KUALA LUMPUR, November 1, 2018 – Malaysia carried out six business reforms in the past year, regaining a position among the top 20 ranked economies in the world, says the World Bank Group’s Doing Business 2019: Training for Reform report, released yesterday.
The acceleration in reforms helped Malaysia advance nine places to a global rank of 15.
The reforms of the past year covered the Doing Business areas of Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property, Trading Across Borders and Resolving Insolvency.
"The World Bank congratulates Malaysia for making significant improvements in its business environment as captured by our Doing Business 2019 Report. The country’s consistent effort to adopt international regulatory best practices has made this achievement possible. We are committed to sustaining our support for this important reform agenda going forward with a focus on areas where entrepreneurs still experience difficulties," said Mara Warwick, World Bank Group Country Director for Malaysia.
The reforms implemented in the past year were:
- Starting a business was made easier and faster by introducing an online registration system for the goods and service tax, reducing the time to register a new business from 23.5 days to 13.5 days.The process of obtaining a building permit was streamlined, reducing the time needed to complete all required procedures to build a warehouse from 78 days to 54 days.
- Getting electricity was made easier by eliminating the site visit for new commercial electricity connections, reducing by seven days the time that it takes for a business to obtain a permanent electricity connection and supply.
- An online single window platform to carry out property searches was implemented, making it easier to transfer property.
- In the area of Trading Across Borders, Malaysia introduced electronic forms and enhanced its risk-based inspection system. The country also made importing and exporting easier by improving infrastructure and the port operation system at Port Klang for the second consecutive year. As a result, the time to complete border compliance requirements has been reduced from 45 to 28 hours for exporting, and from 69 to 36 hours for importing.
- A reorganization procedure in insolvency proceedings was introduced making resolving insolvency easier.
"We commend the technical teams representing the many Government agencies, particularly those from the Ministry of Trade and Industry and the Malaysia Productivity Corporation, for their efforts in helping to drive these reforms forward. Moving from 24 to 15 in the global rankings of the World Bank’s Doing Business index is an important accomplishment and indicates that the Malaysian business environment is becoming much more competitive," said Firas Raad, World Bank Group Country Manager and Representative to Malaysia.
Malaysia is amongst the world’s top five performers in several areas measured by Doing Business. The country is second only to New Zealand in the area of Protecting Minority Investors. Malaysia’s excellence in this area is underpinned by its perfect score of 10 on the extent of disclosure index.
A reform in the past year to improve construction permitting helped advance Malaysia to a global rank of 3 in the area of Dealing with Construction Permits. The 54 days it now takes to obtain a construction permit in Malaysia compares with 158 days globally and 133 days on average in the East Asia and Pacific region.
In the area of Getting Electricity, Malaysia now ranks 4 globally. The cost for businesses to obtain a commercial electricity connection in Malaysia is only 26 percent of income per capita, compared to an average of 625 percent in East Asia and Pacific.
However, Malaysia continues to underperform in the area of Starting a Business, with a global ranking of 122. Despite the reform of the past year and other reforms in earlier years, it takes 9.5 procedures and 13.5 days to register a new business in Malaysia, compared to 2 procedures and 1.5 days in Singapore and 3.5 procedures and 5.5 days in Brunei Darussalam, the region’s best performers.