Licensed Manufacturing Warehouse (LMW) in Malaysia

Overview of Licensed Manufacturing Warehouse (LMW) / Gudang Pengilangan Berlesen under Royal Malaysian Customs, including export-oriented manufacturing, tax treatment and compliance.

Licensed Manufacturing Warehouse (LMW) in Malaysia

A Licensed Manufacturing Warehouse (LMW), known in Malay as Gudang Pengilangan Berlesen (GPB), is a customs-licensed manufacturing facility for export-oriented production. It allows approved manufacturers to import raw materials, components, machinery and related items under customs control, with duty and tax facilities subject to Royal Malaysian Customs requirements.

LMW Overview

Who Should Consider LMW?

• Export-oriented manufacturers importing raw materials or components.
• Companies producing goods mainly for export markets.
• Manufacturers that need to defer or obtain facilities for import duty and sales tax on eligible inputs.
• Factories that require customs-controlled manufacturing and inventory tracking.
• Supply-chain operators involved in contract manufacturing, assembly, packaging or processing for overseas customers.

Duty and Tax Facilities

• Imported raw materials, components, packaging materials and related inputs may enjoy customs duty or sales tax facilities, subject to approval and customs conditions.
• Machinery, equipment and spare parts may also be covered under specific facilities depending on eligibility.
• The facility is tied to approved manufacturing activities and the movement of goods under customs control.
• Goods released into the local market may be subject to duty, tax or approval requirements.
• Companies must maintain accurate records to support duty/tax treatment and customs audits.

Application and Premises Considerations

• Applications are made to the Royal Malaysian Customs Department.
• The factory premises must be suitable for customs-controlled manufacturing and storage.
• Local authority approval, building approval, fire safety, security, layout and access control may be important before licensing.
• The premises should support clear separation and tracking of raw materials, work-in-progress, finished goods, waste and scrap.
• Companies should prepare process flow, product details, import/export plans, inventory system and internal controls before applying.

Responsibilities of LMW Companies

• Submit required monthly and annual statements to Customs.
• Maintain updated records of imported materials, production, finished goods, waste, scrap and exports.
• Notify Customs about changes such as company name, address, directors, shareholding, manufacturing activity or premises layout where required.
• Report losses, damages, theft, destruction, disposal or other irregularities according to customs requirements.
• Obtain approval before selling, transferring or moving goods where customs permission is required.
• Ensure the licensed premises and operations remain compliant with LMW licence conditions.

Why LMW Matters for Factory Site Selection

• LMW status can make a factory more suitable for export manufacturing and regional supply-chain operations.
• The building layout must support customs control, secure storage, loading access and inventory tracking.
• Proximity to ports, airports, highways and freight forwarders can reduce logistics cost and improve export timing.
• Facilities such as loading bays, floor loading, container access, CCTV, access control and fire safety become more important.
• Companies should confirm whether the intended premises can satisfy Customs, local authority, fire, environmental and utility requirements.

Practical Due Diligence Checklist

• Confirm the intended manufacturing activity is suitable for an LMW application.
• Check whether the premises has CCC / CF, approved building plans and valid land or building use for manufacturing.
• Review site security, boundary control, loading access, warehouse segregation and inventory system readiness.
• Confirm export ratio, import materials, finished goods flow and local sales plans with a customs adviser or Royal Malaysian Customs.
• Check whether additional approvals are needed from local authority, Fire and Rescue Department, Department of Environment or other technical agencies.
• Plan customs reporting, audit readiness, stock reconciliation and internal SOP before starting operations.

Reference: Royal Malaysian Customs Department, “Licensed Manufacturing Warehouse (LMW) / Gudang Pengilangan Berlesen (GPB)” guide.