Doing business in Malaysia

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Malaysia is located in south-east Asia. Consisting of two regions separated by 640 miles of the South China Sea, Malaysia is a federation of 13 states and three federal territories. It shares land borders with Thailand, Brunei and Indonesia on the northern part of the island of Borneo where the states of Sabah and Sarawak lie. The capital, Kuala Lumpur, is home to colonial buildings, busy shopping districts and skyscrapers.

Malaysia boasts one of south-east Asia's most vibrant economies, following decades of industrial growth and political stability. The economic outlook remains favourable, reflecting a well-diversified and open economy that has weathered the impact of external shocks.

The official language is Bahasa Malaysia (also known as Bahasa Melayu and the Malay language). English, Chinese dialects, and Tamil are also widely spoken.

Islam is Malaysia’s official religion and most Malaysians (60%) are Muslim. The Chinese population (22%) generally are Taoists or Buddhists, and the majority of the Indian population (7%) is Hindu.

Business culture in Malaysia

Malaysians are very friendly, but also quite reserved. The traditional Muslim greeting, Salaam, includes offering a handshake with your right hand and subsequently touching your heart while saying "Salaam alaykum". Hindus say "Namaste" or "Vanakam" when they meet and put their hands together in front of their chests as if in prayer, while Chinese generally shake hands. The family is a good topic of conversation. Family life, for Malaysians, is often more important than personal advancement.

As a general rule, Malaysians do not address their bosses by their first names, rather with a Mr or Madame. If the bosses have titles before their names then they are addressed by their titles. For example a number of CEOs and presidents of companies have the title "Datuk". In this case the bosses are addressed as such. If you are good friends with your colleagues you could be on first name basis.

Most Malaysian businesses are extremely hierarchical in nature and the need to show respect and duty manifests itself in a need for clearly defined reporting lines, which are transparent, and where bosses make the decisions and instruct their subordinates accordingly. The ideal boss is a benevolent autocrat. Challenges to the leadership are not well received.

Furthermore, Malaysia is a collectivistic society which reveals itself in the need for close long-term commitments to the family, extended family and company. Loyalty in collectivist cultures is paramount and overrides other rules and regulations. Management is the management of groups.

An important part of Malaysian culture, as with most Asian cultures, is the concept of face. Malaysians will use a number of methods in order to ‘save face’. Laughter, for instance, is often used to mask one’s true feelings and can reveal numerous emotions including nervousness, shyness or disapproval.

When scheduling business meetings in Malaysia one must take into consideration the importance of prayer times in this predominantly Muslim country. Fridays are a particularly religious day of the week and if possible meetings should not be scheduled for this time.

Attitude to punctuality varies according to which nationality you are doing business with. The Chinese for example expect punctuality, whereas both ethnic Malays and Indian business people have a more relaxed attitude towards time. As a general rule, you will be expected to be punctual; therefore it is advised to arrive to business appointments on time.

Finally, Malaysian communication style is very indirect, with multiple layers of politeness, and it is sometimes difficult to understand exactly what they mean. Direct answers, particularly negative ones, are generally avoided to preserve harmony. To help effective communication, pay close attention to their voice tone, body language, eye contact and facial expressions to interpret their meaning.

Alternative Description

Inspired? If you want to learn how you can work more effectively with your Malaysian colleagues, clients or supplier, contact us for a 'Doing business in Malaysia' sample course outline.


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