MALAYSIA DEBT COLLECTION
MALAYSIA DEBT COLLECTION PROFILE
Days Sales Outstanding (DSO)
Payments in Malaysia take place fairly rapidly: the payment behavior is good and delays are rare, although likely if the transaction is not secured.
Late payment interest
When it comes to late payers, however, the law provides no particular framework. Thus, late payment interest must have been negotiated as part of the contract in order to be applicable. In practice, such interest is seldom paid and would only constitute a negotiation tool.
Similarly, collection costs must be agreed upon in writing when negotiating the contract, but they would essentially be paid to the creditor upon court request. Therefore, and as for late payment interest, they would essentially be used as negotiation tools during pre-legal collection.
Orchestrated negotiation first
Amicable settlement opportunities should always be considered as an alternative to lengthy legal proceedings. Prior to commencing formal legal action, obtaining a payment instalment agreement or, at least, a formal debt recognition title is always worthwhile. In addition, verifying whether the company is still in activity and whether the debtor is solvent: if insolvency proceedings have been initiated, it indeed becomes impossible to enforce a debt (see below).