Malaysia Global Expansion Playbook

Introduction

Malaysia has emerged as a promising destination for companies looking to expand their business globally. The country’s strategic location, favorable government policies, and robust infrastructure have made it an attractive investment destination for many industries. To ensure a successful execution and growth, companies planning to expand to Malaysia should develop a comprehensive global expansion playbook.

Research & Budget

Before expanding to Malaysia, companies should research and evaluate the macroeconomic factors, target customer base, regulatory analysis, cost of expansion, and go-to-market strategy. Companies must also take into account technical steps such as company incorporation requirements, tax regimes, and government agencies. For instance, Malaysia has a corporate tax rate of 24%, and companies must register with the Companies Commission of Malaysia. After conducting research, the finance team should create a budget that includes revenue targets, human resource costs, professional vendor fees, office space, and marketing expenses.

Legal Operations

Malaysia has a thriving business process outsourcing industry, providing many options for professional service providers. However, it can be challenging for companies to identify trustworthy local partners, given the volume of options available. Companies should research and evaluate potential partners carefully to avoid government bureaucracy and confusing paperwork. Companies can either set up a local entity or leverage an International Employer of Record (EOR) solution. If a company opts for a local entity, it must complete the corporate establishment process before hiring a local team and starting sales.

Go To Market

Companies must determine their go-to-market global expansion strategy, which can either be a single-country, regional, or global approach. For companies looking to expand to Malaysia, a single-country strategy is preferable due to the size and complexity of the market. Companies must also consider Malaysia’s relationship with its neighboring countries, such as Indonesia and Thailand, to determine if Malaysia is the best launching pad for a cross-ASEAN hub. Startups, scale-ups, and enterprise companies can benefit from using lean principles to plan their go-to-market strategy. By launching a minimum viable product (MVP), companies can gain insights from local customers’ reception and adapt to meet their needs.

Hire A Team

Malaysia has a vast talent pool, given its history of outsourcing and its status as a hub for international tech companies. To ramp up sales and operations, companies should hire as many local nationals as feasible. During the budget phase, companies should map out the first ten hires carefully. Insufficient planning for employer social contribution levels, termination protections, intellectual property protection, and mandatory benefit programs are common mistakes that globally expanding businesses make. These can be mitigated through research and working with local partners.

Build, Measure, Learn

After hiring a team and establishing a go-to-market strategy, companies should initiate the lean cycle of Build, Measure, Learn. It is crucial to treat the local operation as a startup within the company. Companies must re-establish product-market fit through MVP launches, data gathering, and iterations. Using the same product or service that works in their home market may not meet local customers’ expectations. Local consumers’ problems in Malaysia will vary greatly from those in more advanced economies. Conducting on-ground research from first principles is highly recommended to identify and solve local problems. By building a global expansion playbook tailored to Malaysia, companies can achieve commercial growth.