Malaysia Climbs to 18th in the World in Ease of Doing Business as Business Regulations Improve in East Asia and the Pacific

October 19, 2011

Washington D.C., October 20, 2011— A new report from IFC and the World Bank finds that across the globe Singapore and Hong Kong SAR, China, provide the friendliest regulatory environments for local entrepreneurs. Within the East Asia and the Pacific region, China advanced the most in making its regulatory environment more business-friendly over the past six years.
Released today, Doing Business 2012: Doing Business in a More Transparent World assesses regulations affecting domestic firms in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency, and trading across borders. This year, the rankings on ease of doing business have expanded to include indicators on getting electricity.  The report finds that getting an electrical connection is most efficient in Iceland; Germany; Taiwan, China; Hong Kong, China; and Singapore. Malaysia ranks 59 in getting electricity.

Singapore topped the rankings on ease of doing business for the sixth straight year. Hong Kong SAR, China, held onto the second spot—in part by introducing an online system for company registration and making it easier to secure an electricity connection.

Fourteen of the region’s 24 economies improved business regulations in the past year. The Solomon Islands, Tonga, Vanuatu, and Malaysia improved in three or more areas measured by Doing Business. Brunei Darussalam’s rank climbed to 83, partly because the country made it easier for businesses to get an electrical connection. Malaysia rose five places in the global ranking, to 18, by implementing regulatory reforms—including a new one-stop shop for start-ups, computerization of commercial courts, and improved insolvency proceedings. Company, tax, social security and employment fund registrations can now be done in a single place, in a single day.

“Malaysia’s ranking among the world's top 20 countries for Doing Business is a remarkable achievement”, says Annette Dixon, World Bank Country Director for Malaysia. “There is of course much scope to improve the business environment even further”, Ms. Dixon adds: “The Government of Malaysia is working actively in identifying and addressing obstacles to doing business”.

As the report notes, it currently takes 260 days and 22 procedures to obtain a construction permit in Malaysia. PEMANDU, the government's Performance Management Delivery Unit, is overseeing an entry-point project in the hospitality sector to experience first-hand the start up of a business. As a result of the obstacles encountered, PEMANDU is working to simplify the process for dealing with construction permits, which will benefit the overall business environment.

“Malaysia's significant climb in the overall ranking is a testament to the success of PEMUDAH in bringing together the private sector and the highest levels of government to improve the business environment”, says Frederico Gil Sander, World Bank Country Economist for Malaysia. PEMUDAH is the government’s Special Taskforce to Facilitate Business.

Malaysia also continued to improve the computerization of its courts by introducing a system making it possible to file complaints electronically. In addition, dedicated commercial courts were introduced to handle foreclosure proceedings. However, paying taxes in Malaysia became costlier for firms with the reintroduction of real estate capital gains tax. But on the other hand tax compliance was made easier with the improvement of electronic systems and software.

New data show that improving access to information on business regulations can aid entrepreneurs. In the region, two-thirds of the economies have put application requirements for building permits in public notices or online. “Effective use of information technology can make things easier for entrepreneurs,” said Sylvia Solf, lead author of the report. Hong Kong SAR, China; Malaysia; the Solomon Islands; Taiwan, China; Tonga; and Vanuatu have all used new technologies to simplify business start-up, made it easier to register property, or modernized the court system.

Over the past six years, a new measure shows that 22 economies in East Asia and the Pacific have made their regulatory environment more business-friendly. “Making business regulation more transparent and efficient increases opportunities for economic growth,” said Augusto Lopez-Claros, Director, Global Indicators and Analysis, World Bank Group. “In East Asia and the Pacific, businesses have benefited from the region’s broad and sustained regulatory reforms.” 

About the Doing Business report series
Doing Business analyzes regulations that apply to an economy’s businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and resolving insolvency. The aggregate ease of doing business rankings are based on 10 indicators and cover 183 economies. Previous year’s rankings are back-calculated to account for the addition of new indicator(s), data corrections, and methodology changes in existing indicators so as to provide a meaningful comparison with the new rankings.  Doing Business does not measure all aspects of the business environment that matter to firms and investors. For example, it does not measure security, macroeconomic stability, corruption, the level of skills, or the strength of financial systems. Its findings have stimulated policy debates in more than 80 economies and enabled a growing body of research on how firm-level regulation relates to economic outcomes across economies.

About the World Bank Group
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world.

Media Contacts
In Washington, DC
Nadine Ghannam
Tel : +1 (202) 473-3011
In East Asia and Pacific
Hannfried von Hindenburg
Tel : +852 2509-8115
In Washington, DC
Carl Hanlon
Tel : +1 (202) 473-8087