How to pay Chinese suppliers from Malaysia

How to pay a Chinese supplier from Malaysia: the short answer

A Malaysian business pays a Chinese supplier in three stages. It agrees the price and payment terms, it pays by bank transfer from an account in the company's own name to the supplier's company account, and it clears the goods with the Royal Malaysian Customs Department using documents that match the payment. The payment is usually a telegraphic transfer in US dollars, sent from a foreign currency account or with dollars bought with ringgit. A telegraphic transfer (TT) is a bank-to-bank international payment sent over SWIFT, the messaging network banks use for cross-border payments; each bank has an 8 or 11 character SWIFT code.

Malaysia's foreign exchange rules are set by Bank Negara Malaysia (BNM), the central bank, in its Foreign Exchange Policy (FEP) Notices. For a company paying a supplier abroad, they are permissive: a resident may pay a non-resident in foreign currency for any purpose, apart from certain derivatives. Trade in goods may also be settled in ringgit with a non-resident.

The usual sequence for an order from China is:

1. Agree the price, the payment terms and the Incoterm with the supplier, and get a proforma invoice. An Incoterm is a standard trade term, such as FOB or CIF, that sets who pays freight and insurance.
2. Check whether the goods need an import permit, and appoint a customs or forwarding agent licensed by the Royal Malaysian Customs Department.
3. Pay the deposit by TT from your company's account, quoting the proforma invoice number.
4. Pay the balance against a copy of the bill of lading, or through a letter of credit or a documentary collection.
5. Have your agent submit the Customs Form No. 1 (K1) import declaration, with the invoice, proof of payment and packing list.

This guide covers the Malaysian side of each step: the BNM rules, the payment routes, published bank charges, the customs documents and the risks of paying through agents. For the supplier's side, such as how Chinese factories invoice and why many use a Hong Kong account, see our general guide on how to pay suppliers in China.

BNM foreign exchange rules for paying suppliers abroad

BNM describes the rules by residency: what a resident may do, and what a non-resident may do. A company incorporated in Malaysia is a resident. A Chinese or Hong Kong supplier is a non-resident.

Paying a supplier abroad in foreign currency

BNM's rules state that a resident is free to make or receive foreign currency payments to or from a non-resident for any purpose. The exceptions are derivatives: foreign currency derivatives offered by the resident, ringgit derivatives, and exchange rate derivatives offered by a non-resident, unless BNM approves them or the FEP Notices allow them. A supplier invoice is not affected by these exceptions.

Settling trade in ringgit

BNM permits settlement of trade in goods in ringgit between a resident and a non-resident. Ringgit payments to or from a non-resident's External Account, which is a ringgit account a non-resident holds at a bank in Malaysia, are allowed if the non-resident can produce documentary evidence that the transaction complies with the FEP Notices. Few Chinese factories hold ringgit accounts, so this route matters mainly to suppliers with a Malaysian presence.

Foreign currency payments inside Malaysia

Payments in foreign currency between two residents are allowed only for listed purposes. They include transactions with a licensed onshore bank and settlement of domestic trade between a resident exporter and resident entities in global supply chain operations, subject to conditions. Paying a Malaysian agent or forwarder in dollars falls outside the general permission, so pay them in ringgit.

Sources: Bank Negara Malaysia, Foreign Exchange Policy pages on payment in foreign currency by residents and payment in ringgit by non-residents; RHB Bank summary of the Foreign Exchange Policy. As published on 29 October 2026. Confirm current rules with your bank.

The investment limit applies to foreign currency assets, such as balances held abroad, not to paying a supplier invoice. It matters if the company converts ringgit to build up dollar balances outside Malaysia rather than to pay for goods.

How the money reaches a Chinese supplier

Most Chinese suppliers invoice in US dollars, and many invoice through a Hong Kong trading company with a Hong Kong bank account. A Malaysian importer pays in one of the ways below. Whichever route you use, the beneficiary on the payment should be the company named on the proforma invoice.

Routes as described in this guide; ringgit settlement from BNM's Foreign Exchange Policy page on payment in ringgit by non-residents; supplier-side checks from PNC Bank's summary of China's goods trade foreign exchange rules. As published on 29 October 2026.

What the supplier's bank checks

China manages foreign exchange through the State Administration of Foreign Exchange (SAFE). As summarized by PNC Bank, a Chinese company must be on SAFE's list of companies with goods trade foreign exchange business, and banks cannot handle foreign exchange for companies that are not on it. The supplier's bank verifies each receipt using documents such as the contract, invoice and customs declaration. The same summary states that the remitter and the beneficiary must be the parties to the contract, the importer and the exporter. A payment from a company that is not on the contract can be held while the supplier's bank asks questions.

Paying in yuan

BNM and the People's Bank of China renewed their bilateral currency swap arrangement on 7 August 2026. It was expanded to RMB220 billion (MYR130 billion), from RMB180 billion (MYR110 billion), and runs for five years to 2031. BNM states that the arrangement facilitates the use of local currencies for the settlement of bilateral trade and investment. Whether your bank can send yuan, and at what rate, varies by bank. Paying in yuan saves the supplier a conversion but not yours, so compare the total cost of both routes.

Deposit, balance and payment terms

The payment term decides when money leaves Malaysia and what you hold in return.

Sources: BNM Foreign Exchange Policy; DHL Malaysia on Customs Form No. 1. As published on 29 October 2026.

A letter of credit (LC) is a bank's written promise to pay the seller when it presents documents that comply with the credit's terms. A documentary collection sends the shipping documents through the banks, and you receive them only after you pay or accept a bill of exchange. A supplier that has not traded with you before may ask for an LC on the first order and accept deposit and balance on later orders.

Because BNM's rules leave the timing of supplier payments to the contract, the risk in a deposit is commercial, not regulatory. Keep the first deposit with a new supplier modest, pay the balance only against a copy of the bill of lading, and confirm any change to the supplier's bank details by phone before you pay.

What it costs: published bank charges

Each Malaysian bank publishes its own charges. The table shows one bank's published charges for outward foreign telegraphic transfers, as an example of the items to budget for on each order.

Source: Maybank, list of fees and charges (2025 announcement), as published on 29 October 2026. Other banks set their own charges.

On an order paid as a deposit and a balance online, the two transfers cost RM20 in Maybank's own charges, plus 8% Service Tax, plus any agent bank charges. Where the cable charge applies, it adds RM30 to each payment. Three costs sit outside the tariff. The first is the exchange rate if you buy dollars with ringgit, so ask for the rate before you confirm. The second is correspondent bank charges deducted on the way to China. The third is the supplier's own bank charge.

OUR means you pay all transfer fees and the supplier receives the full invoice amount. SHA shares the fees, so intermediary deductions come out of the amount. BEN puts all fees on the supplier. A payment that arrives short delays shipment while the supplier queries the gap, so ask your bank whether it can send supplier payments with OUR charges.

Documents that tie the payment to customs

Your bank, customs and the supplier's bank each match the same set of facts: the supplier's name, the invoice number and the value. Keep them identical across every document.

Source: DHL Malaysia, Custom Form K1 and K2 differences. Typical sequence; requirements vary by product. As published on 29 October 2026.

The K1 is the mandatory customs declaration for imported goods. Only a registered customs agent or a forwarding agent licensed by the Royal Malaysian Customs Department can submit it through the official customs portal. Because the K1 file includes proof of payment, the payment to the supplier and the invoice on the declaration should name the same seller and the same value. An HS code is the international tariff number that classifies the goods and sets the duty rate.

A bill of lading is the document the shipping line issues when it receives the goods. Ask the supplier for a copy before you pay the balance, and check that the shipper, consignee and goods match the invoice.

Agents, cash and informal routes: what goes wrong

Some importers pay through an agent who collects ringgit in Malaysia and pays the supplier from an account in China, or through a stablecoin trader. The facts below are what an importer should weigh before using these routes.

• Paying a local agent in dollars is outside the general permission. Foreign currency payments between residents are allowed only for listed purposes, so a Malaysian agent is paid in ringgit.
• The proof of payment does not match. The K1 file uses proof of payment. A transfer made by an agent shows the agent, not your company, as the payer.
• The supplier's bank may query it. China's rules expect the payer to be the party on the contract. A transfer from an agent's account is a payment from a third party.
• There is no trace. A TT from your own account carries a reference and can be traced through the banks. Cash handed to an agent cannot.
• Digital assets are not legal tender. In a joint statement of 6 December 2018, BNM stated that digital assets are not legal tender in Malaysia, and that issuers and exchanges dealing in digital assets with a payment function must comply with BNM's payment and currency rules. The Securities Commission Malaysia oversees trading at digital asset exchanges. Take advice before paying a supplier in a stablecoin.

Where Helm fits

Helm is a financial technology company, not a bank. Accounts are held with regulated partner institutions. A Helm account gives a Malaysian company USD account details in its own name, with a US routing and account number that receives ACH, Fedwire and SWIFT payments, alongside EUR and GBP details.

For a business that buys from China, it works like this:

• Pay suppliers in USD. Send international payments by SWIFT from your company's own account to the supplier's USD account in China or Hong Kong, with the rate, fee and expected arrival shown before you send.
• Hold dollars for the balance. Keep the balance payment in USD so it is not converted on the day it falls due.
• Convert stablecoins. If a buyer abroad pays you in USDC or USDT, you can receive them and convert them to USD inside the account where your own legal position allows it, then pay the supplier by SWIFT.
• Finance the balance. Trade finance, such as supplier finance and working capital, is arranged case by case.

A Helm account sits outside Malaysia. Paying a supplier from it is a foreign currency payment to a non-resident, but holding balances abroad funded by converting ringgit can count as an investment in foreign currency assets, and export proceeds must still be repatriated under FEP Notice 7. Confirm with your bank how these rules apply to your flows. Each account has a named account manager, and review questions are answered in writing within one business day. Helm agrees pricing with each business in writing before the account opens, and shows the rate, the fee and the expected arrival before you confirm each payment.

A checklist for paying a Chinese supplier from Malaysia

• Get a proforma invoice and check that the seller on it is the company you will pay.
• Check whether the goods need an import permit, and appoint a licensed customs or forwarding agent.
• Ask your bank for a dollar quote and a yuan quote for the same invoice, and compare the total cost.
• Send each payment from your company's own account, with charges set to OUR where your bank offers it.
• Pay the balance against a copy of the bill of lading, or use a letter of credit for a new supplier.
• Give your agent the commercial invoice, proof of payment and packing list for the K1 declaration.
• Pay local agents and forwarders in ringgit.
• Keep the TT confirmations with the invoices, K1 declarations and shipping documents for each order.

For how other importers organize supplier payments, see the importers page.

Questions

References

1. Bank Negara Malaysia: Foreign Exchange Policy, payment in foreign currency by residents
2. Bank Negara Malaysia: Foreign Exchange Policy, payment in ringgit by non-residents
3. RHB Bank: Foreign Exchange Policy summary
4. Bank Negara Malaysia: Renewal of the bilateral currency swap arrangement with the People's Bank of China (7 August 2026)
5. Maybank: List of fees and charges
6. PNC Bank: Navigating China's regulations on foreign exchange for goods trade
7. DHL Malaysia: Custom Form K1 and K2 differences
8. Securities Commission Malaysia: Joint statement on regulation of digital assets in Malaysia (6 December 2018)

This guide is general information for businesses, not financial, legal or tax advice. Rules, fees and timings were checked against the sources listed on the review date and may change.