Retailers seek local incorporation and import duties for foreign e-commerce
MRCA has proposed capital requirements of RM10 million for foreign platforms and RM1 million for foreign merchants and retailers.
The Malaysia Retail Chain Association (MRCA) said it has submitted proposals to the Ministry of Finance (MOF) seeking tighter requirements for foreign e-commerce businesses, including local incorporation, capital thresholds and an additional duty on low-value imports.
The association said overseas platforms selling aggressively priced goods put domestic retailers at a disadvantage. Local businesses bear costs including rent, wages, statutory contributions, taxes and certification, it said, warning that unchecked cross-border imports could cause business closures and job losses.
Under its platform proposal, foreign operators would need a Malaysian office and minimum paid-up capital of RM10 million, and would not qualify for preferential SME tax rates. MRCA also proposed requiring at least one foreign director, verification of product compliance, including Sirim and Ministry of Health certifications, and storage of consumer data on servers in Malaysia.
Platforms would also have to meet a quota for Malaysian merchant participation and help local businesses export. The association suggested incentives for “Buatan Malaysia” products, including lower commissions. A separate proposal would extend the requirements to foreign merchants and retailers, with minimum paid-up capital of RM1 million and mandatory foreign directorship.
For low-value goods, MRCA recommended keeping the 10% sales tax and imposing an additional RM10 import duty per category of imported item covered by the regime.
It also proposed a National E-Commerce Fair Competition Council involving multiple agencies. The council would issue a yearly Malaysia E-Commerce Fair Competition Report covering sales by platforms, participation by SMEs and rates of product violations.
