Outsourcing Agreement Malaysia

Outsourcing has become a popular business strategy for many companies around the world. It is a cost-effective way to access specialized skills and expertise without having to invest in additional resources. Malaysia has emerged as a leading outsourcing destination in recent years due to its skilled workforce, favorable business environment and competitive costs. If you are considering outsourcing agreement in Malaysia, here are some things you need to know.

Benefits of outsourcing in Malaysia

One of the key advantages of outsourcing in Malaysia is cost savings. The country`s low labor costs make it an attractive destination for businesses looking to reduce their expenses. Additionally, Malaysia offers a range of tax incentives and other benefits to foreign investors, making it an ideal location for outsourcing.

Another advantage of outsourcing in Malaysia is access to a highly skilled and educated workforce. The country has a large pool of talented professionals with expertise in areas such as IT, engineering, finance and accounting. Many of these professionals have been trained in western universities and are fluent in English, making communication and collaboration with clients from the US, UK, and other English-speaking countries easier.

Finally, Malaysia`s business-friendly policies and regulatory environment make it easy for companies to operate in the country. The government has implemented a series of economic reforms to attract foreign investment and promote business growth. This includes establishing special economic zones, providing tax incentives and streamlining business registration processes.

Legal considerations in outsourcing agreement in Malaysia

When outsourcing in Malaysia, it is important to be aware of the legal and regulatory framework governing the outsourcing agreement. One of the key issues to consider is intellectual property rights. The outsourcing contract should clearly define the ownership and use of intellectual property created or used during the course of the project.

Another important consideration is the protection of personal data. Malaysia has enacted data protection laws that regulate the collection, processing, and storage of personal data. The outsourcing agreement should ensure that the service provider complies with these laws and takes adequate measures to protect the data.

Finally, it is important to be aware of the relevant labor laws and regulations in Malaysia. The outsourcing agreement should specify the terms and conditions of employment, including working hours, wages, and benefits, as well as ensuring compliance with applicable labor laws.


Outsourcing in Malaysia offers many benefits to companies looking to access specialized skills and expertise at a lower cost. However, it is important to be aware of the legal and regulatory framework governing outsourcing agreements. A well-drafted outsourcing agreement can help ensure a successful outsourcing project that benefits both the client and the service provider.