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The volatile and unpredictable business environment requires managers to possess the right business acumen and understanding to navigate it effectively. Factors such as politics, economics, law, geography, and culture all impact businesses. Among these, regulatory aspects have a particularly profound influence on international trading practices.  

Regulatory aspects in business encompass the necessary legal requirements, documentation, and formalised trading agreements between countries. For example, Chinese investors looking to purchase industrial property in Peninsular Malaysia must understand the various legal conditions governing such acquisitions and may require legal assistance. Additionally, while commercial property prices in the Federal Territory are around RM1,000,000, each state may impose its own minimum purchase price and specific requirements (Wee, 2024).  

Moreover, Chinese investors must also prepare for company registration fees ranging from approximately RM1 million to sums exceeding this amount. Beyond this, various business agreements in Malaysia are unique to specific types of business activities, such as joint ventures, mergers and acquisitions, and strategic alliances (MITI FTA, 2024).  

In this regard, foreign investors from China may also be subject to several Malaysian property-related laws, including:  

• National Land Code 1965 (Section 433A)  
• Housing Development Act 1966
• Economic Planning Unit
• Foreign Investment Committee
• Land Acquisition Act 1960
• Malaysian Investment Development Authority
• Industrial Coordination Act 1975
   

(Wee, 2024)  

From a broader perspective, international regulatory aspects are not only confined to home-host country relationships but are often linked to wider regional economic agreements, such as the ASEAN-China Free Trade Agreement (ACFTA), the General Agreement on Tariffs and Trade (GATT) under the World Trade Organization, the Regional Comprehensive Economic Partnership (RCEP), and the Trade Descriptions Act 2011 (MITI FTA, 2024). Additionally, Malaysia’s recent membership in BRICS (Bernama, 2024), where China is a founding member, could potentially benefit Malaysia-China business relations on multiple levels.  

Such cross-border partnerships offer numerous advantages for both Malaysia and China, including opportunities for business expansion, reduced trade barriers, improved market access for goods and services, and mutually beneficial cooperation (Wee, 2024).  

However, foreign businesses looking to establish operations overseas may face challenges and restrictions. Specifically in Malaysia, these include laws governing business ownership shares, liability, and the establishment of branches or representative offices by foreign entities (MITI FTA, 2024; Wee, 2024).  

According to Wee (2024):  

• Chinese foreign companies are typically required to set up a Private Limited (Sdn Bhd) company in Malaysia, with 100% of shares owned by the foreign entity.  
• Chinese companies can establish a Limited Liability Partnership (LLP) without residing in Malaysia; however, the compliance officer must be a Malaysian citizen, permanent resident, or ordinarily reside in Malaysia.  
• In some industries, such as agriculture, banking, education, and oil & gas, foreign companies may need to include 50% Malaysian ownership.  

For Malaysia, these partnerships also present challenges, such as a lack of foreign compliance with local trade laws, over-reliance on foreign infrastructure development, loss of national sovereignty, and cultural clashes, among others (HSBC, 2025). Furthermore, strong competition from Chinese businesses in Malaysia could hinder local business growth (HSBC, 2025).  

Nonetheless, Malaysia-China trade relations continue to grow positively. MIDA (2024) reports that bilateral trade between China and Malaysia surged to US$117.52 billion (US$1 = RM4.30) in the first seven months of 2024, reflecting a 10.8% increase compared to the same period in 2023. Simultaneously, China’s non-financial direct investment in Malaysia rose significantly to US$1.28 billion, marking a year-on-year increase of 28.8% (MIDA, 2024).  

Overall, international trade remains a crucial element in sustaining economic and financial growth. Economic stability, in turn, is fundamental to improving social welfare and support for citizens. Therefore, the development of effective regulatory frameworks is an essential cornerstone for successful global trading partnerships.  

References:

Bernama News (2024, 10 October). *Malaysia, 12 Other Countries Officially Added as BRICS Partner Countries.* Retrieved from   

HSBC (2025, 1 July). *International Business Guides: Malaysia.* Retrieved from [https://www.business.hsbc.com/en-gb/business-guides/malaysia]  

MIDA (2024, 14 September). *China’s Direct Investment in Malaysia Soars 28.8%, Trade Climbs 10.8% in First Seven Months of 2024.* Retrieved from  

MITI FTA (2024). *Malaysia’s Free Trade Agreements: ASEAN-CHINA.* Retrieved 30 January 2024, from  

Wee, R. (2024, 16 October). *Malaysia-China Business Trade Trends and Regulatory Aspects.* [Guest Lecture Presentation]. ºìÐÓÊÓƵ University, Selangor.  

Dr. Elizabeth Andrews
ºìÐÓÊÓƵ Business School
Email: @email