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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Malaysia often appears very near the top of the tree in the ‘Best Country to Invest in’ league tables. With a highly skilled, well-educated workforce and a pro-business government Malaysia attracts high levels of foreign direct investment and Kuala Lumpur is rapidly becoming a destination of choice for global organisations who are looking to establish an Asian head office. In fact, more than 5000 companies from over 40 countries have established operations in Malaysia and that trend looks set to continue.

It would appear then that lots of global organisations consider doing business in Malaysia to be an attractive proposition. You should ask yourself why you haven’t considered Malaysia as a potential market if you are still to make that move. Political stability, great infrastructure, a highly motivated workforce and ideal geographic location make doing business in Malaysia sound like good business sense.

Yet Malaysia is a complex mix of different ethnicities all working and living together. This mix has produced a very distinctive local business culture which you need to understand before starting to build relationships and sell your good or services. Traditionally the minority Chinese section of society ran most business activities in the country but changing demographics and pro-Malay legislation have altered this picture over the past few decades. How have these changes impacted on day-to-day business dealings in Malaysia? What type of communication style can you expect from such a mixed-race culture? How do traditional hierarchical mindsets fit with the more modern matrixed approach used by so many foreign capital companies? You need to think about these things before you arrive in Kuala Lumpur rather than on the plane home. Don’t leave things to chance; do some homework.

This country profile provides an overview of some of the key aspects of Malaysian business culture in a concise, easy to follow-format. The document includes information on:

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