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Winds of Trade – Setting up a Shipping Business in Malaysia

How to Set Up a Shipping Business in Malaysia

Don’t let your profits sail away! 3E Accounting shares how to set up a shipping business in Malaysia successfully.

The recent pandemic has restructured how the world does business. Technology and development have created avenues of commerce that simply didn’t exist before. To get in on the action, you need to know how to set up a shipping business in Malaysia.

Malaysia is considered a Tiger Cub economy. It’s still economically ‘young’, but the potential for development makes it a preferred destination for e-commerce. It has the third-highest Gross Domestic Product (GDP) per capita in ASEAN (the Association of Southeast Asian Nations). Its e-commerce market is projected to reach five billion USD by 2025.


In the Business of Shipping

The term ‘shipping business in Malaysia’ can mean quite a few things. It includes, but is not limited to:

  • A shipping vessel business
  • A transportation business
  • Dropshipping business

Whatever type of business you choose, the first step is to register and incorporate your company. The Companies Commission of Malaysia or Suruhanjaya Syarikat Malaysia (SSM) website has all the details and online application form.

You will also need to be aware of customs requirement as well as taxes and duties. Things like firearms and cocoa pods are prohibited items while live fish and motor vehicles are considered restricted items. Tax and duties are based on the CIF Method – i.e. calculated based on product price and shipping cost. For more detailed information on import, export and tariffs, do check out the Royal Malaysian Customs Department webpage.

If you are considering setting up a business that utilizes a shipping vessel, then visit the Marine Government or Jabatan Laut Malaysia JLM website. You will need to register your vessel, and this can be:

  • Traditional Registration
  • International Registration (MISR)

The Malaysian government requires all vessels to apply for the Domestic Shipping License (DSL), as defined under the Merchant Shipping Ordinance 1952.

DSL includes any goods or passengers transported from one port to another in Malaysia or within Malaysia’s Exclusive Economic Zone (EEZ). Application for DSL can be made online via eDSL. The website also lists the documentation needed to apply for the license.

Your shipping business can also be a transportation business, involving air freight, sea freight and land transport such as trucks. The term ‘shipping’ includes both local distribution and cross-border shipping.

For local distribution, goods are usually stored in Malaysia. In cross-border shipping, the goods will come from another country and will need customs clearance. The business model that works for you will depend on several factors:

  • Where your customer base is located
  • Where your inventory is located
  • Where the most significant volume of your business is
  • The time needed to set up a supply chain

However, by far, the most popular and easiest shipping business to set up is dropshipping. This is a bustling industry as online shopping is booming. It is facilitated by many online platforms such as Lazada and Shopee.

In dropshipping, capital investment and risk are both very low. You don’t need office premises, product inventory or even staff. You just need people to buy from your website and provide customer service. For instance, you make money from the price difference between what the customer pays you and what you pay the supplier.

To get started, you will need:

  • An e-commerce licence
  • A website
  • Product(s) and Supplier(s)
  • Serious marketing via Search Engine Optimization (SEO) or Facebook advertising, etc

Here’s how dropshipping works:

  • Customer orders and pays you via your website
  • You pay the supplier and send customer’s details and order
  • Supplier packs and ships directly to the customer


Time to Ship Out

Starting a shipping business in Malaysia is a very viable option. 3E Accounting has the necessary expertise to handle all your business needs. Company incorporation, rental of serviced suites, website design and development, are just some of the services offered.

Contact 3E Accounting today for a great start to your shipping business.

How to Set Up a Shipping Business in Malaysia