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Overview
Financial services are the UK’s main services export to Malaysia and a key growth segment evident by the continuing rise of UK financial services exports to Malaysia in the last 5 years. In 2022, the UK’s top services exports to Malaysia were financial services, pensions and insurance services and other business services.
The Malaysian financial sector is regulated and supervised by Bank Negara Malaysia (BNM) and the Securities Commission (SC) Malaysia. Bank Negara Malaysia is the central bank of Malaysia and has oversight of the banking and insurance sector, and the Securities Commission Malaysia regulates the capital market.
Both regulators place strong emphasis on digitalisation and the green economy transition across the finance sector. This includes strengthening cyber security readiness, greater use of technology for regulation and supervision as well as broadening funding options for financing green and transition solutions towards a net-zero future. There are niche opportunities to provide solutions such as consultancy, data storage and security services.
Trade agreements with Malaysia
The UK has joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade agreement including 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the UK), which entered into force between the UK and Malaysia on 15 December 2024. This means the UK and Malaysia have a free trade agreement for the first time.
CPTPP entry into force and ratification
As of 24 December 2024, CPTPP is in force between the UK and:
- Australia
- Brunei
- Chile
- Japan
- Malaysia
- New Zealand
- Peru
- Singapore
- Vietnam
This means that the UK can access CPTPP provisions with said countries.
The following countries have not yet ratified the terms of the UK’s accession:
Canada and Mexico.
This means that the UK cannot yet access CPTPP provisions with those countries.
This guidance will be updated following each of the remaining countries’ ratification of the terms of the UK’s accession to CPTPP and will include when CPTPP will enter in force between the UK and the relevant remaining country.
Financial Services
The UK joining CPTPP brings significant benefits for the UK Financial Services. All of these go beyond existing commitments under the World Trade Organization (WTO).
There are also a far broader range of commitments and benefits under CPTPP which enable UK financial services providers to do business in and with Malaysia with even greater confidence. Under CPTPP, UK investors will be treated the same as domestic investors when disposing of financial institutions or investing in financial institutions in Malaysia.
There are also additional legal guarantees on authorisation processes, including:
- a commitment for Malaysian regulators to make decisions on UK business’ applications for authorisation to supply financial services within 120 days of a completed application being submitted
- commitments that help encourage more dynamic business models through provisions on the performance of back-office functions and avoiding restrictions on residency requirements
- obligations permitting the supply of cross-border portfolio management services
Electronic contracts and paperless trading
As members of CPTPP, the UK and Malaysia have made commitments on trade conducted through digital means. These commitments can support you across the financial services sector.
Opportunities for digital trading
Electronic authentication and electronic signatures
Electronic signatures and electronic authentication increase trust in e-commerce by helping to verify that transactions, and the people behind them, are genuine. Strengthening the legal validity of electronic signatures provides greater confidence that transactions can be concluded through electronic means.
By using electronic signatures and/or electronic authentication, you can complete transactions in a matter of minutes regardless of where your counterpart is, reducing costs and simplifying processes.
CPTPP ensures that electronic signatures are considered valid by all CPTPP countries, and individuals and businesses can confidently use them.
However, CPTPP countries might impose specific criteria regarding electronic signatures, including some circumstances where electronic signatures are not accepted. You should check local regulations for more information.
You have the freedom to determine the best way of authenticating your transaction. However, for some transaction categories, there can be specific requirements.
Investment Protection and Liberalisation
If UK Financial Services firms are considering expansion into Malaysia, they will also benefit from the investment protections which the UK and Malaysia have committed to as part of CPTPP which will make it easier for investment to move in both directions.
Joining CPTPP means the UK will be gaining investment liberalisation commitments from Malaysia for the first time. CPTPP includes investment liberalisation provisions that will help to further deepen the UK and Malaysia’s investment relationship, by limiting additional barriers to overseas investment and making it easier for UK investors to establish and operate in Malaysia.
Investors will now benefit from:
- investment protections that will guarantee the treatment investors can expect to receive when investing and operating in Malaysia, and will protect them from discriminatory, unfair, or arbitrary treatment
- greater control over business operations and recruitment
- prohibitions on certain market access limitations, this ensures effective market openness and will provide investors with certainty and transparency when investing into Malaysian markets
Easier business travel
Temporary entry provisions in the CPTPP agreement support the temporary movement of professionals to deliver services and invest in businesses in person. Joining CPTPP will support economic growth, innovation, and collaboration between the UK and Malaysia by making temporary movement of professionals easier.
These benefits give you more options and flexibility for business travel, as well as often allowing them longer periods of stay in other countries to carry out business activities.
CPTPP recognises the following categories of businesspersons in Malaysia:
- Business Visitors (including Investors)
- Installer and Servicer
- Intra-corporate Transferees
- Independent Professionals
- Contractual Service Suppliers
In addition, for all categories of businessperson, excluding Business Visitors and Installer and Servicer, Malaysia may allow accompanying spouses and children the ability to enter Malaysia for the same length of time as the covered businessperson. Accompanying spouses may also apply for the right to work while residing in Malaysia, subject to meeting the relevant requirements and approval by the Government of Malaysia.
Trade in services
One of the main deterrents to services trade is uncertainty over the terms of trade. Accession to CPTPP provides legal certainty to UK service suppliers by binding existing commitments, guaranteeing existing market access, and providing clarity on rules through improved regulatory transparency commitments. This gives you certainty on their terms of trade across a wide range of economic sectors.
The agreement provides guarantees for market access and fair treatment for service suppliers, domestic regulation commitments, legal services through PBS annex, and includes an express delivery services annex that encourages open markets for UK express delivery suppliers and ensures regulators are independent and impartial.
These modern rules remove barriers to market access and ensure you will be treated no less favourably than local services and service suppliers as well as no less favourably than those from any other CPTPP member or any other country.
Doing business in Malaysia
Malaysia stands as a crucial economic partner for the UK. With a rapidly growing economy and a commitment to open trade, Malaysia has become an attractive market for UK businesses.
In the past year, UK exports to Malaysia have shown significant growth, with goods exports increasing by 8.5% to £3.3 billion in the four quarters to the end of Q2 2023. Of all UK exports to Malaysia in the 4 quarters to the end of Q2 2023, £1.8 billion (55.2%) were goods and £1.5 billion (44.8%) were services.
The World Bank Doing Business Report 2020 ranked Malaysia as the 12th easiest country to do business with, and the UK joining CPTPP supports and enhances the range of opportunities open to UK businesses across a range of sectors in Malaysia.
Malaysia has a variety of government initiatives to support the transition to a digital economy, which present opportunities for UK companies to capitalise on. The flourishing trade relationship underscores Malaysia's appeal to UK businesses. Malaysian companies are known for their receptiveness to long-term partnerships, making it a promising market for UK businesses seeking sustainable business alliances.
Department for Business and Trade support
The Department for Business and Trade (DBT) helps businesses export, drives inward and outward investment, negotiates market access and trade agreements, and champions free trade. Helpful links, tools and services available from DBT and wider government include:
Export Support Service (ESS) team
Get support on how to do business abroad. You may also be eligible for 1-2-1 support from a local International Trade Adviser. Businesses in Wales can also access support from Business Wales.
Export Support Service – International Markets (ESS-IM)
DBT's overseas in-market export support service for SMEs with high-export potential. Our International Market Advisers provide tailored support and market introduction information to new and current UK exporters looking to enter or expand into new markets. The service may be accessed globally with International Markets teams in South Asia, China, the Middle East, Africa, Eastern Europe, North America and Latin America.
Sign up to access free training on how to grow your international sales.
Information on finance and insurance for UK exports.
Trade and investment factsheets
The latest statistics on trade and investment between the UK and individual overseas partners.
Overseas business risk profiles
Information for UK businesses on political, economic and security risks when trading overseas.
Advice and warnings about travel abroad, including entry requirements, safety and security, health risks and legal differences.
Check or report a trade barrier
If you encounter an issue when exporting to any country – report the issue and UK government officials will be able to assess the issue and consider the options we have open to addressing it as appropriate
Search for your specific product to find applicable tariffs for each market, explore rules of origin and step-by-step help on customs procedures
Check import duties and allows you to check the status of available tariff rate quotas
Useful resources
You can find more information about export opportunities, business culture and any existing trade barriers on our Malaysia market guide.
Prior to export, you must be aware of local regulations and import conditions in Malaysia that apply to your goods or services. This can include tax considerations, labour laws, intellectual property rules, labelling and packaging regulations, among others.
To seek further information related to local regulations, business culture, or to find a local lawyer, translator, importer or distributor, you can use the following contacts:
- DBT’s Export Support Service International Markets team
- get in touch with DBT at the local British Embassy
- get in touch with the British Chamber of Commerce in Malaysia
To see information on political, economic and security risks when trading with Malaysia, please see: