Outsourcing to MALAYSIA: A Comprehensive Guide for Small Business Owners 

Outsourcing to MALAYSIA: A Comprehensive Guide for Small Business Owners 

Are you looking for one of the best Southeast Asian countries to outsource from? Why not try and check out Malaysia?  

Malaysia is a country that has shown consistent growth and development through the years. Its economy is fast-advancing towards technological innovation to cater to more businesses domestically and internationally. 

Malaysia’s ambitious economic plan is geared towards enhancing its business scene. Their government hopes to make Malaysia a business pillar in Southeast Asia by highlighting its natural resources and the proficiency of its people. One of their goals is to continuously boost the country’s economic growth through outsourcing industries such as IT, Business processes, and more.  

Get to know more about outsourcing to Malaysia through this guide! Read more below on why Malaysia may be your next outsourcing destination. 

Outsourcing Factors in Malaysia You Need to Consider 

1. Cost-Efficient 

On most outsourcing ventures, outsourcing a specific business function will cost less than hiring your own in-house team. Outsourcing in Malaysia would mean accessing an inexpensive workforce with the same level of skill, expertise, and dedication as those within your home country. 

The average salary in Malaysia is USD 17,805. Compared to the annual US salary which is USD 60,575, foreign companies based in US or Europe can significantly save up on costs due to Malaysia’s lower cost of living and employee income.  

2. Established Digital Infrastructure 

In Malaysia, the digital and e-commerce industries are continuously being developed. There are also programs on the national level that aims to catapult the country into a highly digitized and advanced economy. 

Outsourcing in Malaysia means having access to Artificial Intelligence (AI), E-Commerce, Big Data & Analytics, Nanotechnology, and Internet of Things (IoT) technologies. The Malaysian government is also implementing the creation of a more advanced digital infrastructure and internet ecosystem to attract more businesses into Malaysia. 

3. English Proficiency 

When choosing to outsource in Malaysia, the language barrier is rarely going to be a problem. The Malaysian government has taken several measures to ensure that all the individuals coming into their workforce have knowledge of the English language. 

To improve their English proficiency, the Malaysian education ministry has a ten-year plan to improve English teaching and learning starting from the preschool level. Designed to end in 2025, the English Language Education Reform already has stellar results. Malaysia is currently placed third among Asian countries when it comes to English proficiency.   

4. Pro-Business Policies 

Outsourcing is convenient to do in Malaysia because of the government’s pro-business policies. There is strong support for various projects that are geared to support both domestic and international business — especially the outsourcing sector. 

Malaysia’s National Development Policy (NDP) and National Vision Policy (NVP) ensure that their domestic workforce is given equal work opportunities and that these opportunities are extended to businesses around the world to make Malaysia a key player on the global stage. 

5. Competent Workforce 

For the success of your business, you want to outsource the best talent pool — and Malaysia has no lack of amazing talents. The country has skilled professionals across the IT, electronics, and finance industries. 

As mentioned above, the government places high importance on improving its workforce’s English proficiency. However, the educational reforms that are geared towards the improvement of their citizen’s skills don’t stop there. The Malaysian government is introducing more educational reforms to upskill their workforce so that they are more prepared for global work opportunities. 

Notable Industries in Malaysia 

The Malaysian outsourcing industry can be broken into three major domains: Business Process Outsourcing (BPO), Information Technology Outsourcing (ITO), and Knowledge Process Outsourcing (KPO).  Currently, Malaysia’s BPO industry is known as a world-class hub that is forecasted to grow to USD 1.5 billion by the end of 2024. 

In addition, Malaysia is rich in natural resources. This is one of the reasons why they are in the lead when it comes to timber and palm oil production. There is also a rise in industrial production — specifically electronics, pharmaceuticals, and medical technologies. Moreover, Malaysia is an important financial leader in Islamic finance. The country is also positioning itself to be a notable figure within the realm of digital technologies with its e-commerce and mobile applications. 

These are some of the industries aside from those mentioned above that you may want to check out when outsourcing to Malaysia: 

  • Electronics 
  • Pharmaceuticals 
  • Rubber Production 
  • Palm Oil Processing 
  • Medical Technology 

Outsourcing Challenges in Malaysia 

Despite the scale of Malaysia’s outsourcing-related services, there is still a low supply of talents with high educational backgrounds or with specialized skills. Even if there is an emphasis on the development of Malaysia’s information and communications technology (ICT) sector, their education system is still catching up to reflect the new developments in the field of ICT. They are having a hard time equipping their workforce with the essential skills they would need to pursue highly-technological fields.  

However, these are challenges that can be easily addressed. The Malaysian government must make educational reforms to benefit its growing workforce. In time, their workforce would be better equipped and ready to tackle a career in the ICT industry.  

Start Outsourcing to Malaysia 

By reading through the guide above, you have a better idea of the outsourcing opportunities you can have when you choose to outsource in Malaysia. The country is an amazing outsourcing hub, especially when you want to look into the BPO industry. They have a skilled workforce, inexpensive services, and business-friendly policies to help you grow your business. Furthermore, they are continuously developing and upscaling their infrastructures to attract more business around the world. 

Before starting any outsourcing venture, you must be prepared to outsource your business operations to a country that could be halfway across the world from where you are. You must also be knowledgeable about local laws, culture, and other factors that can play a part in your outsourcing process.  

Malaysia is just one of the many outsourcing destinations you may come across. There are still many countries where you can find what you and your company need. Interested in outsourcing to Malaysia? We are happy to answer any questions you may have.  

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