Operating a Malaysia Private Limited Company (Sdn. Bhd.)
Importing from China into a Malaysian Warehouse, Then Exporting Overseas
Complete Business Guide to Importing · Warehousing · Exporting · Accounting · Tax Compliance
When a Malaysian Private Limited Company (Sdn. Bhd.) purchases goods from China, imports them into a warehouse in Malaysia for storage, sorting, packing, or order fulfilment, and subsequently sells and exports them to Singapore, the United States, Europe, Australia, the Middle East, or other overseas markets, this is a typical:
Import → Warehouse → Export / Re-export
international trading model.
From the very first transaction, the company should establish a complete commercial audit trail:
China Purchase → Company Payment → Malaysia Import → Customs Clearance → Warehouse Receiving → Inventory Management → Overseas Sale → Export Declaration → International Shipping → Overseas Customer Delivery → Company Collection → Accounting Records → Corporate Tax Filing Phase 1 | Purchasing from China
Step 1 | Obtain Purchasing Documents from the Chinese Supplier
When purchasing from a Chinese supplier, the company should, as far as possible, obtain:

• Quotation
• Proforma Invoice
• Purchase Order
• Supplier Invoice / Commercial Invoice
• Purchase Agreement (where applicable)
• Packing List
• Supplier Company Information
• Chinese VAT Invoice (where applicable)

Supplier documents should preferably state:

• Supplier Name
• Buyer: Malaysian Sdn. Bhd. company name
• Invoice Number
• Invoice Date
• Product Description
• Quantity
• Unit Price
• Total Amount
• Currency
• Payment Terms

If the supplier documents are only available in Chinese, retain:
Original Chinese Documents + English Translation / Purchase Summary
Do not alter the original supplier documents. Phase 2 | Paying the Chinese Supplier
It is advisable to pay the Chinese supplier directly from the:
Malaysian Sdn. Bhd. Corporate Bank Account
Retain:

• Telegraphic Transfer (TT)
• SWIFT Record
• Bank Remittance Advice
• Company Bank Statement
• Supplier Receipt
• Payment Voucher

The company should ultimately be able to establish:
Purchase Order → Supplier Invoice → Company Payment → Bank Statement
as a complete payment trail. Phase 3 | Shipping from China to Malaysia
Once the goods are shipped from China, retain:

• Commercial Invoice
• Packing List
• China Export Documents (where applicable)
• Bill of Lading (B/L)
• Air Waybill (AWB)
• Freight Documents
• Insurance Documents
• Certificate of Origin (where applicable)
• Freight Forwarder Documents

The product description, quantity, and value should reasonably correspond with the purchasing documents. Phase 4 | Malaysia Import Customs Clearance
When the goods enter Malaysia, customs declarations must be made according to the actual products being imported.
It is advisable to retain:

• Customs Import Declaration
• Customs Form K1
• HS Code
• Import Permit (where applicable)
• Customs Duty
• Sales Tax on Import (where applicable)
• Customs Agent Invoice
• Freight Forwarder Invoice
• Port / Terminal Charges
• Transportation Charges

HS Code Is Extremely Important
Different products may be subject to completely different requirements relating to:
Import Duty
Sales Tax
Import Permits
Government Approvals
Before commencing large-scale imports, it is therefore advisable to first confirm the applicable HS / Tariff Code and assess the related import tax and licensing requirements. Phase 5 | Import Duty and Sales Tax
This is one of the most important areas for an Import → Warehouse → Export business model.
The fact that goods are imported from China into Malaysia with the intention of later exporting them does not automatically mean that no taxes are payable at the time of importation.
The company should assess:
What are the goods?
What is the HS Code?
Are the goods taxable?
What Import Duty rate applies?
What Sales Tax rate applies?
Does an exemption apply?
Is a drawback available?
Is a special customs or warehousing arrangement being used?
Before establishing a long-term import, warehousing, and re-export operation, it is advisable to have a Customs Agent / Tax Adviser assess the most suitable customs arrangement based on the goods and actual logistics model. Phase 6 | Goods Entering the Malaysian Warehouse
After customs clearance, the goods may enter a:
Company Warehouse / Third-Party Warehouse / Fulfilment Centre
The company should establish proper inventory records.
Retain:

• Warehouse Receiving Record
• Goods Received Note (GRN)
• Warehouse Inventory Report
• Stock Card
• Product SKU
• Quantity Received
• Receiving Date
• Storage Location

For example:
Quantity Purchased from China: 10,000 units
Actual quantity received by the Malaysian warehouse:
9,980 units
If there is a shortage of 20 units, the company should investigate whether it resulted from:

• Supplier Short Shipment
• Shipping Damage
• Customs Inspection
• Lost Goods
• Quantity Error

The company should not simply record 10,000 units as final inventory based solely on the Supplier Invoice without actual receiving records. Phase 7 | Calculate the Cost of Imported Inventory Correctly
The cost of inventory is not necessarily limited to the purchase price shown on the Chinese supplier's Invoice.
Depending on the applicable accounting treatment, inventory cost may include:
Purchase Price
plus:

• Freight
• Insurance
• Import Duty
• Customs / Clearing Costs
• Other costs directly attributable to bringing the inventory to its present location and condition

The accountant should determine the appropriate classification based on the actual circumstances.
Whether certain administrative, selling, storage, or other costs should be included in Inventory Cost should be assessed under the applicable accounting standards and based on the nature of the expense.
Therefore:
Purchase Price ≠ Final Accounting Inventory Cost Phase 8 | Establish an Inventory Management System
Inventory records are particularly important for an import and re-export trading company.
At a minimum, the company should track:
Opening Stock
+ Purchases / Imports
− Export Sales / Goods Sold
− Returns / Damaged Goods
− Stock Adjustments
= Closing Stock
For example:
Opening Stock: 0
Import: 10,000 units
Export: 6,000 units
Damaged: 100 units
Closing Stock:
3,900 units
At financial year-end, the accountant will use the inventory records to calculate:
Cost of Goods Sold (COGS)
Inventory records therefore directly affect the company's reported profit and income tax computation. Phase 9 | Obtain Overseas Customer Orders
When overseas customers place orders, retain:

• Quotation
• Proforma Invoice
• Purchase Order
• Sales Agreement
• Customer Order
• Distribution Agreement (where applicable)

Recommended customer information includes:

• Company Name
• Registration Number (where applicable)
• Country
• Business Address
• Contact Person
• Delivery Address
• Tax Information (where applicable)

Phase 10 | Issue Sales Invoices from the Malaysian Company
The Malaysian Sdn. Bhd. should issue a formal:
Sales Invoice / Commercial Invoice
to the overseas customer.
The invoice should include:

• Malaysian Company Name
• SSM Registration Number
• Invoice Number
• Invoice Date
• Foreign Customer
• Product Description
• Quantity
• Unit Price
• Total Amount
• Currency
• Payment Terms
• Company Bank Details
• Shipping Terms / Incoterms (where applicable)

For example:
INV-2026-001
INV-2026-002
INV-2026-003
Invoice records should remain sequential, clear, and properly maintained. Phase 11 | Pay Attention to Malaysia's e-Invoice Requirements
If the company has entered the implementation scope of Malaysia's e-Invoice regime, the relevant sales transactions should be handled in accordance with the prevailing LHDN / MyInvois requirements.
A traditional:
Commercial Invoice / PDF Invoice
and an:
LHDN e-Invoice
are separate compliance concepts that need to be understood independently.
Therefore, sending a Commercial Invoice to an overseas customer does not automatically mean that the company's e-Invoice obligations have been fulfilled. Phase 12 | Exporting Goods from Malaysia
When goods are exported from the Malaysian warehouse, the company should prepare and retain:

• Commercial Invoice
• Packing List
• Customs Export Declaration
• Bill of Lading
• Air Waybill
• Courier Documents
• Freight Forwarder Documents
• Export Permit (where applicable)
• Certificate of Origin (where applicable)
• Insurance Documents
• Overseas Delivery Record

These documents help demonstrate that:
Inventory previously imported into Malaysia was subsequently exported overseas. Phase 13 | Import and Export Inventory Must Be Reconciled
This is a critical aspect of the Import → Warehouse → Export business model.
For example:
China Import
Product A: 10,000 units
↓
Malaysia Warehouse
Received: 10,000 units
↓
Export Shipment 1
Singapore: 2,000 units
Export Shipment 2
Australia: 3,000 units
Export Shipment 3
USA: 4,000 units
↓
Closing Stock
Malaysia: 1,000 units
The accounting, inventory, and logistics systems should be able to reasonably trace:
Where the goods came from → Which warehouse received them → Who they were sold to → How many were exported → How many remain Phase 14 | Receiving Payment from Overseas Customers
It is advisable for overseas customers to make payment directly into the:
Malaysian Sdn. Bhd. Corporate Bank Account
Retain:

• Customer Remittance Advice
• SWIFT Record
• International Transfer Record
• Bank Credit Advice
• Company Bank Statement

This establishes:
Customer Order → Sales Invoice → Export → Customer Payment → Company Bank Account
as a complete sales transaction trail. Phase 15 | Accounting for Foreign Currency Transactions
Import purchases may be denominated in:
CNY / USD
Export sales may be denominated in:
USD / SGD / EUR / AUD / GBP
while the Malaysian company's accounting records are generally maintained in:
MYR
The company should therefore retain:
Foreign Currency Invoice + Payment / Receipt + Bank Statement + Exchange Rate Record
If exchange rates change between the transaction date and the payment or receipt date, the accountant will account for the relevant:
Foreign Exchange Gain / Loss
in accordance with the applicable accounting principles. Phase 16 | Export Revenue ≠ Taxable Profit
For example, if the company records annual export sales of:
RM2,000,000
this does not mean that corporate income tax is calculated directly on RM2,000,000.
The general concept is:
Sales Revenue
less:
Cost of Goods Sold
less:
Qualifying Business Expenses
then adjusted for:
Tax Adjustments
to arrive at:
Taxable Profit
Corporate Income Tax is then calculated based on the applicable tax rules and rates. Phase 17 | Business Costs That May Be Recorded
Genuine costs relating to the import and export business should be properly documented.
Product Costs

• Supplier Purchases
• Freight
• Insurance
• Import Duty
• Clearing Charges

Warehousing & Logistics

• Warehouse Rental
• Fulfilment Fees
• Local Transportation
• Export Freight
• Courier
• Port Charges

Selling Costs

• Marketplace Commission
• Payment Gateway Fees
• Advertising
• Sales Commission

Company Operating Costs

• Office Rental
• Salaries
• Accounting Fees
• Company Secretarial Fees
• Software
• Bank Charges
• Professional Fees

Whether a particular expense qualifies for a tax deduction should be determined according to the nature of the expense and prevailing Malaysian income tax rules. Phase 18 | Sales Tax and Income Tax Must Be Understood Separately
Sales Tax
Generally relates to:
Importation of goods / certain taxable manufacturing activities in Malaysia
and is administered by the Royal Malaysian Customs Department (RMCD).
Corporate Income Tax
Primarily relates to:
The company's ultimate taxable profit
and is administered by LHDN / HASiL.
Therefore:
Paying Sales Tax on importation
does not mean:
The company has already paid Corporate Income Tax.
They are separate tax regimes. Phase 19 | Consider Re-export / Drawback / Customs Facilitation
If the company's long-term business model involves:
Large-Scale Imports from China → Warehousing in Malaysia → Majority of Goods Re-exported
it is advisable to have a Customs Agent / Tax Adviser specifically evaluate whether the company may benefit from:

• Sales Tax Drawback
• Customs Duty Drawback
• Sales Tax Exemption
• Licensed Warehouse
• Free Zone
• Licensed Manufacturing Warehouse (where manufacturing is involved)
• Other applicable Customs Facilitation arrangements

Eligibility and conditions vary depending on the arrangement.
Do not assume that a tax refund or exemption will definitely be available and price your business model based on that assumption.
Confirm eligibility first, then determine the most suitable supply chain structure. Phase 20 | Perform a Monthly Three-Way Reconciliation
The company should ideally reconcile three areas every month:
① Goods Flow
Import → Warehouse → Export → Closing Stock
② Money Flow
Supplier Payment → Customer Collection → Bank Statement
③ Document Flow
Purchase Invoice → Customs Documents → Sales Invoice → Export Documents
All three should reasonably correspond with one another. Complete Compliance Trail for Import → Warehouse → Export
① China Supplier
↓
② Purchase Order / Supplier Invoice
↓
③ Company Payment
↓
④ China Shipping
↓
⑤ Malaysia K1 Import Declaration
↓
⑥ Import Duty / Sales Tax (where applicable)
↓
⑦ Warehouse Receiving
↓
⑧ Inventory Record
↓
⑨ Foreign Customer Order
↓
⑩ Sales Invoice / e-Invoice
↓
⑪ Malaysia Export Declaration
↓
⑫ International Shipping
↓
⑬ Overseas Customer Delivery
↓
⑭ Customer Payment
↓
⑮ Company Bank Statement
↓
⑯ Accounting & Inventory Reconciliation
↓
⑰ Financial Statements
↓
⑱ Corporate Tax Filing Most Important Advice for Import and Re-export Businesses
The compliance foundation of this type of business can be summarised in four questions:
Where did the goods come from?
Where were the goods stored after entering Malaysia?
Who ultimately purchased the goods, and where did they go?
Where did the purchase payments go, and where did the sales proceeds come from?
The company should establish four sets of records that can be cross-verified:
Goods Flow
Money Flow
Document Flow
Inventory Flow
When these four sets of records correspond with one another, the company will be in a much stronger position when dealing with:
LHDN Tax Reviews
RMCD Customs Reviews
Bank KYC / CDD / AMLA Reviews
Company Audits
Financing Applications
Investor Due Diligence
Important Reminder: Import Duty, Sales Tax, licensing requirements, FTA treatment, drawback arrangements, and customs facilitation measures depend heavily on the product's HS Code, country of origin, import method, warehousing location, and subsequent use of the goods. Before commencing large-scale imports, the actual products and supply chain should be reviewed by a qualified Customs Agent based on the specific facts and documentation.