Doing business in Malaysia

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Malaysia is located in Southeast Asia, lying just north of the Equator, and is composed of two non-contiguous regions: Peninsular Malaysia (Semenanjung Malaysia), also called West Malaysia (Malaysia Barat), which is on the Malay Peninsula, and East Malaysia (Malaysia Timur), which is on the island of Borneo. The Malaysian capital, Kuala Lumpur, lies in the western part of the peninsula, about 25 miles (40 km) from the coast; the administrative centre, Putrajaya, is located about 16 miles (25 km) south of the capital.

The Malay Peninsula and the northern coast of Borneo formed major maritime trade routes and have long been the meeting place of peoples from other parts of Asia. As a result, the population of Malaysia, like that of Southeast Asia as a whole, shows great ethnic, linguistic, cultural, and religious diversity. Helping to unite this diversity of peoples is the national language, a standardised form of Malay, officially called Bahasa Malaysia.

Malaysia has a rich cultural life, much of which revolves around the traditional festivities of its diverse population. The major Muslim holidays are Hari Raya Puasa (“Holiday of Fasting”), or Aidilfitri (ʿĪd al-Fiṭr), to celebrate the end of the fasting month of Ramadan, and Hari Raya Haji (“Holiday of the Pilgrimage”), or Aidiladha (ʿĪd al-Aḍḥā), to celebrate the culmination of the season of pilgrimage to Mecca. Buddhists honour the life of the Buddha on Hari Wesak (“Wesak Day”), and Chinese Malaysians celebrate Chinese New Year. Deepavali (Diwali), a Hindu festival of lights spanning several days, is observed by many Indian Malaysians, while Christmas is the principal holiday of the Christian community.

On most of these holidays, it is customary to host an “open house,” where guests are treated to Malaysian delicacies and hospitality. A holiday that spans all ethnic groups and religions is Hari Kebangsaan (National Day), a celebration of Malaysia’s independence on August 31.

Malaysia has a strong group orientation. The extended family is the closest knit of these groups, with tribes, villages or towns, work groups, or other organisations defining other group structures. Asserting individual preferences could be less important than having a sense of belonging to a group, conforming to its norms, and maintaining harmony among its members.

Building lasting and trusting personal relationships is critically important to most Malaysians. Across all ethnicities, people usually do business only with those they know and like. Establishing productive business co-operation requires a long-term perspective and commitment.

Respect depends primarily on status, rank, and age. Leaders in senior roles are usually of advanced age. It is important to treat older people with the greatest respect.

If possible, avoid arranging business meetings and events on Fridays, since this is the day a special weekly prayer is held for Muslims. Generally, schedules are loose and flexible, and meetings can start late. However, Malaysians generally expect foreign visitors to be punctual. If meeting in a formal setting or anyone of higher rank, it is best to be right on time which sends a message of respect.

Companies tend to be hierarchical. However, decision-making is normally a consensus-oriented group process in Malaysia. This process can take a long time and requires patience. Influencing decisions requires building strong relationships with as many of the stakeholders as you possibly can. Their input carries a lot of weight, and they sometimes have the final say, so do everything you can to win their approval.

Because the concept of saving face is so important, communication is generally indirect. Malaysians might answer ‘yes’ only to signal that they have heard what you said, not that they agree with it. Open disagreement and confrontation must be avoided, so you may not hear a direct ‘no’. Instead, there could be ambiguous answers. Alternatively, a respondent might deliberately ignore your question.

Because of the ethnic mix of the Malaysian population, many variations in naming patterns exist. It is often best to ask people politely how to address a person correctly. Make sure to tell them the same for your own name. Introduce and greet older people and those of high rank first. When introducing two people, it is important to state the name of the most important person first. Introductions are accompanied by handshakes using the right hand. Some people may not want to shake hands, so it is best to wait for your counterparts to initiate handshakes, which should be light and can last as long as 10 seconds. Some Malaysians prefer not to shake hands with the opposite sex (in either direction). If this happens it is best to just nod and smile.

In a formal setting, offer your business card to everyone present. You may not always get one in return. Show advanced degrees on your card and make sure that it clearly states your professional title, especially if you have the seniority to make decisions. Present your card with both hands, with the print facing the recipient. Alternatively, use your right hand and accept others cards using both hands if possible. Then examine the card carefully as not reading someone’s card can be an insult. Next, place the card on the table in front of you or into your card case. Never put someone's card into your back pocket or otherwise treated disrespectfully. Never write on a person’s business card.