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Q2
Introduction
In any given country, there is a requirement to put barriers to trade or rules that control the importation and exportation of both goods and services. The rules are not meant to slow down trade but protect their domestic companies and traders from steep competition from foreign firms. Malaysia is ranked among one of the easiest countries to trade in in the world. However, the country has some import barriers. Its main objective is to protect the country from an influx of foreign goods, which would bring competition to the domestically produced goods. Therefore, before Rebecca’s “sea-farmed salmons” begins the exportation of their salmons to Malaysia, the company should be aware of the following barriers to trade set by the Malaysian government to control trade in the country.
Regulatory requirements
Through the Malaysia-Australia free trade agreement, the Australian food and beverage industry has acquired significant gains of market access and reduction of tariffs. However, the fish and seafood trade is one of the key areas regulated by the DVS Malaysia tariff quota jurisdiction. The following are some of the regulatory requirements.
- A health certificate accompanying all fish and seafood, a requirement by the Malaysian Ministry of health
- The fishery development authority of Malaysia requires an import permit for all fish and seafood.
- One is also required to comply with the Malaysian food laws and regulations. The food laws and regulation laws include the food act 1983 and the food regulations 1985. the laws were implemented to help protect the Malaysian citizens from food malpractices to protect them from health hazards due to food poisoning.
- The Malaysian customs also have a list of complete custom forms, a declaration form indicating the product description, value, weight, country of origin, and product weight.
Taxation considerations
As mentioned earlier, Malaysia is one of the easiest countries to trade with. The Malaysian government has improved the ease of importing and exporting by liberalizing its customs regulations. The tariff rate imposed on all goods exported to Malaysia ranges from 0-50 percent to the ad valorem rates. However, for goods that are already being produced in the country, the tariff is higher. About income taxation, all individual or company income made in Malaysia is liable to taxation. The applicable tax rates include personal tax, company sales tax, excise duty .it is also important to note that Malaysia has signed an avoidance of double taxation agreement with Australia.
Operational considerations
Malaysian trade is relationship-oriented, and therefore, it is important for a foreigner aspiring to conduct business in the country to have a local agent for a positive influence. Prior visitation of the country would help find and create a good relationship with a good agent would be a great strategy to enter the Malaysian market. The local agents will help in handling customs clearance and marketing of the product.
Foreign currency movement
Currency is the medium of exchange accepted at its face value as a payment mode for goods and services. The value of currencies keeps changing from time to time, depending on the country’s economic status. Malaysia uses the Ringgit as its currency as the medium of trade exchange. Australian investors can choose to use the Australian dollar or us dollar for trade. Rebecca’s sea farmed salmons should consider the exchange rate between the currencies before trade in Australia.