Top-Rated Debt Collection Agency in Malaysia
Fast and reliable debt collection in Malaysia - no upfront costs, only pay for success. Request a FREE Consultation or upload your claim today.
Recover your debt in Malaysia easily.
Debitura specializes in debt recovery services in Malaysia, providing a comprehensive range of solutions that include managing accounts receivables, issuing debt collection notices, and carrying out pre-legal and legal debt collection, along with enforcement court proceedings. Our team of experienced professionals is well-versed in Malaysia's debt collection laws and regulations, ensuring that we offer efficient and effective solutions to help businesses recover outstanding debts.
Receive unwavering support throughout the entire process.
Tailored collection approach.
We have over 500 experts specializing in international debt collection.
Our success rate of 87% comes at the most affordable cost.
UCC is an international Australian company which started operations in 2006. We have since grown to include most of ASEAN. We use advanced IT systems and abide by the EU GDPR and Australian and Singapore privacy laws. We are members of the TCM Group and IACC.
Smart Global Recovery Management Sdn Bhd is a professional & registered Debt Collection Agency since 2012, we can recover money owed to you by other businesses quickly with our rich resources.
Michael Tie & Co was founded by Michael Tie who wanted to provide reliable, accessible and affordable legal services for everyone so that everyone has their rights equally protected. Michael Tie & Co provides affordable legal services to its clients, and most of Michael Tie & Co's legal fees are fixed. In order to achieve its vision and mission, Michael Tie & Co focuses on the areas of practice that cover most of the needs of Malaysians with affordable fees.
The ultimate guide about debt collection in Malaysia
Do you have a financial claim against someone in Malaysia? We can help you! We have helped hundreds of other businesses recover debt in Malaysia. Collecting a debt in Malaysia can be difficult, but we can help because we know the language and customs.
At Debitura, we always put people first. We try to get your money back while still having a good relationship with the customer. Our efforts are fair but firm. This means that we make sure your reputation is always our top priority! If you want to learn more about how to collect debt yourself in Malaysia, keep reading this guide. But if you would rather work with a local law firm that specializes in debt recovery, we can help you with that too.
At Debitura, we provide a simple way for you to collect your debt in Malaysia and other countries. To get started, upload your claim today. Within 24 hours, we will assess your case and provide you with 3 free quotes from local debt collection lawyers in Malaysia. We use a people-oriented approach and the latest tech-driven solutions to get results. This way we can provide better contact management and still preserve customer relationships. In addition, we have a network of debt collectors, attorneys, suppliers and vendors that we work with. We cherish all of these relationships because they allow us to get the job done.
Begin debt collection in Malaysia now without any cost. Simply create a free account and submit your case within 2 minutes.
Our pre-legal recovery process is proven and effective. We will make attempts to collect your claim for the first 3 months with a no-cure-no-pay policy.
In case your claim remains unpaid during the pre-legal phase, we'll offer you three quotes from our nearby debt collection attorneys.
You get access to our online portal where you can track your case in real-time
Introduction to collecting debt in Malaysia
Do you have trouble getting paid by your Malaysian customers? We can help you. When collecting debt in Malaysia, the person who owes the debt is called "the debtor," and the person who issued the debt or invoice is called "the creditor." If the original creditor collects the debt himself, this is called "first-party collection." If the creditor outsources the collection process to a third party, this is called "third-party collections."
- Even though domestic companies usually pay their bills on time, the law does not say what happens if they are late. This means that you should think about adding interest rates and collection costs to your contract. These things often have little impact, but it is still something to consider.
- Even though we have tried to make improvements, the courts are still not as independent or transparent as they could be. Lawsuits can take a long time, but recent reforms have helped them get resolved more quickly.
- Schemes of Arrangement are commonly used for reorganisations. This means that they help to change the way something is organised, usually to make it better.
Days Sales Outstanding (DSO)
In Malaysia, people usually pay their bills quickly. This is good behavior and delays are rare. However, if a transaction is not secure, there is a greater chance of a delay. The average DSO is 35 days.
Common payment types in Malaysia
Some ways that people usually pay for things are:
Bank transfers are a popular way to pay for things internationally. They are fast and secure, and there is a good network of banks that support them. When you export something, it means you send it to another country. Export transactions are usually guaranteed through Export Credit Insurance. This helps reduce the risk that the customer will not be able to pay. Allianz Trade has a worldwide network of risk offices that keep an eye on the financial well-being of customers. They also give customers a credit limit, which is the maximum amount of money they can trade with and claim if something goes wrong. Standby Letters of Credit and Documentary Letters of Credit are two ways that people can guarantee that they will be able to repay a debt. With a Standby Letter of Credit, a bank guarantees that the debtor can repay the debt. With a Documentary Letter of Credit, the debtor guarantees that they will have the money available to repay the debt.
You may be able to negotiate a down payment with local partners. Up to 25% of business transactions are also usually paid in advance. This means that the buyer pays part of the price before receiving the product or service. Advance payment terms can range from 20% to 30%.
The main types of corporate structures are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations
Liability for business debts means that the business is legally responsible for the debts. This is determined by the legal structures that are in place.
- Sole Proprietorship is an option for small businesses that are managed by one person. This means that the owner is responsible for any debts the business has. Two or more people can also choose to share ownership and responsibilities through a Partnership, which means that each partner may be held responsible for the actions of the other partners. Limited Liability Partnerships offer limited liability to the partners, which means that they are not responsible for the debts of the business.
- Private Limited Liability Companies are the most favored legal entities because they do not require any minimum capital funds while the shareholders' liability is limited to their contribution. Joint-Stock Corporations are used for larger structures willing to divide their capital into tradable shares. In these entities, the shareholders' liability is limited to the value of their shares.
- Foreign companies may settle in Malaysia through Representative Offices, but they cannot generate any income. Branch Offices may generate revenues, but only if they have been awarded a government contract. The Ministry of International Trade and Industry encourages foreigners to incorporate local subsidiaries. Joint Ventures would be incorporated as Limited Liability Companies.
The debt collection process in Malaysia
The debt collection process in Malaysia usually has several steps.
The image below explains the process we use for collecting debt in Malaysia:
1 Upload your claim:
You will need to find a debt collection partner if you want someone else to help you get your money back. You can upload your claim onto their website. If you use Debitura, we will provide you with 3 quotes from local partners in the Asia country relevant to your case. This is 100% free - no strings attached.
2 Amicable collection:
The collection process usually starts with sending reminders to the person who owes you money. This is called a campaign. The reminders go through email, SMS, letter, and other ways to communicate in the specific country. The goal is to get the debtor to pay or agree that they owe the debt and start a payment plan. Debitura offers a no-cure-no-pay solution for amicable collection, which means you only have to pay a small success fee if we recover your debt. Amicable collections with Debitura are, therefore 100% risk-free!
If the person you lent money to has not paid you back after you talked to them, it is time to decide what to do next. We will look at how much money you are owed, the chance of getting paid back, and other factors to help you decide what to do. There are three typical next steps:
If your claim is below €2,000-5,000, it is not usually worth it to take more legal action. In this case, we recommend "debt surveillance." This means that we will keep trying to contact the person you owe money to and try to reach an agreement about payment.
B: Legal collections:
We suggest beginning a legal process for bigger problems. The way it's done specifically depends on the problem and how big it is. Usually, it takes about a year and a half to finish.
C: Debt enforcement:
If the person you are owed money from has agreed that you are owed the money, or if there is a court order saying you are owed the money, you can go to the bailiff's court to get the money.
At Debitura, we can help you with all three steps in Malaysia.
Amicable collection in Malaysia
At Debitura, we offer a 100% risk-free and efficient process for Amicable collections. This means that you can submit your claim to us, and we will start working on it within 24 hours.
We will try to reach the person you owe money to using all of the ways we can in Malaysia. This includes e-mail, text messages, letters, phone calls, and social media. The goal is to:
A) make the person who owes you money pay the whole amount or
B) get the person to agree that they owe you money and start a plan to pay it back
If the person you are trying to get money from has said that they do not owe you money, you cannot try to resolve this peacefully. You must start by going through the legal process.
Late payment interest
If people do not pay on time, there is no law that says what happens. This should be talked about and agreed upon before it happens so that both people know what will happen. In practice, this does not happen often and is only used as a way to negotiate. For example, if someone owes you money and they do not pay, you can charge them 5% extra per year.
Get started with
amicable debt collection
Upload your claim and get started with our 100% no-cure-no-pay collection solution.
Legal collection in Malaysia
If the person you are claiming money from has not paid you during the first phase or if they dispute your claim, we will give you 3 free quotes from local debt collection attorneys. In the legal phase, our local attorney will contact your debtor and try to negotiate a payment. Our partners can also go to court and get a payment order through the legal system in Malaysia. This payment order can then be used to enforce your claim through enforcement court.
If the case is easy to understand, the law provides for relatively fast proceedings. If the case is more complicated, a full lawsuit would be necessary.
If people cannot agree on how to pay back money, they might go to court. The person who is owed the money would file a claim with the High Court. They would need to give the other person time to answer the claim in court. If the person does not answer, then the claimant could get a judgment in default from the courts. This means that the courts would award remedies, such as damages, specific performance or injunctions. Punitive damages may be awarded in Malaysia.
The judicial system in Malaysia is made up of many different courts. The most important ones are the Magistrate's Courts and Sessions Courts (among other tribunals). These courts deal with large commercial and insolvency disputes, as well as appeals from the lower courts. The Court of Appeal hears cases about decisions made by the High Courts. The Federal Court is the highest court.
The Malaysian legal system is based on British law, but it has been updated in recent years. For example, since 2009 there have been reforms that have made the judicial system more efficient. This means that there are now specialized courts (including Commercial Courts) to deal with specific types of cases. There are some rules that all courts have to follow. This makes it easier for the court system to work better. But there is still room for improvement. And sometimes people sue each other instead of solving their differences another way. This can take a long time.
Legal fees can be different depending on how difficult your case is and how big it is. To get the best price, we recommend that you compare multiple quotes from different attorneys. You can do this quickly and easily by using Debitura.
Get started with
legal debt collection
Upload your claim and get 3 FREE quotes from our local collection partners.
Debt enforcement in Malaysia
If you have proof that the person you are suing owes you money, you can go to court in Malaysia to get your money.
As soon as a judgment becomes final, it can be enforced. This usually happens when the debtor does not have enough money to pay the judgment. The creditor then asks the court for an order that allows them to get the money from the debtor's assets. This is only possible if the debtor's assets can be found.
The process and how much it costs will be different depending on your situation. You can upload your case onto Debitura. They will give you 3 different quotes to choose from within 24 hours.
Get started with
Upload your claim and get 3 FREE quotes from our local collection partners.
Insolvency proceedings in Malaysia
The final stage you can initiate if your debtor cannot pay his debts is an insolvency procedure. The goal of this procedure is to sell the debtor's assets and give the money to the creditors following the debt priorities.
- In Malaysia, a debtor cannot enter a CVA if they have charged some or all of their assets.
- Judicial Management will allow the director of the company or a creditor to apply for a court order to place the management of a company in the hands of a qualified insolvency practitioner which will be known as the Judicial Manager.
- A moratorium is put in place to allow the Judicial Manager to assist in the rehabilitation of the distressed company without any interference from creditors.
- The Judicial Manager will then manage the company for 6 months which can be extended for another 6 months upon application.
- Liquidation aims at obtaining cash from debtor's assets and may occur upon request by debtor or creditors.
The analysis is concluding that the risk of running a business in Malaysia is low. Based on this low score, You can feel reasonably confident that you will be able to get paid when trading with customers in Malaysia. Nonetheless, we always recommend doing a specific credit analysis on an individual customer basis before offering any credit. The low risk score is based on the following factors:
The economic risk in Malaysia
Our conclusion based on the economic risk factors, is that the economic risk in Malaysia is medium (3 out of 6). An economic risk of 3 out of 6 is low in Asia.
GDP and economic growth are critical drivers for economic risk.
The GDP of Malaysia is 372,7 bn. USD (2021), growing by 3,13% per year.
In terms of the size of its economy, Malaysia ranks #38 out of 183 countries and has a large economy.
In terms of growth rate, it is ranked #124 out of 183 countries and is therefore considered an excellent growing economy.
GDP per capita is 11371 USD, ranking Malaysia number #60 out of 183 countries. The result of this is purchasing power of citizens in Malaysia is high compared to the rest of the world.
You can see a more detailed picture of GDP and economic growth in Malaysia in the table below:
Another significant influencer for the economic risk score is the inflation rate and the interest rates. You can see a more detailed overview of monetary data points in Malaysia in the table below:
The inflation in Malaysia was 2,5% in 2021 which is considered a low inflation rate.
The interest rate for businesses is 3,44%.
The business environment risk in Malaysia
Our analysis shows that the business environment risk in Malaysia is low (2 out of 6), which is a low risk score in Asia.
The business environment risk are determined by the level of economic freedom and rights in a country. Take a look at the important facts for Malaysia in the table below:
In the above table, you can see, the property rights index is 85 in Malaysia, which is considered quite good in Asia.
The business freedom index is based on 10 indicators, using data from the World Bank’s Doing Business study. The Index is 87 in Malaysia, a good score for a country in Asia.
Malaysia's overall economic freedom index is 74 out of 100 and is based on factors such as the rule of law, regulatory efficiency, and market openness.
The political risk in Malaysia
The political risk in Malaysia is low, with a score of 2/6. This is a low political risk score in Asia.
The governance and political stability indicators are critical drivers for political risk. An overview of Malaysia can be seen in the table below:
The rule of law index analyses to which extent agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the quality of the courts, and the police's ability to enforce court orders.
When trading with businesses in a country, the rule of law index is critical as it describes your ability to enforce commercial contracts.
In Malaysia, the rule of law index is at 0,56 points, with the score going from -2.5 (weak) to 2.5 (strong). Malaysia has, therefore, a high rule of law index, which means you should have a good chance of enforcing your contracts. If your individual customers have good creditworthiness, you should therefore feel relatively safe when providing credit.
Other drivers for the low political risks are the weak control of corruption, the weak political stability index, and the large shadow economy that is 26,07% of Malaysia's GDP.
The commercial risk in Malaysia
In Malaysia, the commercial risk score is 1/4, which in our model is a very low score. This very low commercial risk score is low compared to the average in Asia.
The commercial risk is influenced by a country's international trade relationships. You can see some of the key facts for Malaysia in the table below:
Malaysia has a total of foreign exchange reserves of 116.92 bn. USD.
Malaysia has a positive trade balance of 7,07% of GDP. This means that Malaysia imports fewer goods and services than the country exports.
The annual growth of exports of goods and services has been growing 15,88% annually - now 68,9% of GDP. Import of goods and services represents 61,83% of the GDP in Malaysia.
The financing risk in Malaysia
We have calculated the financing risk to be 2/4, which equals a low risk. A low financing risk score is relatively low for countries in Asia.
The country's banking system, efficiency, and stability influence the financing risk. Additional facts and info can be found for Malaysia in the table below:
In Malaysia, the credit information sharing index is 8 on a scale from 0 (low) to 8 (high). The result of this is accessibility and quality of credit information available in Malaysia is high.
This makes it easy for you to understand the credit risk of your counterpart in Malaysia. Based on this, it should be possible to to find a good local credit rating agency that can help you analyse the creditworthiness of your specific customers.
Your juridical rights as a creditor are 7 out of 12 and, therefore, medium.
The low financing risk for creditors also impacts the medium interest rate in the private sector of 3,44%.
Debt Collection in Malaysia: Frequently Asked Questions (FAQ)
When collecting debt in Malaysia, the person who owes the debt is called the debtor, and the person who issued the debt is called the creditor. The process usually starts with sending reminders to the debtor, with the goal of securing payment or initiating a payment plan. If unsuccessful, there are legal options available with support from a debt collection partner such as Debitura. The debt collection process in Malaysia can take up to a year and a half to resolve, depending on the size of the debt and problem at hand.
The debt collection process in Malaysia has three main steps: pre-legal collection, legal debt collection, and debt enforcement. Pre-legal collection involves reminders to the debtor to pay or agree to a payment plan. If unsuccessful, legal action can be taken for larger debts. Finally, if the debt is still unresolved, debt enforcement can be pursued through the bailiff's court. Debitura can assist with all three steps and offers a risk-free solution for amicable collection.
If debt is disputed or not paid, legal options are available in Malaysia. A civil lawsuit can enforce payments, with specialized courts for specific cases such as the Commercial Courts. Legal action requires a local lawyer. Insolvency proceedings are also available to sell a debtor's assets to pay creditors. Debitura can provide 3 quotes from local debt collection attorneys to find the best price for legal services. Check the rules for each procedure, as judicial management and liquidation are also available depending on the case.
Debitura offers a no-cure-no-pay model for pre-legal collection of debts in Malaysia, with a success fee ranging from 10-20%. The cost of legal actions for debt collection varies depending on the specific case and desired actions. Debitura can provide you with 3 quotes from the best debt collection lawyers in Malaysia to help you choose the best option for your situation.
The duration of debt collection in Malaysia varies depending on the debtor and the complexity of the case. If it can be resolved in the pre-legal phase, the process usually takes 3-6 months. However, if legal action is required, it typically takes 12-18 months to collect the debt. The time frame can be influenced by many factors and may vary case by case.