Home Entrepreneurship A Foreigner’s Guide to Navigating Malaysia’s Business Culture

Entrepreneurship

A Foreigner’s Guide to Navigating Malaysia’s Business Culture

February 27, 2025

By Forhad Hossain

It’s a common desire of many foreign investors to start a business in Malaysia. It is known to all that there are lots of opportunities available for foreign investors. At the same time, the competition is very high and the business environment is getting more competitive. Knowing Malaysia’s business culture could assist you in staying ahead of others. So, how can you make this happen?

We are going to share a foreigner’s guide to navigating Malaysia’s business culture. It will be helpful for businessmen who are thinking about how to open a company in Malaysia for foreigners. Also, we are going to share some hidden secrets of Malaysia’s business culture.

Why Should You Start a Business in Malaysia?

Still confused about why you should start a business in Malaysia? This is the best country to enter the ASEAN market with proper business opportunities. In 2023, the growth of micro, small, and medium enterprises (MSMEs) reached 96.9% of all business establishments. There were 1101725 firms in total. The average annual growth rate is 2.5%. Surely, it will increase more in 2024.

Considering those factors, company registration in Malaysia will be the best decision for your business. The GDP of Malaysia is going to reach around US$780 billion by 2032. By starting your business in Malaysia, you can be a part of this fast-growing economy. The potentiality of making a profit is sky-high. There are also huge opportunities for accessing other developed countries for business purposes. This is a win-win deal for any business.

What are the Requirements for Starting a Business in Malaysia for Foreigners?

Business requirements are different based on which type of business you would like to start. Also, the requirements are different based on the business owners. The good thing is the requirements are easy to meet. If you somehow face any problem with that, SFM Consulting Firm will help you to get away with that. However, here are the requirements.

Sole Proprietorship
Partnership
Private Limited Company (Sdn. Bhd.)
Limited Liability Partnership (LLP)
Public Limited Company (Berhad)
Representative Office

Sole Proprietorship

Many people are interested in starting a business in Malaysia with sole Proprietorship. The requirement for the Sole Proprietorship is to have a permanent resident permit in Malaysia. As a foreigner, you should have a residency permit. It is not that difficult to get residency permits in Malaysia for foreign businessmen and investors.

Partnership

In a Partnership business, the owner will be more than one. The requirements for this type of business are almost similar to the Sole Proprietorship. All of the business partners should have a permanent residency permit. Malaysian citizens are also eligible to start a partnership business. Foreigners who have got Malaysian citizenship can start the business.

Private Limited Company (Sdn. Bhd.)

Around 55,595 Private Limited Companies were registered in 2024. There are approximately 1590140 Private Limited Companies (Sdn. Bhd.) available in Malaysia right now. So, this is a top choice for foreigners to start a Private Limited Company. It is allowed for foreigners to own the company. For the education, agriculture, banking, gas, and oil sectors, it is mandatory to have 50% Malaysian ownership.

Limited Liability Partnership (LLP)

Limited Liability Partnership could be considered the combination of a partnership and sole proprietorship. If you want to establish a Limited Liability Partnership (LLP) company as a foreigner in Malaysia, it is possible according to Malaysian rules. There is a requirement for the compliance officer of the company. The person should be a permanent resident or a Malaysian citizen.

Public Limited Company (Berhad)

Berhad, BHD, or Bhd indicates that the organization is a Malaysian public limited company (PLC). In Malaysia’s business culture “Berhad” is a popular term. In that type of business, you are allowed to share public trading. The Company Act 2016 is applicable to that. It’s suitable for large-scale businesses. If you want to operate your business on a large scale, foreigners can consider this business formation.

Representative Office

Would you like to explore the Malaysian business culture as a foreign company? You can choose the Representative Office model for that purpose. On that note, the parent company will be responsible for all the required liabilities. Also, you have to consider some limitations for promotional, research, and the process of organizing employees. Overall, it could be a convenient way to understand the Malaysian business environment.

Sum Up

Hopefully, you are feeling more confident now after learning a foreigner’s guide to navigating Malaysia’s business culture. If you follow those guidelines properly, you should be able to take your business to a competitive position in the Malaysian market. To do that, you need to have a registered business in Malaysia.

There is nothing to worry about with the support of SFM Consulting Firm. You can get assistance with company formation, virtual office setup, bank account opening, etc. So, let’s make the final call and bring your vision into reality by starting your business in Malaysia. Would you like to know anything else about company registration in Malaysia? Feel free to contact their expert business registration consultant.

FAQ

What is the business culture in Malaysia?

Courtesy, tolerance, harmony, and trust are the main elements of business culture in Malaysia. Clear communication is also important in Malaysian business culture. The business environment is dynamic.

What are the 4 types of business culture?

Clan culture, adhocracy culture, market culture, and hierarchy culture are considered the 4 main business culture types. Trust and Relationships are the core of the business culture.

What is the culture of Malaysian business management?

Mutual respect between authority and employee is an identical culture of Malaysian business management. Business leaders maintain good relationships with their teammates.

How is the work culture in Malaysia?

The work culture in Malaysia follows Islamic guidelines. Malaysia is a Muslim majority country. That’s why Islamic rules are practiced in most of the working environment.

What is the main business activity in Malaysia?

Malaysia is known for producing rubber and palm oil. Therefore, rubber and palm oil production is the main business activity in Malaysia. At the same time, commercial hardwood production is also a core business activity in Malaysia.

Go to top