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Consultancy Agreement Template for Malaysia

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Key Requirements PROMPT example:

Consultancy Agreement

I need a consultancy agreement for a freelance consultant who will provide strategic business advice for a period of 6 months, with a focus on market expansion strategies. The agreement should include a clear scope of work, payment terms based on project milestones, confidentiality clauses, and a termination clause with a 30-day notice period.

What is a Consultancy Agreement?

A Consultancy Agreement sets out the terms when you hire an external expert or advisor to provide specialized services to your business in Malaysia. It clearly defines what the consultant will do, how much they'll be paid, and how long the arrangement will last.

The agreement protects both parties by spelling out key details like confidentiality rules, intellectual property ownership, and performance standards. Under Malaysian contract law, it creates binding obligations while keeping the consultant separate from your regular employees - important for tax purposes and Employment Act compliance.

When should you use a Consultancy Agreement?

Use a Consultancy Agreement when bringing in external expertise for specific projects or specialized advice in Malaysia. This applies when hiring IT consultants, management advisors, technical specialists, or industry experts who aren't joining as regular employees. The agreement becomes essential for high-value projects or when sharing sensitive business information.

It's particularly important when engaging consultants for regulatory compliance work, technology implementations, or strategic planning. Malaysian businesses need this agreement to protect intellectual property, maintain confidentiality, and clearly separate consultants from employees under local employment laws.

What are the different types of Consultancy Agreement?

Who should typically use a Consultancy Agreement?

  • Hiring Companies: Malaysian businesses seeking external expertise, from startups to large corporations who need specialized skills or advisory services
  • Independent Consultants: Professional advisors, subject matter experts, and freelance specialists who provide services across various industries
  • Legal Teams: In-house lawyers or external law firms who draft and review Consultancy Agreements to ensure compliance with Malaysian laws
  • HR Departments: Human resource managers who coordinate consultant engagement and maintain clear separation from employment relationships
  • Project Managers: Team leaders who oversee consultant deliverables and manage the consulting relationship day-to-day

How do you write a Consultancy Agreement?

  • Scope Definition: List specific services, deliverables, and project timelines the consultant will provide
  • Consultant Details: Gather complete business information, qualifications, and relevant certifications
  • Payment Terms: Define fees, payment schedule, expenses policy, and invoicing requirements
  • Project Specifics: Document work location, equipment needs, and reporting structure
  • Legal Requirements: Identify intellectual property rights, confidentiality needs, and termination conditions
  • Documentation: Our platform generates customized Consultancy Agreements that include all these elements, ensuring Malaysian legal compliance

What should be included in a Consultancy Agreement?

  • Parties & Scope: Full legal names, addresses, and detailed description of consulting services
  • Duration & Terms: Clear start date, end date, and renewal conditions of the consultancy
  • Payment Details: Fee structure, payment schedule, expenses policy, and tax considerations
  • Confidentiality: Protection of business secrets and data handling under Malaysian law
  • IP Rights: Ownership of work products and intellectual property transfer terms
  • Termination: Conditions for ending the agreement and notice periods
  • Governing Law: Malaysian jurisdiction and dispute resolution procedures
  • Our platform automatically includes these essential elements in every Consultancy Agreement, ensuring full legal compliance

What's the difference between a Consultancy Agreement and an Advisory Agreement?

A Consultancy Agreement differs significantly from an Advisory Agreement in several key aspects, though both involve external expertise. While they may seem similar at first glance, understanding their distinct purposes helps choose the right document for your situation.

  • Scope and Deliverables: Consultancy Agreements typically involve specific project-based work with clear deliverables and timelines, while Advisory Agreements focus on ongoing strategic guidance without concrete deliverables
  • Duration and Commitment: Consultants usually work on fixed-term projects, while advisors often maintain long-term relationships with less structured engagement
  • Legal Status: Under Malaysian law, consultants maintain greater independence and usually work with multiple clients, while advisors often have closer ties to the organization and may hold formal positions
  • Payment Structure: Consultancy Agreements typically specify project-based or hourly fees, while Advisory Agreements often involve retainers or equity compensation

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