Starting a Business in Malaysia
Malaysia Business Experts
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Why Start A Business In Malaysia?
Malaysia is a place of close ties and historical links. We celebrated our gilded 50 year anniversary in 2007. Not many marriages last that long nowadays, but we've made it through the good times and bad, the dinner parties and domestics. Bilateralism has been our byword. We share a familiar educational, commercial and legal framework, and the widespread use of English has made for a mellifluous business environment. And by 2020, Malaysia aims to be a fully developed nation, which means continued opportunities for UK investors in the region.
Contemporary Malaysia represents a steaming heterogeneous stew of Malayan, Chinese and Indian tradition and culture. Its pluralism and multiculturalism is rooted in ancestry and social historicism, so acquiring a fundamental cultural knowledge is usually critical to success.
Currently, Malaysia provides the globe with its Multimedia Super Corridor (MSC) which unites a legislative structure and a contemporary telecommunications infrastructure in an ecologically amicable environment to bring the best arena for the progression of multimedia industries. Malaysia's logical and dextrous management approach has allowed its market to raise its competitive game and sharpen its buoyancy when faced with obstacles. Steps have been made to aid the economy's diversification and to ensure constant progression.
New methods of progression continue to be encouraged and nurtured, for example, biotechnology, information and communications technology, halal products and Islamic finance. Malaysia is indeed advancing as a knowledge-based economy, driven by capital, originality and creativity. Higher interest rates have been consequential of the global environmental struggle. However, Malaysia maintains confidence when in faced with these imperatives, and has preserved a healthy growth rate. Indeed, they boast further diverse economic structure and robust domestic essentials.
The country relishes a healthy excess of the foreign trade, low unemployment, strong international reserves and high national savings.
What is the population?
The population of Malaysia, at the last estimate, is 30.25 million.
How is the climate?
The average temperature fluctuates between 20C and 30C.
Malaysia essentially observes tropical weather, although temperatures are never too extreme. Humidity is not uncommon, which is an obvious characteristic considering its proximity to water.
On the west coast, the monsoon season is between September and December, whereas, on the east coast, rainfall usually occurs between October and February.
Altogether, Malaysia observes inviting weather, with warm days and cool evenings.
What are the languages?
Malay is the official language of Malaysia. However, Chinese and English is also prevalent.
What is the currency and exchange rate?
The currency used in Malaysia is the Ringgit (RM).
The average income of workers is currently two-and-a-half times that of fifteen years ago. Malaysia's remarkable economic achievement has lowered poverty to levels unprecedented in the region. Unemployment and inflation also are low, especially when juxtaposed with the developing nations. Some structural characteristics are flawed, but, when contextualised, Malaysia's performance is worthy of praise. Its economic advancement offers good prospects for reliable trade and investment.
The transition started over thirty years ago when its government launched a campaign of industrialisation. Back in the1950s, Malaysia was dependent on tin, rubber and palm oil for its foreign exchange income. While palm oil capital is still apparent (Malaysia is the largest exporter of palm oil in the world) Malaysia systematically altered its manufacturing habits, and consequently electronics and electrical goods now dominate its exports. A remarkable influx of foreign direct investment has encouraged the advancement of the country's manufacturing industry.
Malaysia is the fourth most open economy in the world, calculated by trade as a share of GDP. The comparatively diminutive size of it economy means exports have played a vital role in sustaining expeditious economic development.
The main industries in Malaysia are:
- Rubber and oil palm processing and manufacturing
- Light manufacturing
- Tin-mining and smelting
- Timber processing
- Petroleum production and refining
Its primary import commodities are:
- Petroleum products
- Iron and steel products
And its main export commodities are:
- Electronic equipment
- Petroleum and liquefied natural gas
- Wood and wood products
- Palm oil
Labour and workforce
Labour in Malaysia is comparatively young. Its workers and graduates are considered diligent, erudite and malleable. Generally, workers will have experienced eleven years of academia, up to a secondary school stratum.
However, there is a shortage of workers in the manufacturing sector. To combat this, the government has taken steps to increase the number of engineers, technicians and other qualified professions that have recently graduated from national and overseas colleges, universities and training facilities.
There is no national minimum wage in Malaysia. However, certain industries have imposed their own, such as plantation workers who earn a base minimum of RM 350 with a possibility of RM 700 (productivity incentives and bonuses).
Business culture and etiquette
Fatalism - Malaysian culture, in general, is based around the religious doctrine of fatalism. Fatalism is the belief that success, failure, opportunity and misfortune are based on the will of God. When contextualised in the world of business, this can have significant effects that, as a Westerner, you may not be familiar with. Instead of encountering the Western business philosophies on empiricism and rationalism, the Malayans tend to make decisions based on subjectivity and emotion. Consequently, things like negotiations may take longer than expected or you are used to/
High Context Culture - A high context culture implies that, as a Westerner, you must not take things at face value, and frame them within the context of Malaysian culture. For instance, the choice of words is less important, and tone or body language could imply just as much, or more.
Because business is personal and based on trust, developing healthy relationships rather than exchanging facts and information is the main aim of dialogue and communication. Direct answers, specifically of a negative nature, are sometimes usurped for those that will preserve harmony and good intent.
Organisations that can assist with Starting a Business
GTP cross cultural trainings and intercultural workshops help global companies in improving their communication, efficiency and profitability when doing business across cultures.
Simplified Global Payroll Companies with global employees often find that managing payroll in multiple countries is complicated - different systems, laws, and languages in each country, lack of reporting, and constantly changing laws and regulations each year. Trying to manage global payroll via fax and email with excel spreadsheets leads to data security issues, fines, and penalties for non-compliance. Blue Marble has solved global payroll challenges with cloud-based technology, aggregated reporting, and a hybrid service model in 135+ countries around the world.
PEO Worldwide is an international PEO offering employer of record, payroll, employee benefits management, HR and compliance services throughout the world.
Finding office space abroad poses one of the most difficult changes that many start-ups face. Location, costs, and transport all need to be considered. And, more crucially of all, what office will allow a new business to attract and retain the best staff?