Background to Business in Malaysia

Malaysia is one of Asia success stories with a vibrant economy which has resulted from decades of careful planning and hard work.

The government acted swiftly in 2009 to try to reduce the impact of the global downturn and the results of this intervention were mainly positive. Malaysia’s thriving economy has helped it become, for example, one of the world’s leading producers of computer disks.

Malaysia’s population of over 30 million inhabitants presents the external business traveller with a minefield of cultural dilemmas. The country is strongly divided along ethnic lines with the three largest ethnic groups being (in order of size) Malays, Chinese and Indians. In addition, there are a number of smaller indigenous peoples in the territories of Sarawak and Sabah. That this amalgam of races and ethnic diversity has been moulded together and has (post the awful riots of 1969) worked reasonably well is truly one of the great success stories of the last thirty years.

As with all countries, culture and history very heavily influence the Malaysian approach to business. Anybody wishing to do business in Malaysia needs to become as conversant as possible with the cultural complexities of its business world in order to be able to develop the all-important relationships as quickly and as smoothly as possible.

With such a diverse cultural make-up, it is obvious that differences will occur within Malaysia itself with regard to attitudes to some aspects of business. Fortunately, however, there are certain common threads which run through the three major ethnic groupings and which will help the overseas visitor make sense of everything. This country profile attempts to pull together some of these common approaches. (It is also recommended that you read the country section on Singapore and India, which will help if working specifically with Chinese Malays or Indian Malays).

The Influence of Islam

Although Malaysia is an Islamic country fundamentalist principles have not affected the conduct of business. This does not mean that religious duties are not observed and the working day is punctuated by prayer in many offices. Some provinces observe Friday as the day of rest and close for business. Kuala Lumpur maintains a more Western weekly pattern – although some offices open on Saturday morning.

Ramadan, the month of fasting, is observed and levels of effort and motivation can, naturally be affected. Government departments often find themselves understaffed at this time, making the processing of visas and other official business somewhat tardy.

A brief overview of some key concepts to consider when doing business in Malaysia

Written and Produced by Keith Warburton

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This country profile has been produced to give a short overview of some of the key concepts to bear in mind when doing business with contacts in Malaysia. It is intended to be an aid to business people who have commercial dealings with counterparties in the country but should not be seen as an exhaustive guide to this topic or as a substitute for more substantial research should there be a need.

With this in mind, we have covered the areas which are key to a better understanding of the cultural mindset underpinning business dealings in Malaysia and which are, quite often, extremely different from the approach and thought processes associated with business in other parts of the world.

Therefore this briefing note is broken into short, bite-sized sections on the following topics:

  • Background to business
  • Business Structures
  • Management style
  • Meetings
  • Teamwork
  • Communication
  • Women in business
  • Entertaining
  • Top tips