EUROCHAM urges Malaysia to boost business predictability

To facilitate long-term business planning, he called for greater consultation with foreign investors before any regulatory changes are made, allowing them to respond or adjust to avoid disruptions to their operations.

Citing a recent survey among European companies, Godderis said respondents identified these issues as the main challenges to doing business in Malaysia, even as negotiations for the Malaysia-European Union (EU) Free Trade Agreement (FTA) progress and are expected to be completed by next year.

Regulatory unpredictability often disrupts long-term business planning, particularly when major policy changes, such as adjustments to energy prices or the introduction of new taxes like the Sales and Service Tax (SST), occur with limited consultation, Godderis told Bernama in a recent interview.

EUROCHAM Malaysia represents the European business community in Malaysia and facilitates EU-Malaysia trade and investment ties.

“In many cases, consultation only happens after the regulation is announced,” he said, adding that such practices undermine investor confidence and leave businesses with little opportunity to adapt.

Elaborating on product standardisation, Godderis pointed out that inconsistencies between Malaysian and European standards result in repeated testing requirements and unnecessary costs for manufacturers.

He said European companies assembling automotive components in Malaysia face duplication in compliance procedures, even though their products already meet stringent European quality standards./p

“Aligning standards would help manufacturers in Malaysia better integrate into global supply chains,” he said.

As for customs procedures, Godderis said efficiency and predictability remain key concerns, noting that administrative delays and bureaucratic red tape continue to affect the movement of goods.

“If Malaysia wants to position itself as a regional hub, customs clearance must be faster and more predictable,” he said.

He added that while Malaysia remains an attractive location for export-oriented investments, particularly in semiconductors, medical devices and machinery, addressing these structural weaknesses would enhance its regional competitiveness against countries such as Thailand, Indonesia and Singapore.

Beyond trade facilitation, EUROCHAM Malaysia has also called for fairer energy pricing policies to support industrial competitiveness.

Godderis observed that electricity tariffs for Malaysian industries are currently higher than for residential consumers, a reversal of trends seen in most other economies, where industrial users benefit from volume discounts due to their large-scale consumption.

He said while the need to protect low-income households is understandable, there is room for a more targeted and “granular” approach that continues to safeguard vulnerable groups while ensuring greater support for energy-intensive industries, especially those pursuing renewable energy transition targets.

The chamber is also advocating for a more sustainable and collective approach to healthcare financing, which Godderis described as an increasingly urgent policy challenge.

He said EUROCHAM's healthcare committee, composed of representatives from the pharmaceutical, insurance, medical and hospital sectors, has been actively discussing ways to create a more cohesive financing model.

At present, the ecosystem remains fragmented, with various stakeholders passing costs along the chain, from government policies affecting insurance firms, to insurers’ payments to hospitals, and hospitals’ transfer of costs to pharmaceutical suppliers.

Godderis said a more strategic and holistic framework could “bring a bit more oxygen into the system.”

He said EUROCHAM Malaysia continues to engage with policymakers to share industry feedback and help develop practical, balanced frameworks across sectors, including energy, healthcare and trade facilitation.

Representing more than 1,600 European and Malaysian member companies across 16 national business chambers, EUROCHAM Malaysia serves as the voice of European industry in promoting stronger bilateral trade and investment ties between Malaysia and the EU.

In 2024, bilateral trade between Malaysia and the EU reached RM218.9 billion, with exports totalling RM115.8 billion and imports RM103.1 billion.

Malaysia’s main exports to the EU included electrical and electronic products, manufactured goods, palm oil and related products, processed foods, and optical and scientific equipment.

From 2021 to 2024, total approved investments from EU countries in Malaysia’s manufacturing and services sectors, overseen by the Malaysian Investment Development Authority (MIDA), amounted to RM198.2 billion.