Reviews of the literature suggest the Malaysian third sector lacks basic descriptive information. Research on what makes up the sector is scarce, indicating little effort was undertaken to define and identify its components from the Malaysian perspective. This paper proposes the scope of the Malaysian third sector by suggesting its boundaries and identifying the constituents. Inclusion was based on the structural-operational definition of third sector organisations developed by Salamon and Anheier (1992, 1996) and the primary basis for exclusion is distribution of profits to shareholders and promoters. It is proposed that social, voluntary, non-governmental and nonprofit organisations make up the Malaysian third sector, while state linked organisations and profit-distributing organisations such as cooperatives and social enterprises are excluded. Knowing the third sector’s boundaries and constituents would allow more focussed research to be undertaken; enabling actors, researchers, and policymakers to identify issues and develop policies and strategies to address them.

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Regulation protects the third sector from mismanagement, provides data for policy development, and increases public trust and confidence in its organisations. Different agencies regulate Malaysian third sector organisations (TSO), based on their legal forms and varying activities or functions. Yet, can different regulations governing organisations with similar objectives effectively address issues affecting the sector as a whole? This study provides an overview of the Malaysian third sector regulatory landscape and examines the operational challenges caused by the multiple regulator environment. Third sector actors and regulators were interviewed to understand how they navigate legal and regulatory requirements. Findings show that regulation is hampered by discrepancies surrounding the interpretation and application of laws. This Malaysian study shows that regulatory inconsistencies affect the sector’s operational efficiency and diminish trust between the TSOs and regulators. Based on these findings, uniformity in regulation is crucial to build trust in the sector, as well as between actors and regulators.

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