MALAYSIA
Since May 1987, as amended in July 2012
Pillar Intellectual Property Rights (IPRs) |
Indicator Copyright law with clear exceptions
Copyright Act of 1987
Malaysia has a clear regime of copyright exceptions that follows the fair dealing model, which enables the lawful use of copyrighted work by others without obtaining permission (Copyright Act of 1987). Arts. 9-13 list the exceptions, including purposes of research, private study, criticism, review or the reporting of news or current events, among others.
Coverage Horizontal
Sources
- https://web.archive.org/web/20230410051310/https://www.cric.or.jp/db/link/doc/malaysiaCopyrightAct1987asat1-7-2012.pdf
- https://web.archive.org/web/20231027182258/https://www.wipo.int/edocs/lexdocs/laws/en/my/my081en.pdf
- https://web.archive.org/web/20231204131905/http://infojustice.org/wp-content/uploads/2015/03/fair-use-handbook-march-2015.pdf
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MALAYSIA
Reported in 2022, last reported in 2023
Pillar Intellectual Property Rights (IPRs) |
Indicator Enforcement of copyright online
Lack of adequate enforcement of copyright online
Copyright is not adequately enforced online in Malaysia. It is reported that online piracy, including book and journal piracy, remains a challenge for rights holders.
Coverage Horizontal
MALAYSIA
ITA signatory?
I
II
Pillar Tariffs and trade defence measures applied on ICT goods |
Indicator Effective tariff rate on ICT goods (applied weighted average)
Effective tariff rate to ICT goods (applied weighted average)
1.4%
Coverage rate of zero-tariffs on ICT goods (%)
69.94%
Coverage: ICT goods
Sources
- http://wits.worldbank.org/WITS/
- https://www.wto.org/english/news_e/brief_ita_e.htm#:~:text=ITA%20participants%3A%20Australia%3B%20Bahrain%3B,%3B%20Jordan%3B%20Korea%2C%20Rep.
- https://www.wto.org/english/res_e/booksp_e/ita20years_2017_full_e.pdf
- https://web.archive.org/web/20220120054410/https://trade.ec.europa.eu/doclib/docs/2016/april/tradoc_154430.pdf
- https://www.wto.org/english/tratop_e/inftec_e/itscheds_e.htm
MALAYSIA
Since March 1997
Since December 2015
Since December 2015
Pillar Tariffs and trade defence measures applied on ICT goods |
Indicator Participation in the WTO Information Technology Agreement (ITA) and 2015 expansion (ITA II)
Information Technology Agreement (ITA)
ITA Expansion Agreement (ITA II)
ITA Expansion Agreement (ITA II)
Malaysia is a signatory of the World Trade Organization (WTO) Information Technology Agreement (ITA) of 1996 and its 2015 expansion (ITA II).
Coverage ICT goods
Sources
- https://www.wto.org/english/news_e/brief_ita_e.htm#:~:text=ITA%20participants%3A%20Australia%3B%20Bahrain%3B,%3B%20Jordan%3B%20Korea%2C%20Rep.
- https://www.wto.org/english/res_e/booksp_e/ita20years_2017_full_e.pdf
- https://web.archive.org/web/20220120054410/https://trade.ec.europa.eu/doclib/docs/2016/april/tradoc_154430.pdf
- https://www.wto.org/english/tratop_e/inftec_e/itscheds_e.htm
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MALAYSIA
Reported in 2014, last reported in 2023
Pillar Public procurement of ICT goods and online services |
Indicator Other limitations on foreign participation in public procurement
Margin of preference for domestic suppliers
It is reported that while price considerations are important in concluding a government contract, the "value for money" concept includes non-price factors and broader policy considerations, such as accelerating economic growth through procurement, maximising the use of local materials and resources, promoting local freight and insurance, transferring technology, and providing incentives for indigenous entrepreneurs (Bumiputera). Bumiputera suppliers benefit from a preference margin of 2.5% to 10%, inversely proportional to the contract value, for goods and services contracts valued between MYR 100,000 (approx. USD 23,500) and MYR 15 million (approx. USD 3.5 million), with no preferences for contracts above MYR 15 million. For locally made goods by Bumiputera manufacturers, the preference margin is 10% for contracts below MYR 10 million (approx. USD 2.3 million), up to 5% for contracts between MYR 10 million and MYR 100 million, and 3% for contracts above MYR 100 million. This practice has persisted since 1995. Additionally, it is reported that all individuals, companies, or corporate bodies intending to participate in government procurement of works, supplies, and services must be approved by and registered with the Ministry of Finance. Procurement often involves middlemen rather than direct dealings with the governmental entity or is negotiated rather than tendered.
Coverage Horizontal
Sources
- https://web.archive.org/web/20230210002549/https://www.wto.org/english/tratop_e/tpr_e/s436_e.pdf
- https://web.archive.org/web/20240808090040/https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/TPR/S436R1.pdf&Open=True
- https://web.archive.org/web/20241209191545/https://trade.ec.europa.eu/access-to-markets/en/barriers/details?isSps=false&barrier_id=11404
- https://web.archive.org/web/20230919071332/https://ustr.gov/sites/default/files/2015%20NTE%20Combined.pdf
- https://web.archive.org/web/20221220004845/https://ppp.treasury.gov.my/topik/fail/4/muat-turun
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MALAYSIA
Reported in 2022, last reported in 2023
Pillar Public procurement of ICT goods and online services |
Indicator Other limitations on foreign participation in public procurement
Restriction in public procurement
It is reported that all individuals and enterprises intending to do business with the Malaysian Government must register with the relevant authorities: the Ministry of Finance (MOF) for goods and services and the Construction Industry Development Board (CIDB) for works, to obtain their Contractor Registration Certificate (PPK) and Government Procurement for Works Certificate (SPKK). Penalties for non-compliance or substandard performance include suspension of registration for up to five years, effectively barring opportunities to compete for government contracts during that period. While exemptions from registration exist under certain circumstances, subject to the approval of MOF/CIDB, tender deposits may not be waived for international bidders. Registered local suppliers and contractors are exempt from tender deposit requirements, whereas foreign bidders must provide deposits ranging from MYR 60,000 (approx. 13,000 USD) to MYR 1 million (approx. 212,000 USD). Additionally, successful bidders must provide performance bonds issued by financial institutions licensed to operate in Malaysia. While this policy is widely reported, no specific official text detailing these practices has been found online.
Coverage Horizontal
MALAYSIA
Reported in 2021, last reported in 2023
Pillar Public procurement of ICT goods and online services |
Indicator Other limitations on foreign participation in public procurement
Domestic preference in bidding
It is reported that Malaysia has traditionally used government procurement contracts to support national public policy objectives, including encouraging greater participation of Bumiputera (the majority Malay ethnic group) in the economy, transferring technology to local industries, reducing the outflow of foreign exchange, creating opportunities for local companies in the services sector, and enhancing Malaysia’s export capabilities. Consequently, Malaysia generally invites international tenders only when domestic goods and services are unavailable or, in other cases, it provides set-aside contracts for Bumiputera suppliers and contractors and applies preferential price margins to enhance the competitiveness of Bumiputera bidders. Often, foreign companies find they need to take on a local, Bumiputera-qualified partner before their tenders will be considered. While this policy is widely reported, no specific official text detailing these practices has been found online.
Coverage Horizontal
Sources
- https://web.archive.org/web/20230331215014/https://ustr.gov/sites/default/files/2023-03/2023%20NTE%20Report.pdf
- https://web.archive.org/web/20230210002549/https://www.wto.org/english/tratop_e/tpr_e/s436_e.pdf
- https://web.archive.org/web/20210310122406/http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=TAD/TC/WP(2018)2/FINAL&docLanguage=En
- https://web.archive.org/web/20221220004845/https://ppp.treasury.gov.my/topik/fail/4/muat-turun
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MALAYSIA
N/A
Pillar Public procurement of ICT goods and online services |
Indicator Signatory of the WTO Agreement on Government Procurement (GPA) with coverage of the most relevant services sectors (CPC 752, 754, 84)
Lack of participation in the WTO Agreement on Government Procurement (GPA)
Malaysia is not a party to the World Trade Organization (WTO) Agreement on Government Procurement (GPA). However, the country has been an observer of the WTO GPA since 2012.
Coverage Horizontal
MALAYSIA
Since September 1998, entry into force in April 1999, last amended in January 2006
Since September 1998, entry into force in April 1999
Since September 1998, entry into force in April 1999
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Indicator Maximum foreign equity share
Communications and Multimedia Commission Act 1998 [Act 588] (Akta Komunikasi dan Multimedia 1998 (Akta 588))
Guidelines of the Malaysian Communications and Multimedia Commission (MCM)
Guidelines of the Malaysian Communications and Multimedia Commission (MCM)
According to Section 2.1 of the Malaysian Communications and Multimedia Commission (MCMC) Guidelines, foreign applicants must incorporate a local company to obtain a license in the telecom sector. For class licenses, there are no restrictions on foreign equity investment. However, applications for individual licenses are assessed on a case-by-case basis and are subject to certain equity restrictions. While foreign participation in the equity of Network Facility Providers (NFPs) and Network Service Providers (NSPs) can be up to 70% according to government websites, it is reported that in practice, individual licenses often require a minimum 30% Bumiputera (the majority Malay ethnic group) shareholding and foreign shareholding is capped at 49%. These equity restrictions do not apply if the license holder is a publicly listed company but do apply if the licensee is a private limited company held by a public limited company.
Coverage Telecommunications sector
Sources
- https://web.archive.org/web/20231028173110/https://www.mcmc.gov.my/Skmmgovmy/Media/General/Pdf/Act588Bi_3.Pdf
- https://web.archive.org/web/20230326113558/https://www.miti.gov.my/index.php/pages/view/4236
- https://web.archive.org/web/20240113022805/https://www.skmm.gov.my/skmmgovmy/media/General/pdf/Licensing-Guide-Book-310817_Updated.pdf
- https://web.archive.org/web/20230210002549/https://www.wto.org/english/tratop_e/tpr_e/s436_e.pdf
- https://web.archive.org/web/20230919071254/https://ustr.gov/sites/default/files/2022%20National%20Trade%20Estimate%20Report%20on%20Foreign%20Trade%20Barriers.pdf
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MALAYSIA
Reported in 2018, last reported in 2023
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Indicator Maximum foreign equity share
Maximum foreign equity shares
It is reported that Telekom Malaysia, the national telecommunications firm and a major provider of fixed-line and broadband services with an approximate market share of 95%, is subject to a foreign shareholding cap of 30% overall and 5% for individual investors.
Coverage Telekom Malaysia
Sources
- https://web.archive.org/web/20240108223817/https://www.state.gov/reports/2023-investment-climate-statements/malaysia/
- https://web.archive.org/web/20230919071254/https://ustr.gov/sites/default/files/2022%20National%20Trade%20Estimate%20Report%20on%20Foreign%20Trade%20Barriers.pdf
- https://web.archive.org/web/20230210002549/https://www.wto.org/english/tratop_e/tpr_e/s436_e.pdf
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MALAYSIA
Since September 2016, last amended in July 2019
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Indicator Nationality/residency requirement for directors or managers
Companies Act 2016 No. 777
The Companies Act 2016 prescribes the minimum number of directors in a company. Section 196.1 provides that a private company shall have a minimum of one director who ordinarily resides in Malaysia by having a principal place of residence in Malaysia (‘resident director’). For a public company, it shall have a minimum of two resident directors.
Coverage Horizontal
Sources
- https://web.archive.org/web/20231015204143/https://www.ssm.com.my/Pages/Legal_Framework/Companies%20-Act%20-1965-(Repealed)/aktabi_20160915_companiesact2016act777_0.pdf
- https://web.archive.org/web/20241209192524/https://www.accaglobal.com/an/en/student/exam-support-resources/fundamentals-exams-study-resources/f4/technical-articles/mys-comp-act..html
MALAYSIA
Since September 2016, last amended in July 2019
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Indicator Commercial presence requirement for digital services providers
Companies Act 2016 No. 777
A foreign company may carry on business in Malaysia by either incorporating a local company or registering a branch in Malaysia.
Coverage Horizontal
MALAYSIA
Since November 1986
Pillar Intellectual Property Rights (IPRs) |
Indicator Practical or legal restrictions related to the application process for patents
Patents Act 1983
There is no discrimination towards foreign applicants. However, there are restrictions for national applicants wishing to apply for patents internationally. They must file in Malaysia initially before becoming eligible to apply for patents in other countries, two months subsequent to the date of filing, assuming they are not notified by the Malaysian Patent Office.
Coverage Horizontal
Sources
- https://web.archive.org/web/20230204015645/https://www.mirandah.com/patent-system/malaysia/
- https://web.archive.org/web/20211026023312/http://ips.clarivate.com/m/pdfs/dwpicovkinds/malaysia.pdf
- https://web.archive.org/web/20220930215109/https://www.fpapatents.com/malaysia-filing-grant
- https://web.archive.org/web/20231126161614/http://www.myipo.gov.my/wp-content/uploads/2016/09/PATENT-ACT-1983-ACT-291.pdf
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MALAYSIA
Since August 2006
Pillar Intellectual Property Rights (IPRs) |
Indicator Participation in the Patent Cooperation Treaty (PCT)
Patent Cooperation Treaty
Malaysia is a party to the Patent Cooperation Treaty (PCT). However, the country does not consider itself bound by Art. 59 related to disputes.
Coverage Horizontal
