Government: Federal constitutional monarchy. Malaysia is made up of 13 states and three federal territories. Each of the states has their own chief minister. Nine of the states have hereditary rulers. The supreme head of state is the Yang di-Pertuan Agong or king, who is elected every five years from among the nine rulers. At federal level there is a non-elected upper house and an elected lower house, with an election every five years. The prime minister is Dato Seri Abdullah bin Haji Ahmad Badawi.
Economy: Malaysia is aiming to achieve developed nation status by 2020. The government has an active privatisation program. However, many major businesses are either government controlled or have substantial government interest in them. Malaysia was a founding member of the Association of South East Asian Nations (ASEAN) and has been a strong regional competitor to bring about a pro-business and investment environment.
This has included a relaxation of foreign ownership laws in the manufacturing sector and incentives to attract investors in areas such as operational headquarters, regional distribution centres and international procurement centres. Malaysia is one of three countries that control the Straits of Malacca and therefore international trade plays a large part in the economy.
Doing business: If there is one key factor that defines Malaysia, it would be its multi-cultural, multi-ethnic and multi-lingual makeup.
Around 62 per cent of the population is Malay, 24 per cent Chinese and 8 per cent Indian. The remainder of the population come from a wide variety of ethnic backgrounds. Islam is the largest, as well as the official, religion. However, it sits side-by-side with Hinduism, Christianity and Buddhism and these religious holidays are observed. With such an array of cultures, knowing how to address Malaysians can be difficult and it pays to do some homework in advance and gain an understanding of the ethnic mix and requirements. For example, yellow is regarded as the king's colour and is best avoided.
Understanding some general cultural requirements will be extremely helpful, such as taking into account the importance of Muslim prayer times and realising that Fridays are a particularly religious day for Muslims. Similarly, Muslim Malaysians will fast during the month of Ramadan, so it is best to avoid lunch or dinner meetings.
Even though Malay is the official language, English is normal for business discussions. In all business dealings it is important to respect age and titles and business dress is formal. It is recommended that women dress conservatively.
It is important to take the time to develop business relationships with Malaysians in order to build trust. It is recommended that you never enter into business with a Malaysian company without a letter of introduction from a bank or mutual acquaintance. This will help enormously with requests for future meetings as Malaysians prefer to do business with people they feel familiar with.
Patience is required as doing business can often be long and very detailed. Do not assume that once you have a contract it signifies a final agreement. It is common for negotiations to continue after a contract has been signed.
