and personal conduct for the country's Muslim population.
The Federal Court is Malaysia’s highest court, below which sit two lower courts. Together, these three are the Superior Courts. There are two Subordinate Courts below this. The states of Sabah and Sarawak in Malaysian Borneo have their own court system.
Malaysia’s government and judicial structure
Key government agencies
Key government agencies and industry associations will need to be consulted throughout the process of setting up a business in Malaysia. Some of these agencies can also be useful for providing advice and initiating contacts.
The main agencies and their areas of authority relating to foreign businesses are:
| Government agency | Responsibilities | Website |
|---|---|---|
| Malaysia Investment Development Authority (MIDA) | MIDA is the principal agency for developing manufacturing and service capabilities in Malaysia. Businesses may consult with MIDA for investment approvals, business incentives, and advisory services. | mida.gov.my |
| Ministry of International Trade and Industry (MITI) | MITI oversees international trade and industrial development. MITI is responsible for trade policies, export-import regulations, and industrial promotion initiatives. | miti.gov.my |
| Malaysia External Trade Development Corporation (MATRADE) | MATRADE promotes Malaysia’s exports of goods and services. Australian companies can approach MATRADE for market information, export assistance, and trade promotion activities. | matrade.gov.my |
| Royal Malaysian Customs Department (RMCD) | The Royal Malaysian Customs Department manages customs, excise duties, and other related taxes. Businesses will interact with them for customs clearance, import-export regulations, and duties. | customs.gov.my |
| Companies Commission of Malaysia (SSM) | SSM is responsible for the incorporation of companies and businesses. Private companies will submit financial statements and audit reports to SSM. | ssm.com.my |
| Central Bank of Malaysia (Bank Negara Malaysia) | Bank Negara Malaysia is the central bank that regulates financial institutions and monetary policy. They are responsible for banking regulations, financial stability, and economic policy control. | bnm.gov.my |
| Inland Revenue Board of Malaysia (LHDN) | LHDN is responsible for the administration and collection of direct taxes. Businesses and individuals will file tax returns with LHDN and may consult with them regarding tax incentives and compliance. | hasil.gov.my |
| Intellectual Property Corporation of Malaysia (MyIPO) | MyIPO handles the registration and enforcement of intellectual property rights. Companies register IP, file complaints and seek enforcement actions through MyIPO. | myipo.gov.my |
| Malaysia Digital Economy Corporation (MDEC) | Malaysia Digital Economy Corporation (MDEC) leads all aspects of business relating to investments in digital technologies and exports. | mdec.my |
Free Trade and Special Economic Zones
Malaysia has five Special Economic Zones (SEZs) or Economic Corridors. These Economic Corridors are designed to attract investment by offering tax incentives, strong infrastructure, favourable market access through lower or no tariffs and a business-friendly regulatory environment.
Priority sectors for each zone overlap and include manufacturing, agriculture, tourism, healthcare services and electrical and electronics. Many priority sectors align with the sectors Austrade has identified as trade and investment opportunities for Australian businesses.
Within these corridors, Malaysia has two types of free trade zones, Free Industrial Zones (FIZ) and Free Commercial Zones (FCZ). Malaysia’s 22 FIZs have been established for manufacturers to import raw materials and manufacture goods for export. The 24 FCZs are designed to promote commercial and trade activities in Malaysia. These are designated areas where products can be produced, imported, stored and re-exported with minimal customs checks and tax exemptions for most goods and services.
Malaysia’s Economic Corridors and Free Trade Zones
An economic zone is planned for the state of Johor, which will be a joint Special Economic Zone with Singapore. An enhancement of the Iskandar Malaysia corridor, it will encapsulate a bilateral framework involving Singapore. The two countries signed a MoU in early 2024 and there are plans for a formal agreement announced in January 2025.
Malaysia-Australia bilateral relationship
2025 marked 70 years of Australia's diplomatic presence in Malaysia. The two countries elevated long standing economic, political and security ties to a Comprehensive Strategic Partnership in 2021, which includes provisions for cooperation on issues related to society and technology. Other existing agreements include: the Malaysia-Australia Free Trade Agreement, ASEAN-Australia-New Zealand Free Trade Agreement, the Regional Comprehensive Economic Partnership, the Comprehensive and Progressive Trans-Pacific Economic Partnership, and the Indo-Pacific Economic Framework.
The Australian and Malaysian Prime Ministers meet regularly. There are also regular ministerial meetings on trade and foreign affairs. Further information on the bilateral relationship is available from DFAT.
Useful contacts and support resources
Government organisations
Australian Department of Foreign Affairs and Trade (DFAT)
DFAT manages Australia’s international network, including in Malaysia. Australia has a High Commission in Malaysia.
Austrade
Austrade is the Australian Government agency responsible for facilitating international trade and investment. Austrade can provide advice on the market, potential in-market partners and export marketing services. Austrade has an office in Malaysia.
Export Finance Australia
EFA provides information, support and export finance solutions to Australian businesses looking to expand overseas.
State government agencies
Many state government agencies have representatives or offices in Malaysia, including New South Wales, Victoria and Western Australia.
Malaysian Investment Deal Team
The Deal Team brings together the Australian Government’s commercial, finance and policy capability to connect Malaysian projects with Australian investors.
Business and industry associations
AustCham ASEAN
The Australian-ASEAN Chamber of Commerce represents and promotes Australian businesses operating in the ASEAN region. AustCham coordinates a regular program of business seminars, networking and social functions for the business community in ASEAN
Malaysia Australia Business Council
The Malaysia Australia Business Council promotes bilateral trade and investment opportunities between Australia and Malaysia. In addition to networking and cultural awareness programs, it offers a B2B supply chain consultancy service for Australian businesses looking to enter Malaysia.
Export Council of Australia
The Export Council of Australia is the peak industry body for the Australian export community.
Programs and support
Go Global Toolkit
Austrade's Go Global Toolkit provides market advice, legal and regulatory guidance and export readiness assessments.
Export Market Development Grants (EMDG)
Austrade seeks to help small to medium Australian enterprises grow their exports in international markets through their EMDG grant program.
Industry Growth Program
The Industry Growth Program supports innovative SMEs undertaking commercialisation or growth projects in the National Reconstruction Fund priority areas.
State or territory government trade and investment agencies may also run programs and provide support to businesses looking to expand into international markets. Please consult your relevant state or territory agency for more information.
References
A select list of sources used in the development of this publication are included below.
Australian Department of Education
Australian Department of Foreign Affairs and Trade
Australian Trade and Investment Commission (Austrade)
ASEAN
Azmi and Associates
Baker McKenzie
Dezan Shira and Associates
DLA Piper Intelligence
Euromonitor
Fitch Ratings
IMF
International Federation of Accountants
PWC
The Heritage Foundation
Transparency International
S&P Global
UNICEF
University of Malaya
University of Notre Dame
US Chamber of Commerce
US Department of State
US International Trade Administration
Malaysia Government (various sources)
We Are Social
World Bank
A note on currency
All money amounts are in Australian dollars unless otherwise indicated.
Exchange rate used is the historical rate for the previous twelve months.
AUD 1 = USD 0.6482
AUD 1 = MYR 2.8547
Acknowledgements
Asialink Business gratefully acknowledges the assistance and information from the following organisations in the production of this Doing Business Guide:
Austrade
Bobby Varanasi, CEO, Regenerative Futures
Department of Foreign Affairs and Trade
Disclaimer
This publication contains country and industry general information and does not address the circumstances of any particular individual or entity. While all efforts have been made by Asialink Business to ensure that the data and information provided herein are accurate, the accuracy of the information in the future cannot be guaranteed.
Users of this document should undertake their own independent analysis and obtain appropriate professional advice, if required, before acting upon such information in any given situation. Asialink Business accepts no liability for any loss which may arise from the use of the information contained in this publication.
Reproduction of any part of this publication without prior written approval of Asialink Business is strictly prohibited. The information in this document is accurate as of November 2025.