Duty Free Shop (silver)

Week 22.1 Duty Free Shop

Few years back, I was thinking how nice is it to set up one small duty free shop selling silver in Labuan or Langkawi. Soon I found the following, to sell silver coin cheaply to people in Malaysia is not viable unless there are some changes to the existing custom ruling for duty free shop. First, silver coin is not in the list of dutiable goods approved for sale in a duty free shop.

Appendix A 

List of Dutiable Goods That Are Approved For Sale in a Duty Free Shop :

• Food products
• Chocolate, confectionery
• Liquor, cigarettes, tobaccos
• Personal care paraphernalia
• Textiles, wearing apparel, clothing accessories
• Footwear, headgear
• Adornment (ceramic/porcelain/glasses)
• Jewelries
• Articles of base metal 
• Typewriter, calculator
• Electrical appliances
• Telephone set
• Audio / video equipments
• Toys, games
• Cigarette lighter, ball point pen(plastic)
• Sports goods
• Leather goods
• Television, radio.

Well if you can get it approved by relevant authority, then there are few more challenges to go.

Secondly, the establishment of Duty Free Emporiums / Complexes Downtown is subjected to these terms:

• Opened only to Public Listed companies or Government owned companies;
• The company’s paid-up capital must not be less than RM1 million and the Bumiputera equity hold is not less than 70%; and
• The width of the commercial space is not less than 25 thousand square feet.

Wow! But I do see a lot of duty free shops in Langkawi, maybe it was pre-approved long time back when the ruling are more relax I guess.

Another bomb! 25 thousand sq feet, wow! That lot of rental $ charges! The only way to go about it is to partner with existing duty free shop owner or operator. Just hope that they won’t ditch you away when everything is running smoothly.  You don’t need a big shop for selling silver bullion as the margin is very small. All you need is just a counter as 2-3 times bigger than a money changer counter.

On top of that, there is lot of restrictions on duty free shop such as who you can sell to, who you can’t sell to etc.

Until then, I don’t think is viable for me as I don’t have any networking and most importantly the $$$$.  Now I need to think what to do other than silver business. Nevertheless, if you have the relevant networking you can always give it a try. Bear in mind, the margin is very small and the prices are volatile.

Some of the texts are taken from the URL below

http://www.customs.gov.my/index.php/en/trade-facility/customs/free-zone-and-controlled-gpb/93-duty-free-shops?start=1

http://www.customs.gov.my/index.php/en/trade-facility/customs/free-zone-and-controlled-gpb/93-duty-free-shops