Set up an Agricultural Business in Malaysia

Updated on Monday 01st April 2019

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A way in which foreign investors can open a company in Malaysia is by setting up an agricultural business here. The sector is sustained by the local government thought numerous policies and the main institution which handles the development of the field is the Ministry of Agriculture and Agro-Based Industry (MOA), which manages the implementation of such projects.

In order to apply for the development projects carried out through this institution, the investors will have to accomplish a set of requirements, depending on their respective activity. Our team of company formation representatives in Malaysia can offer assistance on the registration of an agricultural business, as well as on the business permits that can be required for this type of activity. 
 

Register a company in Malaysia  


In order to open a company in Malaysia, the investors will need to choose a legal entity for the respective business and to register it with the Companies Commission Malaysia. Foreigners are allowed to set up a company with 100% foreign capital, which is usually registered as a limited company. 

However, it is important to know that all the companies registered here require at least two directors, who must be residents of Malaysia. At the same time, it is compulsory to have a business address registered in Malaysia, as well as a corporate bank account. Our team of specialists in company formation in Malaysia can assist investors with legal advice on these procedures. 
 

What are the regulations on exporting agricultural products from Malaysia? 
 

Businessmen who are involved in the agricultural sector in Malaysia and who are also considering exporting such products to third party countries are required to complete several steps in order to be allowed to develop trading activities. Our team of consultants in company registration in Malaysia can advise businessmen on how to become exporters of agricultural products and investors must know that the following will apply: 
 
  • the first step in becoming an licensed exporter is to have a company registered in this country with the Companies Commission of Malaysia;
  • in the case of fruit exports, the license is needed for specific types of products;
  • for example, the fruit export license is necessary for the export of star fruits, pineapple or papaya;
  • the fruit export license for the export of pineapple is obtained from the Malaysian Pineapple Industry Board;
  • the company also needs to be registered with specific industries regulating trading activities, such as the Malaysian International Chamber of Commerce (MICCI)
     
The Malaysian agricultural company has to be registered with MICI for the issuance of a certificate of origin for the exported agricultural products. In the case of fruit exports, the fruit export license can be requested from the Federal Agricultural Marketing Authority (FAMA) when dealing with the export of star fruits and papayas. Please note that additional steps have to be completed in this case and our specialists may provide further in-depth information.  
 
The trading of other agricultural products in Malaysia is regulated by specific industries; thus, when having a business activity related to the production, sale or import-export of cocoa, the main institution in charge with any matter concerning the supply-chain of cocoa is the Malaysian Cocoa Board; if investors start a business activity related to the production of palm oil, the necessary permits and licenses will have to be obtained from the Malaysian Palm Oil Board; our team of specialists in company registration in Malaysia can assist investors when registering with each of the above mentioned institutions.  
 

What documents should a Malaysian exporter prepare? 


Provided that the agricultural company in Malaysia is interested in exporting its products to other countries, a set of documents have to be prepared for each shipment of goods. In this sense, an invoice has to be presented, attesting the commercial relation with another entity from a foreign country, the necessary export license (depending on the type of good exported), the phytosanitary certificate, issued by the Department of Agriculture, the certificate of origin, as well as the export permit, a document issued by the Malaysian Quarantine and Inspection Service

While exporting agricultural products included in the category of fruits, the company must also ensure that the delivery of goods is completed in accordance with certain technical requirements, which vary depending on the product. Thus, aspects such as temperature and humidity have to be considered; this is applicable for both the export of fresh fruits, as well as for fruits that were processed. 
 

Agricultural industry in Malaysia  


The agricultural industry in Malaysia has suffered many changes in the last decades, changing from family farms to more modern means of production, carried out through various companies which are able to implement systems that align with the local and international food and safety standards

Agriculture in Malaysia refers to a wide range of products and the MOA projects can help investors who grow fruits and vegetables or who are involved in a business providing meat products on the local market. In order to apply to the MOA projects, the businessmen will need to provide a certificate attesting the quality and the food safety of their crops, but also to have a business plan that can be implemented. 
 

What is the current state of the Malaysian agricultural sector? 


We have presented so far the main aspects on opening a company in Malaysia, the steps necessary for exporting certain types of agricultural products from this country and the documents needed in this case. However, investors should also know that the Malaysian agricultural industry has a significant impact on the local economy, accounting for 8.2% of the country’s gross domestic product (at the level of 2017). 

If investors are not sure on what business activity they should start in this sector, we mention that the most representative commodities of the Malaysian agricultural market are the following: fruits, vegetables, palm oil, rubber, rice, cocoa, livestock and fish products. As a general rule, industrial commodities are provided by large companies, while in the case of small businesses, their main object of activity relates to the agro-food sub-sector.  

Businessmen should also know that they can acquire property necessary for agricultural activities, if the value of the property is of minimum RM 1 million. As a general rule, the acquisition of property falls under the supervision of the Prime Minister’s Department, but exemptions can be applicable depending on the property -  its financial value and size (minimum five acres) are the main criteria, but also on the residency of the company purchasing the property (it must be registered in Malaysia). 

Investors are invited to contact our company formation agents for more details on the procedure of company registration in MalaysiaOur representatives can assist with information on the taxation system applicable for this type of company, but also on the accounting principles imposed to local businesses.