For many North American businesses, Eastern Asia and Oceana are two prime regions for hiring contractors. Specifically, Malaysia has emerged as an area rife with talent and workers eager to engage with global businesses. And while it’s a great opportunity for businesses to get the services they need for affordable rates, it also prompts a question of how to pay contractors in Malaysia.
Many small businesses aren’t equipped to send funds around the world to pay a contract workforce. Those that are might find themselves facing high fees and a lack of transparency when it comes to sending funds. No matter your experience with global contractors, these are problems that need solutions before you can tap into the talent pool Malaysia offers.
Here’s how to contract workers in Malaysia, and to make sure they’re paid on-time and in full, in the most efficient way.
Why hire contractors in Malaysia?
As mentioned, Malaysia is a global hub for contractors. It’s not only companies in North America seeking Malaysian talent—companies in East Asia, Europe and other regions of the world recognize Malaysia’s potential to supplement the growing need for a globalized workforce.
The cost of living in Malaysia is much more affordable than even other Oceana countries. In fact, it’s just under 50% of the cost of living in North America. That means companies can essentially contract Malaysian workers for nearly half the price—or select top talent without paying a significant premium. It allows even small businesses to open their talent pool up without burdening themselves with significant cost.
Malaysian contractors also represent an eager technological workforce. As Malaysia continues to modernize from a producer economy to a service economy, tech skills and IT savvy are on the rise. Whether you need a full-stack developer or a custom coder, Malaysia’s talent pool is rife with opportunity.
Finally, Malaysian contractors are easy to engage. Malaysia is a melting pot of languages and cultures thanks to its location, and it’s easy to find contractors who speak a variety of languages, including English, with relative proficiency. It’s easy to work with contractors who can easily surmount the language barrier—especially for more complex directions.
Currency and transfer considerations
Paying contractors in Malaysia is very simple today—especially via digital payment methods. The United States Dollar (USD) is widely accepted and offers a strong option vs. the local currency, the Malaysian Ringgit (MYR). The ratio of USD to MYR is roughly 1:4, which means the dollar has about four times the purchase power. It’s often much-preferred by contractors, which can save on currency conversion costs.
As far as actual transfer of funds, options vary. A significant portion of Malaysian workers are unbanked or prefer to use digital banking resources, which can make traditional modes of payment more difficult. That said, traditional banked contractors are common.
Ways to pay contractors in Malaysia
Not every business will have access to the same global payment methods, and not every contractor in Malaysia will prefer the same mode of payment. To that end, it’s important to understand your options for how to pay contractors in Malaysia.
- Wire transfers. Though they’re instant and secure, wire transfers are costly for businesses. It’s best to keep these types of payments few and far between, and to use them for larger amounts. Keep in mind that wire transfers also only apply to traditionally banked contractors.
- Check or money order. Largely outdated modes of payment, check or money orders are still valid options for paying contractors in Malaysia. This is an option for unbanked contractors. That said, physical payment is slow and impossible to track around the world.
- Bank transfer. Bank transfers are great for traditionally banked contractors and can be a wonderful way to pay regular contractors. Be advised that bank transfers take a few days to land and many banks require verification before transferring sums to foreign accounts, which could result in stopped funds or longer transfer times.
- Digital payments. Digital payments are the fastest-growing way to pay contractors in Malaysia because they cater to banked and unbanked contractors alike. They’re also extremely visible and offer optimal currency conversion rates, unlike banks, which tend to obscure the exchange rate and charge additional fees.
While all of these are valid options when it comes to paying contractors in Malaysia, it’s best to understand what’s best for your business and your contractors before choosing one.
The best way to pay independent contractors in Malaysia
For most businesses (and contractors), the best way to pay independent contractors in Malaysia is through a digital payments platform like Veem. Lack of bank fees, improved transparency, quickness and ease of currency conversion makes it often the simplest option for both parties. Businesses don’t pay high fees to tap into the Malaysian contractor market, and contractors get paid on-time, with full transparency.
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