Malaysia’s Free Trade Zones (FTZs) offer tax advantages, customs exemptions, and simplified logistics for global businesses. Learn how they work and where to invest.
Introduction
If you're an international manufacturer or exporter exploring Southeast Asia, Malaysia’s Free Trade Zones (FTZs) provide a compelling proposition. Strategically located near ports and airports, these tax-incentivized areas offer reduced operating costs, faster customs processing, and improved regional connectivity.
Here’s a breakdown of Malaysia’s FTZ framework, key locations, and why they’re ideal for foreign investors and global supply chain players.
What is a Free Trade Zone (FTZ)?
A Free Trade Zone in Malaysia is a designated area where:
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Import duties and sales tax are exempted
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Goods can be imported, manufactured, and exported without customs duties
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Customs procedures are simplified
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Export-oriented activities are prioritized
Key Benefits for Investors
| Benefit | Description |
|---|---|
| Duty-Free Imports | No import duties on raw materials and machinery |
| Seamless Re-Exports | Easy re-export of goods without complex taxes |
| Proximity to Ports & Airports | Located near key logistics hubs |
| Lower Operational Costs | Enjoy corporate tax incentives & exemptions |
| Ideal for Global Supply Chains | Quicker turnaround and border clearance |
Top Free Trade Zones in Malaysia
Port Klang Free Zone (PKFZ) – Selangor
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Next to Westport & Northport
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Major hub for e-commerce, logistics, and light assembly
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Offers warehousing, BTS facilities, and port access
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Ideal for international distribution and supply chain consolidation
Bayan Lepas FTZ – Penang
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Near Penang International Airport
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Electronics and semiconductor hub
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Close to Bayan Lepas Industrial Park
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Suitable for high-tech and precision industries
Pasir Gudang & Tanjung Pelepas FTZ – Johor
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Linked to Johor Port and PTP
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Strong for petrochemicals, maritime, and O&G
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Accessible to Singapore via road and sea
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Great for cross-border trade and heavy industry
Senai Airport Free Industrial Zone – Johor
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Located next to Senai International Airport
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Focus on air cargo, light manufacturing, and logistics
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Growing zone for FMCG and automation-ready businesses
Industries That Benefit Most
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Electronics & Semiconductors
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Medical Devices & Pharmaceuticals
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Automotive Parts
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Logistics & Freight
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Oil & Gas Processing
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Cold Chain Storage
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Export-based Manufacturers
Basic Requirements for FTZ Setup
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Company incorporation in Malaysia
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Application via Malaysian Investment Development Authority (MIDA)
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Site approval from Royal Malaysian Customs Department
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Compliance with environmental, BOMBA, and local zoning laws
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Export commitment (usually >80% production for export)
Why Global Companies Choose Malaysia FTZs
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Strategic location between China, India, ASEAN
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Dual access to East–West shipping routes
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Stable government incentives for exporters
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Reliable infrastructure & skilled workforce
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Competitive costs compared to Singapore, Thailand
Need Help Finding FTZ Land or Factory?
Terra Group helps international clients:
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Find ready-built factories or land within FTZ zones
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Handle approvals from MIDA, Customs, and BOMBA
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Secure BTS or long-term lease options near ports and airports
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Navigate licensing and tax exemption processes
Contact us or explore listings at terragroup.my
