KUALA LUMPUR: Malaysia’s proposed new E-Commerce Bill should require foreign e-commerce platforms operating in the country to establish a local presence and comply with domestic laws, taxation and product standards, said Entrepreneur and Cooperatives Development Minister Steven Sim Chee Keong.
He said the government needed to strike a balance between protecting local businesses from unfair competition and maintaining Malaysia’s position as an open economy.
“The baseline is that e-commerce entities operating in Malaysia should have a local presence and comply with local taxation, local laws, local guidelines and local standards,” he said at Grant Thornton Tax Seminar on Budget 2027 here today.
Sim said the Ministry of Entrepreneur and Cooperatives Development (KUSKOP) was working with the Ministry of Domestic Trade and Cost of Living (KPDN), which is responsible for the proposed legislation, and providing input as the Bill was still being drafted.
He said the Finance Ministry, KPDN and KUSKOP had discussed the regulation of e-commerce platforms about a month ago, including the need for foreign operators to comply with Malaysian taxation, sales and service tax (SST), customs requirements and other domestic laws.
“First, they should have a local entity so that they comply with Malaysian taxation, SST, customs requirements and other local laws,” he said.
Foreign platforms must also ensure that products sold through their services meet Malaysia’s applicable standards, he said.
“If you bring in electrical or electronic products, there are standards such as SIRIM. Food products also need to comply with the relevant health and safety requirements,” he said.
Sim said the government’s approach was guided by what he called the three Es: enforcement, empowerment and enactment.
Enforcement involves ensuring businesses operating in Malaysia comply with local laws, while empowerment focuses on helping domestic businesses improve productivity and competitiveness. Enactment involves reviewing policies and legislation to create a more level playing field.
He said micro, small and medium enterprises (MSMEs) accounted for 96% of businesses registered in Malaysia, contributed about 40% of the economy and employed roughly half of the country’s workforce.
“We cannot just protect them and allow them to continue doing business exactly the same way they did 50 years ago. They must transform and improve productivity,” he said.
Sim cautioned against treating foreign e-commerce platforms as a threat that required Malaysia to close its market, noting that international trade was reciprocal.
“The moment you close your door to your trade partners, they can close their door to you. Global trade is reciprocal,” he said.
He said the objective was to establish clear guidelines and safeguards that would allow technology and cross-border commerce to develop while ensuring Malaysian businesses and consumers were protected.
“The question is how we create guidelines and guardrails to ensure that technology serves Malaysian interests,” he said.
