Open a Company for Tobacco Manufacturing in Malaysia
Updated on Monday 16th September 2019
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Malaysia has implemented a number of tobacco control measures. However, despite the increased health risk awareness tobacco sales remain substantial as, in fact, throughout the world. Investors who set up a company for the manufacture of tobacco products in Malaysia face the market presence of two of the largest manufacturers in the world.
In order to successfully open and run a business in this highly regulated field, investors can use the help of our lawyers in Malaysia. Our team is able to provide investors with expert advice on the legal requirements for tobacco manufacturers, for the labeling of the products and the market changes that can be expected.
Smoking prevalence in Malaysia and tobacco control
Smoking prevalence remains high among Malaysians among young adults and elderly individuals. Almost half of the men smoke, while very few women do so (46.4% of the men compared to 1.6% of the women).
The prevalence among minors is also an important factor to consider, and the pattern tends to reflect that of the adults in terms of sex groups (more adolescent males tend to smoke compared to women, 30.9% compared to 5.3% of the adolescent women).
As far as the tobacco control policies are concerned, Malaysia is a state that has committed to implementing national policies that aim to address the tobacco epidemic, as per the World Health Organization Convention on Tobacco Control. The proposed measures include reducing the demand and supply as well as increasing the prices and taxation of these types of products, among others. Alternative control measures indicate that the packaging for these products is to be regulated and so is the advertising and sponsorship. One of the experts at our law firm in Malaysia can provide investors with complete details on the current tobacco control policies that do not hinder the development of companies but do require that these firms follow a set of clear rules.
Further down in this article, our team of lawyers in Malaysia details the packaging and labeling requirements for tobacco products.
Opening a tobacco manufacturing company in Malaysia
The steps for opening a company in Malaysia are the following:
- Choose a legal entity type: the private limited company is commonly used although investors can also open a public limited company for this type of business.
- Choose a company name: the name needs to be unique and is to be checked and reserved in due time.
- Complete the documents: investors need to draw up the Articles of Association for the new company.
- Submit the forms: the incorporation form, as well as the company documents and other statements from the directors, are submitted to the SSM.
- Others: open a bank account, register for the goods and services tax and obtain the licenses, as needed.
Although the steps for company formation are the same as in other business fields, investors in the tobacco industry should remember that they would be subject to a number of important licensing and control regulations. Our team of lawyers in Malaysia can help both foreign and local investors understand these requirements.
Requirements for tobacco companies in Malaysia
One of the most important requirements for tobacco manufacturers is compliance with the packaging and labeling regulations as well as the pricing. We highlight these below:
- label: pictorial health warning labels; the chemicals included in the cigarette and interdiction to sell to minors.
- font: text regarding health and restrictions printed in Arial font with a size of no less than 8.
- color: the color for the health and the restrictions in a color contrasting the background of the package.
- pricing: subject to excise duties; the retail prices are subject to approval from the Government.
Entrepreneurs who wish to know more about the regulations applicable to tobacco manufacturers can reach out to our attorneys in Malaysia.
The list below highlights the smoking pattern in three Malaysian states during the penultimate wave of a long-term survey. The numbers below are for Wave 4, between July and November 2009, survey sample sizes for adults and young individuals in each state. Waves 1-4 were conducted among approximately 2,000 adult smokers and 1,000 youth smokers and non-smokers.
- Kedah: 250 smokers, out of which 114 youth smokers.
- Penang: 343 smokers, with 162 youth smokers.
- Selangor: 653 smokers and 249 youth smokers.
The figures are based on the International Tobacco Control Policy Evaluation Project, the ITC Malaysia National Report. This survey (telephone and face-to-face) took place over a number of years, in several waves and with different sample sizes in each state.
Investors who are interested in obtaining complete legal assistance for opening a tobacco manufacturing company in the country can contact our law firm in Malaysia.