PETALING JAYA: Malaysia trails behind Thailand, Vietnam and Singapore in terms of business complexity in a latest report, as the country is found to be relatively more complex to do business compared to its neighbours.
According to the Global Business Complexity Index 2019, Malaysia is ranked the 25th most complex out of 76 jurisdictions that were analysed worldwide.
Among its regional neighbours, Thailand (73rd), South Korea (61st), Japan (59th), Hong Kong (56th), Taiwan (46th), Singapore (42nd), Vietnam (27th) and India (28th) were all seen as more straightforward environments for international firms to operate in.
However, the report by international administrative services provider TMF Group found that Malaysia was less complex than the Philippines (20th), China (9th) and Indonesia (2nd).
Within Asia, Malaysia is the ninth simplest place to do business.
TMF Group’s managing director Sharon Yam said that the government has undertaken efforts to make the business environment in Malaysia more conducive for the private sector.
“From the Companies Act 2016 and Companies Regulations 2017, a single online ‘superform’ was introduced to replace the multiple forms which were previously required by business individuals who want to incorporate a company in Malaysia. Digitalisation reduces the complexity via online submissions.
“However, the country’s digital infrastructure is still not as mature yet and further investment is required,” said Yam in a statement yesterday.
According to the report, Malaysia is seen to have a strong labour law wherein the services of an employee cannot be terminated unless there is a just cause or good reasons provided objectively.
The country is also among the minority 30% of jurisdictions worldwide where the responsibilities of directors and officers of companies have increased over the last three years.
“Malaysia still has plenty of attractive advantages for businesses looking to set up here or get established. Its legal and accounting practices are derived from the British system and familiar to most international companies.
“In the area of accounting and tax, for example, it scores well for its adherence to International Financial Reporting Standards, compared with much of the rest of the region which continues to use a local Generally Accepted Accounting Principles framework.”
The Global Business Complexity Index 2019 found that Greece tops the index as the world’s most complex business environment. The Cayman Islands, on the other hand, was the least complex country of all 76 surveyed.