1. A bonded warehouse is a warehouse in which duty on goods stored within need not be paid until the goods are removed from the warehouse. A bonded warehouse is referred to by Malaysian Customs as a ‘Gudang Berlesen Awam’ or Licenced General Warehouse.
2. A bonded warehouse is therefore a duty free zone, akin to a port. It is usually fenced and has high security. The warehouse operator normally gives a ‘bond’ or more usually nowadays a bank guarantee (instead of a cash deposit in the old days) to customs to guarantee that there will be no loss of revenue to customs should any of the goods stored within be inadvertently released from the bonded area. In Malaysia, a license from customs is required before a public bonded warehouse can begin operatio ns.
VALUE-ADDED
The following value-added activities can be performed on stored goods in all licensed warehouses:
i. warehousing dutiable goods;
ii. break bulking - where goods are released from a warehouse in smaller quantities;
iii. repacking - where homogeneous goods being packed in smaller or larger quantities, or packing of various types of goods into a set;
iv. relabelling – where goods are being relabelled, for example with importers or distributors name before distributing them locally;
v. devenning - where goods are allowed to be sold directly to a buyer in a warehouse either duties and/or tax on the goods have been paid or not;
vi. consolidation - where goods (dutiable and locally sourced) are consolidated for export;
vii. entreport trade - where imported goods are to be re- exported;
viii. internal transport (e.g. forklift) and handling charges.
ADVANTAGES
1. BY STORING GOODS IN A BONDED WAREHOUSE, TRADERS CAN ENJOY SUBSTANTIAL COST SAVINGS THROUGH THE DEFERMENT OF PAYMENT OF TAX IF THE GOODS ARE NOT IMMEDIATELY REQUIRED WHEN THEY ARRIVE IN THE DESTINATION PORT.
2. DUTY NEED NOT BE PAID ON IMPORTED GOODS WHICH ARE INTENDED FOR REEXPORT.
3. DUTY NEED NOT BE PAID ON GOODS WHICH ARE PRODUCED IN A FREE INDUSTRIAL ZONE PENDING EXPORT IF THEY ARE STORED IN A BONDED WAREHOUSE.
4. NORMALLY, WHEN GOODS ARE IMPORTED INTO THE FREE CIRCULATION OF THE EUROPEAN UNION, VALUE ADDED TAX (VAT) AND CUSTOMS DUTIES SHOULD BE PAID BEFORE THE GOODS CAN BE STORED, WAITING TO BE SOLD.
5. HOWEVER, IT IS ALSO POSSIBLE TO STORE THE GOODS IN A CUSTOMS BONDED WAREHOUSE, WHICH RESULTS IN A POSTPONEMENT FOR AN INDEFINITE PERIOD OF CUSTOMS DUTY/VAT AT IMPORT. IN THIS CASE, CUSTOMS DUTIES AND VAT AT IMPORT ONLY NEED TO BE PAID WHEN THE GOODS ARE ACTUALLY IMPORTED INTO THE FREE CIRCULATION OF THE EU.
6. IF THE CLIENT IS LOCATED IN A NON-EU COUNTRY, THE GOODS CAN BE TRANSPORTED UNDER CUSTOMS BOND FROM THE WAREHOUSE TO THE COUNTRY WHERE THE BUYER IS LOCATED. THEN, CUSTOMS DUTIES AND VAT AT IMPORT ARE SUBSEQUENTLY PAID IN THE COUNTRY OF DESTINATION.
TYPES OF WAREHOUSE
1. Public Bonded Warehouse License - A Public Bonded Warehouse operates as a central storage for the distribution of bonded goods (i.e. goods on which Customs duties and taxes have not been paid) in the country and for international trade, catering for the general public.
2. Private Bonded Warehouse License - A Private Bonded Warehouse is a central storage and distribution centre for bonded goods (i.e. goods on which Customs duties and taxes have not been paid), of the companies and its related companies.
3. A company that wishes to provide public or private bonded warehousing services must apply to the Royal Malaysian Customs Department. The following approvals must be obtained before applying to the Royal Malaysian Customs Department: Approval from DOE when operators store hazardous goods.
LICENSING
1. A Public or Private Bonded Warehouse operator that is licensed under Section 65 of the Customs Act, 1967 can be given permission to act as an agent for transacting businesses relating to the import or export of goods that are stored in the licensed warehouse.
2. For this purpose, a warehouse operator is required to obtain a Freight Forwarding Agent/Customs Agent License and/or Shipping Agent License and a Service Tax Licence.
3. The Service Tax Act, 1975 shall apply throughout Malaysia except Langkawi, Tioman, Labuan, Free Zones and ‘Joint Development Area’.
4. Before acquiring a Freight Forwarding Agent/Customs Agent Licence from the Royal Malaysian Customs Department, the company must obtain an International Integrated Logistics Services (IILS) status from MIDA.
EQUITY POLICY
1. Ordinary Warehouse: There is no equity condition imposed by the Royal Malaysian Customs Department. Investors only need to obtain licence from the local authority.
2. Public Bonded Warehouse: A company must have at least 30% Bumiputera equity.
3. Private Bonded Warehouse: There is no equity condition imposed by the Royal Malaysian Customs Department.
(Source: MPC, malaysialand2u, Royal Malaysian Customs)
