Introduction
The Free Commercial Zone (FCZ) in the Penang Port Butterworth Deep Water Wharves was gazetted on 20th June 1996. The selection of the 56 hectares was based on existing infrastructure available in the above wharves, to cater for various trade activities as provided for under Free Zone Act 1990 and Free Zone Regulations 1991. The North Butterworth Container Terminal (NBCT) was gazetted as a free commercial zone from 1st February 2021.
A Free Zone, with relation to Malaysian International Trade, may be defined as a place deemed to be outside Malaysia under Section 31 of the Customs Act 1967. Besides import and export activities include distribution, trading, consolidation, storage and transhipment without payment of customs duty, excise duty, sales tax or service tax.
Furthermore, the FCZ undertakes value-added activities such as break bulking, grading, re-labeling, re-packing and transit of cargo.
Objectives
Initial creation of FCZ is aimed at providing opportunities to meet increasing demands from trade and value added activities. This formation would thus allow multinational companies to enhance on their competitive edge and better control of their distribution systems, facilitate them to expand their production facilities and benefit from the economic of scale.
Thus, FCZ creation also sought up to promote the complementary development of manufacturing and trade sectors of the Malaysian economy.
Benefits & Advantages of Free Commercial Zone
- Elimination of duty on merchandise subsequently re-exported or destroyed within the Zone.
- Deferred duty on foreign goods until such time that they leave the Zone.
- Simplified documentation and procedures.
- Goods are insured based on value plus ocean freight.
- Acceptance of goods prior to payment of duty or excise.
- The storage of goods indefinitely awaiting a more receptive sample, before paying duty.
- Re-labeling and packing of goods to conform to local standards.
- Ability to exhibit and sell merchandises, and withdraw sample before paying duty.
- Enjoyment of free access to merchandise and bonded activities are allowed.
- Salvage or repair of damaged merchandise.
- Encouragement of commercial activities including trading, break bulking, grading, re-packing, re-labeling and transit cargo.
- A safe and secure environment.
- A liberal environment.
- Globally linked via it's port and airport connections.
- An excellent infrastructure in line with globalization.
- Strategically located nationally, regionally and globally.
- Access to quality human resources at competitive rates.
Strategic Location
The Penang Port FCZ is strategically located on the north-west coast of Peninsular Malaysia, making it the choice of vessels sailing eastbound and westbound. Malaysia's sea transport connections are at its' finest to date, with linkages to more than 200 ports worldwide. Needless to say, the FCZ is very well connected and with a rail link running parallel to the North South Highway, the FCZ is easily accessible by local and international traders.
Located at the heart of Butterworth commercial region, the FCZ is merely a stone throw away from well established financial institutions, major government departments, freights forwarding agencies, transport companies and various other business related facilities.
Facilities
Located within the FCZ infrastructure, are a range of modern port facilities. These include an extensive transit storage areas and warehousing facilities.
Technology
FCZ system In order to simplify the declaration process, an internet based application system known as FCZ System has been introduced. The FCZ System in a web based of real time system, which allow users to declare import, export and transshipment cargo through the internet. The system allows port users to declare documents in an expeditious, safe and convenient. The service avails around the clock. (Click for more information on FCZ System)
