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What you should know if you want to do Business in Malaysia

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Author: Salvatore Corradi – FM Chairman

Malaysia, one of ASEAN’s leading countries, is a nation with a strong financial system and a dynamic and growing economy, especially from a technological point of view. As proof of this growth is its capital, Kuala Lumpur, the highest expression of the race for the future of the country. Malaysia is also ranked 12th in the world in the World Bank’s list of “Ease of Doing Business“.

Even if there are some industries and positions where foreigners are not permitted to engage and restrict in foreign equity ownership, starting a business in Malaysia is not an insurmountable undertaking. In many cases, in fact, a foreigner is even encouraged by the Malaysian government itself to start a business project.

The local currency is the Ringgit and the banking institutions of the country are modern and rich in services that have nothing to envy to the great western banks. However, once they arrive in Malaysia, many expats choose to keep an international account.

If you are worried about the health system, Malaysia also has an excellent reputation for this, having a “Foreign Worker Hospitalisation and Surgical Insurance Scheme” (SKHPPA), designed to reduce the financial burden of the employer of foreign workers in the event of hospital admission of their foreign workers.

For these and other reasons, Malaysia can become a great investment destination.

However, we must not underestimate the strong connection that binds the country to its cultural heritage. In business management, Malays tend to follow special rules and traditions that can make cooperation with foreigners complex. In working relationships it is necessary to adhere to pre-established patterns that follow Malaysian customs and respect their corporate culture in relation to social hierarchies.

First of all, in Malaysia the greeting, accompanied by a smile, is very important and it is considered as a way to show respect to the interlocutor. The older person must be the first to receive the greeting and must be treated with honor. The most common greeting is represented by a handshake, but it is absolutely forbidden for it to happen between a man and a woman, who in no circumstances can have physical contact. A more formal greeting, typical of Muslim Malays, consists instead in shaking the right hand of the person with both hands, then make a small bow and, finally, put your right hand on the heart.

Before starting to talk business, Malaysians like to do “small talk” (cf. “Small Talk and Business Relations“) and, therefore, have a nice and casual conversation with their interlocutor. Often, in this context, they tend to ask questions about the private life of the other party, especially about the family and private sphere, showing a particular predilection for those who, in turn, are interested in the subject.

With regard to the communicative style, Malays tend to prefer indirect communication, are very diplomatic and avoid criticizing an idea in a straightforward way. Precisely for this reason, they expect others to behave respectfully and never adopt an aggressive or confrontational attitude.

Before a decision is reached, each person will be able to express their opinion and meetings can therefore last a long time and it is important to remain patient and not to urge the interlocutors to conclude.

By adhering to these cultural schemes, it is possible to build personal connection with Malaysians with Malaysians to develop a relationship of mutual trust.