Licensed Manufacturing Warehouse (LMW) in Malaysia
A Licensed Manufacturing Warehouse (LMW) is a special license under Section 65/65A of the Customs Act 1967 in Malaysia. It allows manufacturers to import raw materials, machinery, and equipment without paying customs duties, as long as they are used for manufacturing goods mainly for export.
Benefits of LMW
- Duty-Free Imports – Manufacturers can import raw materials and equipment without paying customs duties.
- Flexibility – LMW holders can perform value-added activities, re-manufacturing, repairing, and servicing.
- International Operations – LMW supports International Procurement Centers (IPC) and Regional Distribution Centers (RDC).
- Cost Savings for Exporters – Reduces manufacturing costs, making Malaysian products more competitive in global markets.
Who Can Apply for LMW?
To qualify for an LMW license, a manufacturer must:
- Have a Manufacturing License under the Industrial Co-ordination Act 1975 (ICA) or an exemption letter from MIDA.
- Be involved in manufacturing as defined by the Customs Act 1967.
- Export at least 80% of total finished goods within 12 months.
Local Sales Rules
- LMW companies can sell up to 20% of their goods in Malaysia.
- Local sales beyond 20% require special approval from MIDA.
- Taxes and duties apply on local sales before the goods are released.
Reporting & Renewal Requirements
LMW license holders must:
- Submit monthly and yearly reports (M1, M2, and M4) to the Royal Malaysian Customs Department (RMCD).
- Maintain proper records to track duty-exempted imports.
- Renew their warehouse license at least one month before expiry to avoid fines.
- Provide bank guarantees for critical items like clothing and general bonds for non-critical items.
- Ensure customs compliance audits are in place to avoid penalties.
How to Apply for LMW License in Malaysia ?
Step 1: Prepare the Required Documents
You will need:
- Application Forms (Form JKED No. 1 & Form A)
- Company Registration Documents (SSM forms, business license, etc.)
- Manufacturing License (ICA 1975) or Exemption Letter
- Factory Layout Plans (Certified by an Architect)
- Manufacturing Process Flowchart
- List of Machines, Raw Materials, and Finished Goods
- Input/Output Ratio
- Rental Agreement (if applicable)
- Directors' Identification Copies & Photos
- Any other relevant documents
Step 2: Submit the Application
- Apply at the nearest Customs Office where the manufacturing facility is located.
- Ensure all documents are complete and accurate.
Step 3: Compliance & Approval
- The Customs Department will inspect the premises.
- Once approved, you will receive your LMW License.
Warehouse Requirements for LMW
The manufacturing premises must be:
- A permanent and secure building.
- Have separate storage areas for raw materials, finished goods, production, and packaging.
- Meet the security and operational standards set by the Director General of Customs.
- Maintain proper documentation to comply with Malaysia customs regulations.
Conclusion
Getting an LMW license can help manufacturers save costs on import duties, improve customs compliance, and expand their export business. However, it is crucial to follow customs regulations, maintain proper records, and submit timely reports to ensure smooth operations.
For more details, visit the Royal Malaysian Customs Department (RMCD) website or contact the nearest Customs Office.
Licensed Manufacturing Warehouse (LMW) in Malaysia