Malaysian MSMEs ready to tap Asean's 680-mln-consumer market under DEFA: SIM

MALAYSIA, 31 JULY 2026 —

Malaysia's micro, small and medium enterprises can tap Asean’s 680-million-consumer market under the proposed Digital Economy Framework Agreement (DEFA), Deputy Investment, Trade and Industry Minister Sim Tze Tzin said.

“Even small hawkers selling fried bananas now accept QR code payments,” he said. “With this digital literacy, even the smallest village businesses are prepared to enter this 680-million-consumer market.”

Senator Tiew Way Keng asked how the government would help MSMEs avoid the high costs of cross-border digitalisation, including the regional rollout of e-Invoicing. Sim said Malaysia’s phased e-Invoicing implementation includes threshold-based exemptions to ease compliance burdens on smaller firms.

“The Finance Ministry announced exemptions to give businesses more time,” he said. “We have taken a cautious, MSME-friendly approach so compliance costs do not unduly burden affected companies.”

DEFA is expected to be signed by the end of this year and will act as a “digital highway,” Sim told Senator Datuk Ng Keng Heng, removing bureaucratic barriers and cutting non-tariff barriers (NTBs) across the region. Harmonising digital regulations would reduce market fragmentation and help build a more efficient, cost-effective Asean digital bloc that could generate a US$2 trillion digital economy by 2030.

Malaysia will rely on Asean’s existing NTB monitoring tools—including the Asean Trade Repository, Asean Single Window and Mutual Recognition Arrangements—to protect local exporters, Sim said. These mechanisms, though non-binding, have improved transparency and provided faster, business-friendly channels to resolve trade disputes.

“The ATR lets exporters check non-tariff measures before entering new markets,” he said. “The ASW and MRAs cut delays, compliance costs and technical barriers.”

Asean has also upgraded the Asean Trade in Goods Agreement to strengthen NTB disciplines and ensure any discriminatory treatment of Malaysian goods or services can be addressed promptly. Established committees such as the Asean Trade Facilitation Joint Consultative Committee and the Coordinating Committee on the Implementation of the Asean Trade in Goods Agreement now provide structured monitoring and resolution of NTB-related issues.

For Malaysian businesses, DEFA offers a clear route to scale regionally while Malaysia’s e-Invoicing rollout balances readiness with affordability.

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