How Middle Eastern Investors Can Access The Halal Consumer Market in Malaysia

Home to some 16 million Muslims, Malaysia is a leading market in Southeast Asia for the production and consumption of halal products. Malaysia’s halal products have an annual export value of 35.4 billion ringgit (US$7.46 billion), or 5.1 percent of the country’s exports, as it is a key supplier for countries with large Muslim populations, such as Indonesia. It also imports Halal ingredients and products, while Foreign Direct Investment into Halal parks in Malaysia in 2021 has also been growing due to the countries significant Halal export reach.

Halal certification is relevant to a variety of products that use animal products, including food products, cosmetics, and pharmaceuticals. Here, we look at how halal is defined in Malaysia and how businesses can receive a Halal Certificate.

What is considered Halal food in Malaysia?

“Halal” is a concept in Islamic law that means “allowed”, “permissible”, or legal. This is in contrast to “Haram”, which means “not allowed” or “forbidden”. Thus, a Halal Certificate confirms that a product is allowed for Muslims to consume.

Halal certification is most commonly used in connection with food products. In some cases, companies develop alternative food products that are specifically aimed at Muslim consumers, such as meat products, and thus require a Halal Certificate.

Malaysia’s definition of the term “Halal” is written in Trade Description Order (Usage of the Term “Halal”) 1975. According to this definition, food is Halal if it meets the following requirements:

• Does not stem from or consist of any part of or item from animals that are forbidden to Muslims by Islamic law, or animals that have not been slaughtered according to Islamic law.
• Does not contain any substance that is considered impure in Islamic law.
• Is not prepared, processed, or manufactured using equipment or utensils that are not free from impurities as defined by Islamic law.
• In the preparation, processing, or storage stage, it does not come in contact with or is stored near any kind of food that does not meet the requirements of the above stipulations or any substances that are considered impure by Islamic law.

What other products can be certified as Halal in Malaysia?

Besides food products, a variety of other products and services can receive a Halal Certificate. These are mostly products that may use animal products as ingredients or other services that may have animal products on the premises. These include:

Beverages;

Food supplements;

Food premises (e.g. restaurants, hotels);

Consumer goods;

Cosmetics and personal care products;

Pharmaceuticals;

Logistics;

Slaughterhouses;

Original equipment manufacturers; and

Medical devices.

Each industry or product type carries particular requirements to be considered Halal. For example, in connection to slaughterhouses, the National Council for Malaysian Islamic Religious Affairs discussed The Guidelines on the Production, Preparation, Handling, and Storage of Halal Food in 2000.

How to apply for a Halal Certificate in Malaysia?

The Department of Islamic Development Malaysia (Jabatan Kemajuan Islam Malaysia (JAKIM)) is the government agency that oversees Halal Certificates in Malaysia.

Companies can apply for a Halal Confirmation Certificate online through the MYeHALAL system on the JAKIM Halal Hub. If successful, companies can display a Halal logo issued by JAKIM on their products

Applicants for a Halal Confirmation Certificate must fall under one of six categories. These are:

Manufacturer/producer;

Distributor/trader;

Sub-contract manufacturer;

Repacking;

Food premise; and

Abattoir/slaughterhouse.

After identifying their category, applicants must provide JAKIM with the following information:

Company profile;

Company/business registration;

Name and description of product/menu for certification;

Ingredients used;

Name and address of manufacturer/ingredient supplier;

Halal status for ingredients with the Halal certificate or product specification for critical ingredients (if relevant);

Type of packaging material;

Manufacturing process and procedure;

Other documents, such as HACCP, ISO, GHP, GMP, TQM, etc. (If any); and

Location map of premise/factory.

JAKIM will then conduct an on-site inspection of the applicant’s premises. The applicant must create a file for the Halal Certificate application that stores all relevant documents during JAKIM’s inspection of the premises. The inspector may take product samples for laboratory analysis during the inspection.

If the applicant is successful, their Halal Certification will be valid for two years, except for slaughterhouses, where the certification will be valid for one year. Holders of a Halal Certificate must apply for renewal at least three months before the certificate’s expiration date.

How much does it cost to apply for a Halal Certificate in Malaysia?

The fees associated with applying for a Halal Certificate depend on the entity that is applying. They are summarized as follows:

Small company: 100 ringgit (US$21)

Medium company: 400 ringgit (US$84)

Multinational company: 700 ringgit (US$148)

Small slaughterhouse: 100 ringgit (US$21)

Medium slaughterhouse: 400 ringgit (US$84)

Large slaughterhouse: 700 ringgit (US$148)

Food premise/restaurant/hotel/caterer: RM 100 (US$21) for each premise

Does Malaysia recognize foreign Halal certificates?

JAKIM recognizes foreign Halal certification bodies (FHCBs) that meet Malaysia’s procedures and guidelines. Recognized FHCBs send annual reports to JAKIM for review. The list of FHCBs, as of December 2020, can be found here.

Any product marked as “Halal” that is exported to Malaysia must have a certificate, including a marking, from an FHCB, per Trade Descriptions (Certification and Marking of ‘Halal’) Order 2011.

Demand for halal products is not only growing in Malaysia, but also in China, and other markets in Asia such as India, Indonesia, the Philippines, and Thailand.

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