TLDR: Malaysia is actively strengthening its legal infrastructure to bolster regional trade and establish robust governance for emerging technologies, particularly Artificial Intelligence (AI). This initiative aligns with its responsibilities as the ASEAN Chair for 2025, focusing on market liberalization, regulatory harmonization, and the development of a dedicated AI law to ensure ethical and responsible innovation.
KUALA LUMPUR – Malaysia is undertaking significant reforms to its legal framework, aiming to enhance regional trade and establish a comprehensive governance structure for advanced technologies, including Artificial Intelligence (AI). These efforts are a cornerstone of Malaysia’s agenda as it assumes the ASEAN Chairmanship in 2025.
Datuk Seri Azalina Othman Said, Minister in the Prime Minister’s Department (Law and Institutional Reform), highlighted these strategic initiatives during her keynote address at the SCG Legal Regional Meeting 2025 Asia and Pacific Rim. She emphasized Malaysia’s commitment to market liberalization through various ventures, such as the Johor-Singapore Special Economic Zone and strengthened partnerships with the European Free Trade Association (EFTA) and China.
While ASEAN has made substantial progress in reducing intra-regional tariffs, Azalina stressed the critical need to address non-tariff barriers and achieve greater regulatory alignment to facilitate smoother and more efficient trade flows across the region. To this end, Malaysia is reviewing and updating key legislation, including the Contracts Act 1950 and the Sale of Goods Act 1957. Furthermore, a Cross-Border Insolvency Act, aligned with United Nations Commission on International Trade Law (UNCITRAL) standards, is currently under development.
In the realm of digital governance, a significant focus is on AI. Minister Azalina confirmed that Malaysia is in the process of drafting a comprehensive AI-specific law. This legislation is designed to focus on ethics and governance, ensuring that the nation keeps pace with rapid technological advancements while simultaneously safeguarding public trust. She stated, “This initiative reflects Malaysia’s proactive stance in regulating AI to ensure we keep pace with technological advancement while safeguarding public trust.” The overarching goal of this framework is to strike a balance between fostering innovation and ensuring accountability, thereby solidifying Malaysia’s position as a legally robust and economically competitive nation.
This proactive approach to AI governance is also evident in Malaysia’s broader international engagements. At the 17th BRICS Leaders’ Summit, Malaysia reiterated its call for ethical AI governance, aligning with its recently launched National AI Roadmap and AI Governance Guidelines. As the ASEAN Chair, Malaysia is also spearheading efforts to establish an ASEAN AI Network, aimed at enhancing regional capacity and setting common standards for AI development and deployment. The urgency for such legislation is underscored by the rising global losses from AI-related crimes, estimated at around RM5 billion between 2020 and 2024.
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The SCG Legal Regional Meeting served as a vital platform for legal and business leaders to deliberate on cross-border legal trends and foster collaborative efforts across the Asia-Pacific region, reinforcing Malaysia’s role in shaping the future of regional trade and technology governance.
