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Malaysia ranks as the 9th least complex place to do business in Asia, and comes in 52nd out of 76 jurisdictions globally, the Global Business Complexity Index 2019 by TMF Group revealed.
Amongst the Asian places, the top 10 easiest to do business in are:
#2 South Korea
#4 Hong Kong
#10 The Philippines
Globally, these are the top 10 easiest places to do business in:
#1 Cayman Islands
#9 British Virgin Islands
According to the report, complexity was measured in terms of how complicated and unpredictable a business environment is, and how difficult it is to understand and operate in.
Why Thailand is ranked first in Asia: Despite frequent changes in government, the country’s leadership is consistently pro-business and keen to attract foreign investment. The National Competitive Enhancement Act waives the need for work permits for highly skilled overseas workers and investors. Once all documentation has been prepared, establishing a company can take less than a day. Moreover, hiring and maintaining a local workforce is a relatively straightforward process.
Why Indonesia is among the most complicated to do business in Asia: Indonesia ranks second place in complexity globally (and the most complex in Asia) because its legislation changes frequently and regulations can be at odds with each other. This is exemplified by the enforcement of VAT on online sales – a change announced in 2018 and scrapped in 2019. While Indonesia is gradually modernising, the existing legal infrastructure cannot always keep pace with the changes.
A survey conducted for the report also explored three key areas that affect the complexity score and ranking – hiring, firing and paying employees; rules, regulations and penalties; and accounting and tax.
We’ve highlighted data on hiring, firing and paying employees for HR:
The report found the setting up of processes to manage HR aspects globally to be “very or extremely complex in 42% of jurisdictions” as a result of complex local labour laws, specific reporting requirements and the difficulty of hiring staff before a business has been incorporated as a legal entity.
In fact, on a ranking of 1 to 10, with 10 being the most complex, a mean score of 7.5 out of 10 was shown across all jurisdictions for hiring before legal incorporation.
The other factors that were also considered included compliance with health and safety legislation, firing an under-performing employee, managing employee probation periods, and more, as reflected in the chart below:
Read the full report here.
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This article was first published in Human Resources Online Bulletin and is reproduced with permission. Original article can be found at http://www.humanresourcesonline.net