The opportunities in Malaysia when expanding your business globally
Malaysia’s vibrant economy and strategic advantages offer significant growth opportunities for UK and European businesses, but it’s important to look at the whole picture.
Located in the heart of southeast Asia, Malaysia offers a mix of geographical benefits, strong economic growth and a welcoming business environment. Its diverse market and large English-speaking population make it a promising place for both entrepreneurs and established businesses from the UK and Europe.
Malaysia ranks highly for business ease, with the World Bank’s Doing Business report ranking it at number 12 out of 190 in 2020. Its booming digital economy and focus on tech-driven commerce open up plenty of opportunities for growth.
Understanding Malaysia’s business landscape
Look further into Malaysia’s business landscape and you’ll find modern tech start-ups, traditional industries and everything in between. This diversity makes it an exciting place for businesses eyeing global expansion. Kuala Lumpur and Penang are hotspots for innovation, attracting emerging businesses and foreign investments with their solid infrastructure and government incentives. Meanwhile, rural parts of Malaysia are full of opportunities in agriculture and manufacturing.
Thanks to the government’s pro-investment policies, foreign investors can tap into opportunities and support systems designed to foster growth and innovation.
In many professional settings, you’ll find people speaking English, which makes business communications straightforward for companies who can’t speak the local language. Additionally, the young, skilled workforce helps streamline business operations.
Business opportunities in Malaysia
Many businesses make the leap into Malaysia for its strategic position as a gateway into the ASEAN market. Projections suggest the region will become the fourth-largest economy in the world by 2050.
But it’s not just about its location; Malaysia is also forging ahead into the digital age. Efforts to boost the digital economy are in full swing, with investments into lightning-fast internet and seamless digital payment solutions at an all-time high. This digital push is creating a playground for e-commerce businesses to thrive.
Internet usage is one of the highest in the world at 97.4%, higher than South Korea and the USA. There’s been a noticeable shift towards online shopping and tech-driven solutions among Malaysian consumers in recent years, again something that e-commerce businesses can take advantage of.
When you consider Malaysia’s population of 34 million, then add in rising income levels and a growing middle class, it’s clear that Malaysia offers a big opportunity for forward-thinking businesses.
Malaysia is renowned for its exports, particularly its natural resources, agricultural products and electronic equipment. In 2022, top exports to the UK included integrated circuits, broadcasting equipment and rubber apparel. For the EU, this was electronic equipment, machinery and animal and vegetable products. If you’re sourcing suppliers, you might consider Malaysia’s other significant exports such as timber, furniture, cocoa and palm oil.
Practical tips for expanding into Malaysia
Cultural etiquette and building relationships
Understanding local culture is key in any global expansion plan. There are subtle differences in business etiquette that can affect your success. For instance, there’s a big emphasis on respect and hierarchy in Malaysian culture, as well as on saving face, meaning communications are often polite and indirect.
Personal relationships are important. It might take several meetings and social gatherings to build trust before finalising an agreement.
Marketplaces for online sellers
A cost-effective strategy for online sellers to access Malaysia’s digitally savvy consumers is through established e-commerce marketplaces such as Lazada, Shopee or TikTok Shop. Selling here can significantly reduce the initial setup costs associated with physical stores or local entities. They let you tap into a vast network of consumers already familiar with online shopping. On the flip side, you’ll need to consider marketplace fees, competitive pricing strategies and expenses to market on the platforms.
Finding suppliers in Malaysia
As one of the top export countries in Southeast Asia, there’s no shortage of suppliers in Malaysia. Popular places to find trustworthy suppliers include online directories such as Ailbaba.com and the government’s official trade directory, as well as wholesale markets and trade shows.
- Open 10+ local currency accounts with local account details
- Direct CNH payments to 1688.com
- Pay suppliers, partners and staff in 40+ currencies and 130+ destinations
- Collect secure payments from 100+ marketplaces and payment gateways, including Amazon, AliExpress, Paypal and Shopify
- Lock in currency conversion rates for up to 24 months
The role of digital finance in expanding to Malaysia
Handling the financial aspect of expanding into Malaysia means prioritising digital finance tools. These can help with faster cross-border payments and simplify currency management while saving costs.
Streamlined payments
Fast and reliable payment systems are vital, especially for international transactions, where delays are common. In Malaysia, businesses particularly value fast payments, so a slick payment process can help strengthen trust.
Multi-currency accounts
For many global businesses, using a multi-currency account has been a gamechanger. They let you hold, convert, pay and get paid in different currencies, so you can speed up transactions and bypass constant currency exchanges. The World Account allows you to receive funds in 20+ currencies including USD, GBP, EUR, SGD and MYR, and pay in 40+ currencies across 130+ countries and regions.
Currency exchange risk management
With tools like forward contracts, you can reduce risks associated with fluctuating exchange rates. In the first half of 2023, the rising cost of doing business in Malaysia was partly attributed to a weak Malaysian ringgit against the US dollar. A forward contract allows you to lock in an exchange rate and plan for future costs when working with Malaysian suppliers.
How WorldFirst’s MYR receiving account can benefit businesses
We’ve just launched a Malaysian ringgit receiving account, taking the number of currency accounts to over 20. Here are some ways you can use your MYR currency account:
- Receive Malaysia ringgit from third-party businesses, your online storefront or marketplaces in Malaysia, for free
- Pay Malaysian suppliers in their local currency
- Transfer funds to your supplier instantly, for free, if they also hold a World Account
*Transfers between World Accounts are free.
Have a World Account already? Create an MYR receiving account in seconds.
How to make MYR transfers
- Log in to your World Account
- Create a new receiving account
- Select MYR as the receiving account and give it a nickname
- Add MYR into your World Account, from your bank, your online store or a marketplace
Open a World Account for free today and start expanding your business to Malaysia.
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