Doing Business in Malaysia

What to look for in a reliable partner when working with the government sector /government-linked companies:

• Understands the national and local political situation very well.

• Is well connected but does not lean too far to either side and is on good terms with all parties as opportunities can change depending on who is in favour with the government of the day.

• Has previous relevant experience and is able to advise on or facilitate administrative requirements, e.g. licenses, permits, approvals, etc.

What to look for in a reliable partner when working with the private sector:

• Has a regional presence in Southeast Asia and/or is willing to explore new markets, and is already exposed to products and technologies from other countries.

• Is familiar with or can provide the support to navigate local administrative requirements, e.g. licenses, permits, approvals, etc.

It is always a good idea to have an independent third party contact on the ground to perform due diligence by checking the reputation and credentials of potential partners. An initial background check can be done by going to the Companies Commission of Malaysia website [3].

Business Meetings and Introductions

Initial meetings are usually more formal and used for getting to know each other and building rapport. You can expect a fair amount of small talk at the beginning of the meeting, and eventually, the most senior person on the host side will initiate the business conversation.

Higher ranking people should be greeted first and introductions on your side should be the same. You may extend your hand and shake hands with both genders but a more conservative Muslim member of the opposite gender may not offer their hand in return. You can smile and nod your head slightly instead. A gesture that has been increasing in use recently is bringing one’s right hand up to one’s heart.

Titles can be important especially if they are honorary titles bestowed by the sultans or the king such as ‘Tun’, ‘Tan Sri’, ‘Puan Sri’, ‘Datuk/Dato’, and ‘Datin’, and not just salutations such as ‘Encik’ (Mr.), ‘Puan’ (Mrs.), or ‘Cik’ (Ms.).  If titles are used when someone is introduced to you, you should refer to the person in the same way.

• For the government sector or government-linked companies, respect for and use of honorifics and titles are important and expected.

• In the private sector, titles matter less but best to use them initially until lightheartedly dismissed by the person.

Meetings should be scheduled in advance. Unless suggested by the host, you should avoid scheduling meetings during the following times:

• 12 pm to 2 pm - as most Malaysians prefer to go out for lunch and socialise with colleagues (lunch break is 1 hour with the exact time being up to the organisation/individual).

• 12 pm to 2:30 pm on Fridays - as Muslims (mainly men) go to the mosque to attend congregational prayer.

It is common for meetings to start late, but you do not want to be in a position where you are the cause of this so plan to arrive early or on time especially if there is a person of senior position involved.

If the meeting is organised by you, it is advisable to prepare and communicate an agenda in advance as attendees prefer not to be caught unawares and put in a difficult position or unable to answer questions. However, agendas and timings are not strictly followed and can easily deviate if there are other matters to be discussed. 

To an external foreign party, meetings can seem like asynchronous affairs - there will be a meeting for presenting one’s ideas/approach, perhaps several meetings in between for questions and clarification, and at a much later time another meeting for a decision to be communicated. In between, however, a lot of internal activity takes place such as gathering opinion, building consensus, and conferring with higher ups. This process can repeat multiple times until a decision is reached, and you may need to meet with many different parties on the same matter. Therefore, decision making generally does not take place during the original meeting but outside of it. It is ideal to have the presence of the key decision maker in meetings as this makes the process much faster, but this is not always possible especially if the matter is not considered ‘important enough’ to warrant their direct participation.

Business Cards

Business cards are usually exchanged during the initial introduction. There is no set etiquette, but the general practice is to present and receive it with both hands (adopted from the Japanese), examine it to show interest, and lay it down on the table in front of you. More recently, some people may use a mobile phone app to scan your business card and return it to you so as not to waste paper. If you know in advance you will be meeting with a Chinese business owner, it may be helpful to have your name also printed in Chinese characters although this is not necessary.

Dress Code

See ‘About Malaysia - Level 1’.

Business Entertainment / Meals 

Socialising is a very important part of establishing trust and long-lasting relationships.  Malaysians are very sociable and hospitable; you can expect to be taken out for meals either during or after working hours. 

Malaysians love food and it gives them great pride to introduce their local cuisine to foreigners, so be open. Be careful as the food can be spicy and you should let your host know if you do not enjoy spicy food. 

For Muslims:

• Business entertainment should be at halal establishments only.

• Do not eat pork and avoid drinking alcohol in their presence.

• During the month of Ramadhan when Muslims fast from dawn till dusk, do not suggest any business entertainment/meals unless it is a breaking of fast meal.

For non-Muslims:

• Business entertainment can be at non-halal establishments.

• Consumption of alcohol in the evening and with dinner is acceptable and common (but not during lunch!).

Note that spouses are generally not invited unless explicitly mentioned, as the conversation can be both casual as well as business-related.

Food is commonly served in family-style sharing portions placed in the middle of the table that you dish to your own plate using a serving spoon. Unless it is clear that it is a single-serving dish meant for one person, expect food to be shared. Eating with hands or with cutlery are both common depending on the restaurant, the dish, and the occasion. When eating with hands, Muslims only use their right hand but this is not expected of non-Muslims or foreigners.

The party who extended the invitation normally pays the bill, but as a matter of politeness, all parties make an (small) attempt to pay. You must, of course, let your host ‘win’ and allow them to pay the bill; you should then reciprocate by paying the bill for the next meal. If there is a clear hierarchical difference, for example, a supervisor taking a junior employee out for an infrequent meal, the supervisor should pay. One only splits the bill once they are familiar with each other and eat together on a regular basis..

Gift Giving

For the government, government-linked sector and large companies, there is normally a corporate gift policy ranging from specified limits to no gifts at all. However, small gifts of nominal value such as corporate branded premium items or handicraft and food from your country are generally acceptable and welcomed.

For Muslims, avoid giving:

• Alcohol and food containing alcohol (e.g, alcoholic chocolate)

• Pork, pork products and pig products (e.g. pig leather, pig hair bristles)

• Food that may contain animal products that are not halal (e.g. gelatin in confectionery)

• Anything resembling the image of pigs or dogs

• Anything with the image of sentient living beings (e.g. humans and human faces, animals) as this is considered idolatry. Geometric and abstract floral patterns are acceptable.

For non-Muslims, especially smaller privately owned companies, a gift of good quality alcohol will be appreciated once a close relationship has been formed.

If you are giving a high value gift, this is best done in private. High value gifts are not necessarily always construed as bribery - for example, while it would be inappropriate to give this at the start of a business relationship, it would be acceptable to commemorate a long relationship or a key milestone.

When receiving gifts, it is considered impolite to refuse. If you have concerns about receiving high value gifts, either accept the gift then declare it according to your corporate guidelines, or communicate a no-gift policy in advance of your visit.