Malaysia Country Profile

Snapshot of the Malaysia Country Profile


Malaysia has good infrastructure and an institutional foundation for a competitive market-based economy firmly in place. However, the number of high-profile corruption cases, increasing ethno-religious tensions, and growing political instability have led to growing investor concerns that doing business in Malaysia is a riskier prospect than in the past. Moreover, market-based principles are not applied in cases involving individuals with high-level political access. According to several sources, Malaysian business executives rank corruption as one of the most problematic factors for doing business in the country, and a substantial amount of the corporate respondents admit to having paid bribes or knowing someone who has done so, mainly to avoid inconvenience. The government has recognised the problem and promised to curb corruption, but results have so far not met the expectations.

Positive developments in relation to corruption and investment:

  • Investors in industries prioritised by the government can often negotiate favourable terms with respective line ministries or other regulatory body. This can include assistance in navigating a complex web of regulations and policies in the area.
  • The overall regulatory environment in Malaysia has significantly improved in recent years.

Risks of corruption:

  • For public procurement, closed-door negotiations are allowed in cases where it is possible to help local companies obtain a foothold in the economy through the acquisition of a tender. The secrecy of the awarding procedure has fostered corruption.
  • The judiciary is reportedly not independent and there have been several instances of selective prosecution, preferential treatment and arbitrary or politically motivated verdicts.
  • The construction sector is perceived as the sector with the lowest level of integrity and transparency.