Benefits of Free Trade Zone in Malaysia
1. Deferral, reduction, and elimination of certain types of duties
Free Trade Zone in Malaysia has allowed most duty deferral of any kind of custom program. Hence, it makes it a smoother process for Companies to bring goods into the Free Trade Zone without duties and fees. This also includes exemptions from inventory tax.
2. Duty exemption on re-exports
Free Trade Zone is considered outside the commerce of Malaysia. Hence, Company importing components or raw materials into the Free Trade Zone will not be liable to pay custom duty until it enters the receiving country.
3. Duty elimination on waste, scrape, and yield loss
Since a manufacturer operating in Free Trade Zone does not pay duties on imports until goods leave the Free Trade Zone, it is essentially paying for duties on the raw materials after it is processed.
4. Improved compliance, inventory tracking and quality control
Free Trade Zones in Malaysia allow Companies to work closely in tracking their inventories. By bringing in goods into the Free Trade Zones warehouse a Company owns, it may identify and classify goods at the warehouse instead of at the port.
5. Indefinite storage
A Company can hold its goods indefinitely in Free Trade Zone until a port opens or if there are quotas on the goods.
6. Waived customs duties on zone-to-zone transfers
Free Trade Zones in Malaysia can be used to manage transshipping operations, saving money on manufacturing processing fees. While Companies focused on using Free Trade Zone for export purposes, it can also be used for crossdocking and transferring goods from one Free Trade Zones to another without the need to pay custom duties.