While Malaysia may not offer the lowest cost structure in the region, it does provide an educated and productive workforce with minimal language barriers. Combined with its well‑developed infrastructure and rapidly advancing industrial ecosystem, the country is particularly well‑suited for non‑labour‑intensive industries, such as electronics, chemicals and food and beverage (F&B). This also generates additional demand for intermediate goods as investment flows into the country.

A broad coalition of 88 organisations representing civil society, industry, and consumers has called on the European Commission to close what they describe as a "major regulatory loophole" in the EU's oversight of products sold through online platforms. Published earlier in July, the joint letter to the Commission signals the growing momentum behind a sweeping new regulatory instrument – the European Product Act – that is expected to reshape product compliance obligations for all businesses selling goods to European consumers, including those operating from third countries such as Hong Kong.

On 1 July 2026, a significant shift in European customs law took effect with the entry into application of Commission Delegated Regulation (EU) 2026/1022. Published in the Official Journal of the EU, the Regulation amends existing customs rules to eliminate duty-free treatment for low-value consignments. It introduces a flat €3 per item customs duty on imported goods worth up to €150. The changes have immediate and wide-ranging practical implications for e-commerce platforms, online marketplaces, logistics operators, and traders shipping goods into the EU from third countries such as those in Asia.

With mere weeks remaining before the EU's Packaging and Packaging Waste Regulation (PPWR) begins to apply, some of Europe's biggest consumer goods and packaging companies, alongside several Member States, are warning that key parts of the legislation may not be ready for consistent implementation across all Member States.

On 8 June 2026, Commission Implementing Regulation (EU) 2026/1200 of 5 June 2026, amending Implementing Regulation (EU) 2015/2447 as regards the rules on the implementation of the temporary EUR 3 customs duty on distance sales of imported goods in a consignment with an intrinsic value not exceeding EUR 150, was published in the Official Journal of the European Union. The Regulation applies from 1 July 2026. It is part of a wider package of changes to EU customs and VAT rules that will affect any trader based outside the EU who sells consumer goods directly to European customers online, regardless of how modest the value of the individual shipment may be.

It was reported on 12 May 2026 that the European Union is responding to a surge of non-compliant, low-value e-commerce parcels with a push toward centralised, enforceable solutions. European customs data reportedly showed that low-value e-commerce shipments into the EU soared to 5.8 billion items in 2025 from 1.39 billion in 2022, with 93 percent coming from the Chinese Mainland.

The European Commission has published guidance on the Packaging and Packaging Waste Regulation (PPWR). The guidance, provides important clarification for businesses placing packaged goods on the EU market. Although the guidance is not legally binding, it offers a detailed interpretation of key provisions and signals how national authorities are likely to approach enforcement. For Hong Kong traders exporting packaged goods to the EU, the document is particularly significant, as it clarifies roles, responsibilities and compliance risks across the supply chain.

On 26 March 2026, it was announced that the European Union has agreed on the most extensive customs reform since 1968. For Hong Kong traders selling directly to EU consumers, especially via online platforms or own web shops, this reform will materially change how small parcels are taxed, declared and controlled at the EU border. It combines the gradual creation of a central EU Customs Authority and a single EU Customs Data Hub with immediate measures targeting low‑value e‑commerce imports.

The European Commission has published a draft Commission Delegated Decision that would amend the new EU rules on packaging and packaging waste by carving out a specific exemption for pallet wrappings and straps. Under this proposal, certain operators using these materials to secure palletised loads would no longer have to meet the Regulation’s strict 100% reuse requirement for those formats.

From 1 July 2026, customs treatment of low-value consignments entering the EU will change significantly for both non-EU exporters and EU-based importers. The current system, under which goods in consignments with an intrinsic value not exceeding EUR 150 can benefit from a relief from customs duties, will be abolished. The Council of the European Union, which represents the governments of the EU Member States, formally approved the new Regulation on 11 February 2026.