Proton is planning on teaming up with manufacturers in Iran and Turkey to create the unique vehicle.
The car could boast special features like a compass pointing to Mecca and a dedicated space to keep a copy of the Koran and a headscarf.
The idea came during a visit to the Middle East by a delegation of Malaysian politicians and businessmen.
Malaysian press reports say officials in Iran originally suggested the idea.
Safety features or fuel economy is one way of selling a car, but Proton thinks vehicles designed specifically for Muslims across the world represent a huge gap in the market.
Proton is the most dominant car on the streets here but the company has suffered recently after the government allowed more foreign cars to be imported.
The firm has been in talks recently with VW about a takeover by the German car giant.