Law and Compliance in Malaysia

Overview by

Business Contract

General Observation
Called "Contract of Service" or "Contract of employment", the contract is deemed to exist as soon as the employee starts to work. The signature is only a formality, but any contract of at least one month's duration must be written. The trial period varies between 1 and 6 months for non-managerial staff. Only legal measures govern the work contract. In large national companies and in large trade associations there are collective agreements. The form of the work contract is inalienable, hiring conditions rather rigid and the constraints of dismissal flexible.
Law Applicable to the Contract
Civil Law Act 1956, Contract Acts 1950 (and amendments).
Language of Domestic Contract
Malay (and/or English)
Other Laws Which Can Be Used in Domestic Contracts
Malaysia is a signatory to the Vienna Convention on contracts, so the CISG can replace national law when there is international trade in goods between States which have ratified the Convention.

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Legal Framework of Business

Equity of Judgments

Independence of Justice
The judiciary in Malaysia is not independent. There is excessive influence of the executive over the judiciary, especially in politically motivated cases.
Equal Treatment of Nationals and Foreigners
Foreigners cannot be guaranteed an impartial trial from the country's judiciary.
The Language of Justice
The judicial language used in the country is Bahasa Malaysia.
Recourse to an Interpreter
Having an interpreter is possible.
Legal Similarities
The main source of the law in Malaysia is the constitution of 1957 (amended in 1963). The country's legal system is based on English common law and the judicial review of legislative acts in the Supreme Court. Islamic law is applied to Muslims in family matters. Each state in Malaysia has its own constitution which sometimes results in variations of law from state to state. Malaysia has not accepted compulsory ICJ jurisdiction.

The Different Legal Codes

Penal Code Penal law
National Property Code
Property law
Islamic Family Code Islamic law governing cases relative to Muslims
Islamic Penal Code (Sharia) Islamic law governing cases relative to Muslims
Checking National Laws Online
Attorney General's Chambers
Other Useful Resources
CLJ Law, Law Database of Malaysia.
Lawyerment, Malaysian online laws.
Country Guides
, Guide to doing business in Malaysia: legal system.

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The Jurisdictions

Federal Court The Federal Court is the highest national authority
Court of Appeal The Court of Appeal receives appeals concerning the decisions made by the High Court, including criminal cases.
High Courts There are two High Courts in charge of all civil and criminal cases (non Islamic)
Sessions Courts Criminal cases not punishable by death, car accidents
Magistrates' Courts Civil cases under 25 000 RM
Syariah Courts Cases relative to Muslims (marriage, inheritance..)
Penghulu Courts, Native Courts Village cases affecting the Asian and Malay speaking population, customary law
Courts for Children Children's tribunal
Special Court Cases involving the rulers, including the King

Court Officials

Attorney General
Chief justice of Malaysia, President of the Federal Court, President of the Court of Appeal
Notary (tetuan)
Village headman
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