Doing Business 2018 Malaysia Economy Pro le of Malaysia Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Malaysia Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region East Asia & Pacific DB 2018 Rank 190 1 Malaysia Income Category Upper middle income 24 Population 31,187,265 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 9,850 0 100 78.43 City Covered Kuala Lumpur DB 2018 Distance to Frontier (DTF) 0 100 83.92: Korea, Rep. (Rank: 4) 83.44: Hong Kong SAR, China (Rank: 5) 78.43: Malaysia (Rank: 24) 75.68: Japan (Rank: 34) 65.29: China (Rank: 78) Page 3   62.70: Regional Average (East Asia & Pacific) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Malaysia Ease of Doing Business in Region East Asia & Pacific DB 2018 Rank 190 1 Malaysia Income Category Upper middle income 24 Population 31,187,265 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 9,850 0 100 78.43 City Covered Kuala Lumpur DB 2018 Distance to Frontier (DTF) 0 100 83.92: Korea, Rep. (Rank: 4) 83.44: Hong Kong SAR, China (Rank: 5) 78.43: Malaysia (Rank: 24) 75.68: Japan (Rank: 34) 65.29: China (Rank: 78) 62.70: Regional Average (East Asia & Pacific) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Malaysia 8 4 1 11 20 28 42 44 46 55 61 73 82 Rank 111 109 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Malaysia 100 94.33 83.78 82.19 82.75 80.00 80.00 80 76.06 76.07 66.61 62.51 60 DTF 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:-0.01 Change:-0.23 Change:+5.00 Investors Change:+2.68 Borders Change:0.00 Change:+0.02 Change:+0.11 Permits Change:+1.67 Change:+0.37 Change:+0.02 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:-0.01 Change:-0.23 Change:+5.00 Investors Change:+2.68 Borders Change:0.00 Change:+0.02 Change:+0.11 Permits Change:+1.67 Change:+0.37 Doing Business 2018 Malaysia Change:+0.02 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Malaysia Standardized Company Legal form Sendirian Berhad (Sdn. Bhd.) - Private Limited Company Paid-in minimum capital requirement MYR 0 City Covered Kuala Lumpur East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Procedure – Men (number) 8 7.0 4.9 1.00 (New Zealand) Time – Men (days) 18 22.7 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 5.4 18.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 9 7.0 4.9 1.00 (New Zealand) Time – Women (days) 19 22.8 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 5.4 18.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 15.1 8.7 0.00 (113 Economies) Figure – Starting a Business in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 98.14: Hong Kong SAR, China (Rank: 3) 95.83: Korea, Rep. (Rank: 9) 85.47: China (Rank: 93) 84.37: Japan (Rank: 106) 83.78: Malaysia (Rank: 111) 82.32: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Malaysia – Procedure, Time and Cost Time Cost 3 18 16 2.5 ost (% of income per capita) 14 2 12 Time (days) 10 1.5 8 1 6 Page 6   starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Malaysia Figure – Starting a Business in Malaysia – Procedure, Time and Cost Time Cost 3 18 16 2.5 Cost (% of income per capita) 14 2 12 Time (days) 10 1.5 8 6 1 4 0.5 2 0 0 1 2 *3 4 *5 6 *7 *8 *9 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Malaysia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs  1 APPLIES TO WOMEN ONLY: Obtain husband's permission to leave the 1 day no charge home Agency : Domicile According to Islamic Family Law, Art. 59(2)(b), the woman must obtain permission from her husband to leave her home. 2 Search and reserve company name at the (SSM) one-stop shop Less than one day MYR 50 for every 30 Agency : Companies Commission of Malaysia (online procedure) days Since May 16, 2013, it is mandatory to conduct company name search and reservation online via MyCoID portal http://ww1.ssm- mycoid.com.my/omni/omni/portal/mycoid The name reservation is valid for for every 30 days, up to a maximum of 180 days. 3 Company Secretary prepares the company incorporation documents between 1-3 days, MYR 1,000 Agency : Companies Commission of Malaysia simultaneous with previous procedure Under the new Companies Act of 2016, a superform on the MyCoID website needs to be lled up, which requires the following: - Name of the proposed company; - Whether the company is private or public; - Nature of business; - Registered address; - Details of shareholders; Page 7   - Details of directors; d (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Malaysia Details – Starting a Business in Malaysia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs  1 APPLIES TO WOMEN ONLY: Obtain husband's permission to leave the 1 day no charge home Agency : Domicile According to Islamic Family Law, Art. 59(2)(b), the woman must obtain permission from her husband to leave her home. 2 Search and reserve company name at the (SSM) one-stop shop Less than one day MYR 50 for every 30 Agency : Companies Commission of Malaysia (online procedure) days Since May 16, 2013, it is mandatory to conduct company name search and reservation online via MyCoID portal http://ww1.ssm- mycoid.com.my/omni/omni/portal/mycoid The name reservation is valid for for every 30 days, up to a maximum of 180 days. 3 Company Secretary prepares the company incorporation documents between 1-3 days, MYR 1,000 Agency : Companies Commission of Malaysia simultaneous with previous procedure Under the new Companies Act of 2016, a superform on the MyCoID website needs to be lled up, which requires the following: - Name of the proposed company; - Whether the company is private or public; - Nature of business; - Registered address; - Details of shareholders; - Details of directors; d - Details of company secretary (if any); - Details of shares and - Any other information the CCM requires. Due to the Companies Act of 2016, the following forms are no longer needed: (ii) Form 48A (Statutory Declaration by A Person before Appointment as Director, or by A Promoter before Incorporation of Corporation) (iii) Form 6 (Statutory Declaration of Compliance by the Company Secretary) (iv) Form 24 (Return of Allotment of Shares) (v) Form 49 (Return Giving Particulars in Register of Directors, Managers and Secretaries and Changes of Particulars) (vi) Form 44 (Notice of Situation of Registered O ce and of O ce Hours, and Particulars of Change) A company secretary is optional, however they are still used frequently in practice. Furthermore, the company must appoint a secretary within 30 days after the incorporation of the company. 4 File necessary documents with the Companies Commission of Malaysia 2 days MYR 1,000 (CCM) one-stop shop and obtain company incorporation as well as the (registration fee) + post-incorporation package (company seal, share certi cates and MYR 10 (online statutory books) processing fee) Agency : Companies Commission of Malaysia File necessary documents with the Companies Commission of Malaysia (SSM) one-stop shop and obtain company incorporation, Promoters must pay the Page 8   practice. Furthermore, the company must appoint a secretary within 30 days Doing after the incorporation Business of the company. 2018 Malaysia 4 File necessary documents with the Companies Commission of Malaysia 2 days MYR 1,000 (CCM) one-stop shop and obtain company incorporation as well as the (registration fee) + post-incorporation package (company seal, share certi cates and MYR 10 (online statutory books) processing fee) Agency : Companies Commission of Malaysia File necessary documents with the Companies Commission of Malaysia (SSM) one-stop shop and obtain company incorporation, Promoters must pay the registration fee and le the following incorporation documents with the Companies Commission. Application for incorporation under section 14 of the Act: (a) company limited by share - 1,000 (b) company limited by guarantee - 3,000 (c) unlimited company - 1,000 If the application is submitted online through Mycoid, there is a processing fee of RM10.00. 5 Open a Bank Account 1 day no charge Agency : Bank (simultaneous with previous A bank account is needed In order to register for GST procedure) 6 Register for Goods and Services Tax 14 days no charge Agency : Royal Malaysian Customs Goods and Services Tax ("GST") at the rate of 6% will be imposed in Malaysia with e ect from 1 April 2015 and it will replace the current sales tax and service tax regime. Under the Goods and Services Tax Act 2014 ("GST Act"), GST shall be charged on: (i) any supply of goods or services made in Malaysia where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him; and (ii) any importation of goods into Malaysia. GST is implemented and enforced by the Director General of Customs and Excise and the Royal Malaysian Customs and Excise Department (“Customs”), which implement and enforce indirect taxes. It is a broad-based consumption tax that will virtually apply to every supply of goods or services, unless they are zero-rated, exempted or out of scope. Further, under the GST regime, a taxable person is also required to, amongst other things: (i) when charging GST, issue a tax invoice showing, amongst others, the amount of GST and the price of the supplies separately; (ii) where the output tax exceeds the input tax, remit the di erence to Customs; (iii) submit GST returns to Customs at the prescribed time and comply with all other GST reporting requirements; and (iv) keep all business and accounting records relating to GST transactions in the National Language or English for a period of 7 year Page 9   previous A bank account is needed In order to register for GST Doing Business 2018 Malaysia procedure) 6 Register for Goods and Services Tax 14 days no charge Agency : Royal Malaysian Customs Goods and Services Tax ("GST") at the rate of 6% will be imposed in Malaysia with e ect from 1 April 2015 and it will replace the current sales tax and service tax regime. Under the Goods and Services Tax Act 2014 ("GST Act"), GST shall be charged on: (i) any supply of goods or services made in Malaysia where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him; and (ii) any importation of goods into Malaysia. GST is implemented and enforced by the Director General of Customs and Excise and the Royal Malaysian Customs and Excise Department (“Customs”), which implement and enforce indirect taxes. It is a broad-based consumption tax that will virtually apply to every supply of goods or services, unless they are zero-rated, exempted or out of scope. Further, under the GST regime, a taxable person is also required to, amongst other things: (i) when charging GST, issue a tax invoice showing, amongst others, the amount of GST and the price of the supplies separately; (ii) where the output tax exceeds the input tax, remit the di erence to Customs; (iii) submit GST returns to Customs at the prescribed time and comply with all other GST reporting requirements; and (iv) keep all business and accounting records relating to GST transactions in the National Language or English for a period of 7 year In order to register for GST the company needs to submit the following with the GST -01 form: - Business Registration Number; - A valid email address; - Total Taxable Supplies; - Industry codes; - Bank account information. 7 Register for income tax and PAYE 1 day no charge Agency : Inland Revenue Board of Malaysia (LHDN) (simultaneous with previous After completing the application for the certi cate of incorporation and procedure) obtaining the MyCOID number, an applicant can register for the income tax number and PAYE through the web-porta: e-daftar.hasil.gov.my or in person. Under the Companies Act 2016, the Certi cate of Incorporation and Form 49 have been changed to a Notice of Registration of Company and a Noti cation of changes in Register of Directors, Managers and Secretaries, respectively, which are required to complete the application process. 8 Register for the Employees Provident Fund 1 day no charge Page 10   - Industry codes; Bank account Doing -Business information. 2018 Malaysia 7 Register for income tax and PAYE 1 day no charge Agency : Inland Revenue Board of Malaysia (LHDN) (simultaneous with previous After completing the application for the certi cate of incorporation and procedure) obtaining the MyCOID number, an applicant can register for the income tax number and PAYE through the web-porta: e-daftar.hasil.gov.my or in person. Under the Companies Act 2016, the Certi cate of Incorporation and Form 49 have been changed to a Notice of Registration of Company and a Noti cation of changes in Register of Directors, Managers and Secretaries, respectively, which are required to complete the application process. 8 Register for the Employees Provident Fund 1 day no charge Agency : Employees Provident Fund (KWSP) (simultaneous with previous According to Section 41 (1) of the EPF Act 1991, an employer must register procedure) with the EPF within 7 days from the date the employer becomes liable to contribute, that is as soon as an employee is hired. In order to register with the Employee Provident Fund, an applicant must le the Employee's registration application form (KSWP 1 (MAJ)) with the EPF counter/kiosk and to obtain i-Akaun (i-Account) Activation Code using the Form KWSP 1 or KWSP 1(i). The form is required to be submitted together with the following supporting documents:- 1. Form KWSP1; 2. A certi ed copy of identity card/passport of director's /authorised person; 3. A Notice of Registration of Company and a Noti cation of changes in Register of Directors, Managers and Secretaries, and 4. A cheque or bank draft for rst month EPF contribution, if applicable. Upon the submission of the above documents, EPF will issue the Certi cate of registration of Employer and given the i-Akaun Activation Code to the authorised system administrator registered in the Form KWSP 1 or KWSP 1(i). The Company is required to activate the i-Akuan within within 30 days using the 6 digits Activation Code. Thereafter, employer can submit the monthly EPF contribution form through i-Akaun and register a new employee. Employer's Registration Certi cate is to be exhibited at the employer's premise 9 Register for Social Security 1 day no charge Agency : Social Security Organisation (SOCSO- Perkeso) (simultaneous with previous Registered employers through MyCoID are required to submit their procedure) registration forms together with supporting documents to SOCSO - Employers are required to attach the supporting registration documents in accordance with the business entity type. -Employers registering employees earning more than RM3,000 per month and not contributing before but opting to contribute must ll in Option Notice and signed by both employers and employees under mutual concensus. -Employers must ensure that details such as identi cation card number is included in Form 2 (Employee Registration Form) and correct against the employee’s identi cation card. Failure of which will cause the employee being unable to register and contribute, as there will not be any record once checking is done against National Registration Department database Page 11   i-Akaun and register a new employee. Employer's Registration Certi cate is Doing to be exhibited Business employer's premise at theMalaysia 2018 9 Register for Social Security 1 day no charge Agency : Social Security Organisation (SOCSO- Perkeso) (simultaneous with previous Registered employers through MyCoID are required to submit their procedure) registration forms together with supporting documents to SOCSO - Employers are required to attach the supporting registration documents in accordance with the business entity type. -Employers registering employees earning more than RM3,000 per month and not contributing before but opting to contribute must ll in Option Notice and signed by both employers and employees under mutual concensus. -Employers must ensure that details such as identi cation card number is included in Form 2 (Employee Registration Form) and correct against the employee’s identi cation card. Failure of which will cause the employee being unable to register and contribute, as there will not be any record once checking is done against National Registration Department database Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% Page 12   owned Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Malaysia Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 13   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Malaysia Standardized Warehouse Estimated value of warehouse MYR 1,914,966.70 City Covered Kuala Lumpur East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Procedures (number) 14 15.2 12.5 7.00 (Denmark) Time (days) 78 138.2 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 1.4 2.2 1.6 0.10 (5 Economies) Building quality control index (0-15) 13.0 8.9 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 84.86: Hong Kong SAR, China (Rank: 5) 82.19: Malaysia (Rank: 11) 77.74: Korea, Rep. (Rank: 28) 73.36: Japan (Rank: 50) 69.60: Regional Average (East Asia & Pacific) 47.28: China (Rank: 172) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Malaysia – Procedure, Time and Cost Time Cost 1.2 70 1 Cost (% of warehouse value) 60 0.8 50 Time (days) 40 0.6 30 0.4 20 0.2 10 0 0 1 2 3 4 5 *6 *7 8 *9 10 11 12 13 14 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 14   component indicators. Doing Business 2018 Malaysia Figure – Dealing with Construction Permits in Malaysia – Procedure, Time and Cost Time Cost 1.2 70 1 Cost (% of warehouse value) 60 0.8 50 Time (days) 40 0.6 30 0.4 20 0.2 10 0 0 1 2 3 4 5 *6 *7 8 *9 10 11 12 13 14 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Malaysia and comparator economies – Measure of Quality 14 13.0 12.0 12 11.0 9.6 10 8.9 Index score 8.0 8 6 4 2 0 Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Details – Dealing with Construction Permits in Malaysia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain technical conditions from the Water Authority SYABAS 2 days no charge Agency : Water Authority SYABAS BuildCo will visit the Water Authority SYABAS to obtain the technical conditions for the design of the water design plans, so that they are in compliance with regulations. 2 Submit and obtain development approval through OSC 30 days MYR 3,600 Agency : Kuala Lumpur City Hall’s One Stop Centre (OSC) Builders can now apply for construction permits through OSC 1Submission (single entry). OSC will then refer the submissions to the Planning Department, Building Department, Engineering Department, Fire and Rescue Page 15   Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Doing Business 2018 Malaysia Details – Dealing with Construction Permits in Malaysia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain technical conditions from the Water Authority SYABAS 2 days no charge Agency : Water Authority SYABAS BuildCo will visit the Water Authority SYABAS to obtain the technical conditions for the design of the water design plans, so that they are in compliance with regulations. 2 Submit and obtain development approval through OSC 30 days MYR 3,600 Agency : Kuala Lumpur City Hall’s One Stop Centre (OSC) Builders can now apply for construction permits through OSC 1Submission (single entry). OSC will then refer the submissions to the Planning Department, Building Department, Engineering Department, Fire and Rescue Department, Sewerage Agency and Water Agency. OSC will issue the development approval (planning approvals, building approvals, engineering approvals, re safety plan endorsements, water approvals, and sewerage works approvals) to the builder. While all forms can be obtained online at jprb.dbkl.gov.my/Pentadbir/MuatTurunBorangOSC/MTBorang11.asp, the ling must still be done in person at the OSC. BuildCo will submit and obtain approval through OSC for the following documents: • Planning plan • Building plan • Engineering plan (earthwork, road & drainage plan, road excavation permit, and street lighting plan) • Landscape plan • Water supply plan • Sewerage plan • Infrastructure communication plan • Fire safety plan The estimated processing fees are as follows: 1. Planning plan = MYR 480 2. Building plan = MYR 1,300 3. Engineering plan = MYR 100 4. Water supply plan = MYR 1,300 5. Sewerage planning and design approval = MYR 420 (MYR 150 for sewerage planning approval; MYR 150 for sewerage design approval and MYR 120 for noti cation to start work) 3 Submit pre-construction noti cations to OSC 1 day no charge Agency : Kuala Lumpur City Hall’s One Stop Centre (OSC) Under the OSC 1Submissions, all noti cations are submitted via OSC. OSC will distribute the noti cations to relevant agencies:- 1. Building Department at Kuala Lumpur City Hall 2. Engineering Department at Kuala Lumpur City Hall 3. Water Authority SYABAS 4. Department of Occupational, Safety and Health - submit JKJ 103 Form (Noti cation in respect of building operation and works of engineering) under s.67 Occupational, Safety and Health Act 1994 Page 16   5. Sewerage Certifying Agency (IWK) planning approval; MYR 150 for sewerage design approval and MYR 120 for Doing noti cation to Business start work) 2018 Malaysia 3 Submit pre-construction noti cations to OSC 1 day no charge Agency : Kuala Lumpur City Hall’s One Stop Centre (OSC) Under the OSC 1Submissions, all noti cations are submitted via OSC. OSC will distribute the noti cations to relevant agencies:- 1. Building Department at Kuala Lumpur City Hall 2. Engineering Department at Kuala Lumpur City Hall 3. Water Authority SYABAS 4. Department of Occupational, Safety and Health - submit JKJ 103 Form (Noti cation in respect of building operation and works of engineering) under s.67 Occupational, Safety and Health Act 1994 5. Sewerage Certifying Agency (IWK) 4 Request nal utilities inspections through OSC 1 day MYR 2,163 Agency : Kuala Lumpur City Hall’s One Stop Centre (OSC) Under OSC 1Submission, the builder has to request for joint inspection via OSC. OSC will arrange and coordinate inspections and connections schedule with relevant agencies: 1. Water inspection = MYR 1250 2. Sewerage inspection = MYR 600 (Cost for the nal inspection - Fee schedule 2 Part II of the Water Services Industry Act of 2006) 3. Fire safety inspection = MYR 312.5 5 Receive road and drainage inspection 1 day no charge Agency : Engineering Department of DBKL Once the road and drainage works have been completed, BuildCo will request the road and drainage clearance letter from the Engineering Department of DBKL. BuildCo must also submit a construction report noti cation. By signing form G-17, the engineer certi es that all works were carried out according to regulations. Form G-17 is then led along with Form F (Certi cate of Completion and Compliance) via OSC to the Engineering Department. 6 Submit a compliance report to the Sewerage Certifying Agency (IWK) and 1 day no charge obtain a sewerage clearance letter Agency : Sewerage Certifying Agency (IWK) The Principal Submitting Person will issue a compliance report under the self-regulation concept and the Sewerage Certifying Agency (IWK) will issue BuildCo a clearance letter for sewerage. 7 Receive water nal inspection and clearance letter 1 day no charge Agency : Water Authority SYABAS The Water Authority (SYABAS) will conduct an on-site inspection of the works and make the connection to the public pipe. 8 Obtain road and drainage clearance letter 12 days no charge Agency : Engineering Department of DBKL A date for the inspection will be set prior to the issuance of clearance letter for the road and drainage work. The clearance letter will be issued by the Engineering Department independently to OSC after the inspection. The Engineering Department's client charter states that certi cation papers will be issued within 14 days of application. 9 Obtain sewerage connection 12 days MYR 19,150 Page 17   Agency : Sewerage Certifying Agency (IWK) Engineering Department's client charter states that certi cation papers will Doing be issued within Business 2018 14 days of application. Malaysia 9 Obtain sewerage connection 12 days MYR 19,150 Agency : Sewerage Certifying Agency (IWK) Once the inspection has been carried out, a clearance letter is issued to the Builder. The sewage clearance letter is needed in order for the engineer to issue the Certi cate of Completion and Compliance (CCC). 10 Submit water test and commissioning (T&C) report and obtain a water 11 days no charge clearance letter Agency : Water Authority SYABAS BuildCo will prepare the water testing and commissioning report and submit it to SYABAS. This document is required to obtain the clearance letter from SYABAS. 11 Receive re safety inspection 1 day no charge Agency : Fire and Rescue Department Fire and Rescue Department will carry out re safety inspection 12 Obtain re safety clearance letter 12 days no charge Agency : Fire and Rescue Department Fire and Rescue Department will issue the re clearance letter to the builder. 13 Builder’s principal submitting person les the certi cate of completion 1 day no charge and compliance (CCC) Agency : Building Department and Board of Architect via OSC BuildCo's Principal Submitting Person (the professional architect or engineer responsible for the project) will issue the Certi cate of Completion and Compliance (Form F) enabling the warehouse to be occupied. Two copies of Form F and Forms G1-G21 must be submitted to the Building Control Department at Kuala Lumpur City Hall and the Board of Architects / Board of Engineers via OSC. 14 Obtain water connection 3 days MYR 1,600 Agency : Water Authority SYABAS The Water Authority (SYABAS) will issue a clearance letter to BuildCo. SYABAS will subsequently install the water meter after the issuance of the Certi cate of Completion and Compliance by the Principal Submitting Person (PSP). This will complete the water connection processs. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Malaysia – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Page 18   Takes place simultaneously with previous procedure. Doing Business 2018 Malaysia Details – Dealing with Construction Permits in Malaysia – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, in-house 2.0 accordance with the approved plans and regulations? (0-2) engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Page 19   Construction Doing Business 2018 Malaysia company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) is 929 meters (14,000 square feet). The plot of land on which it is builtPage 20   Is at least 1 calendar day square meters (10,000 square feet). architect or engineer. Doing Business 2018 Malaysia Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 21   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Malaysia Standardized Connection Price of electricity (US cents per kWh) 12.9 Name of utility Tenaga Nasional Berhad City Covered Kuala Lumpur East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Procedures (number) 4 4.5 4.7 2 (United Arab Emirates) Time (days) 31 71.6 79.1 10 (United Arab Emirates) Cost (% of income per capita) 28 712.0 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 8 3.7 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 99.89: Korea, Rep. (Rank: 2) 99.02: Hong Kong SAR, China (Rank: 4) 94.33: Malaysia (Rank: 8) 89.88: Japan (Rank: 17) 72.23: Regional Average (East Asia & Pacific) 68.83: China (Rank: 98) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Malaysia – Procedure, Time and Cost Time Cost 30 30 25 25 Cost (% of income per capita) 20 20 Time (days) 15 15 10 10 5 5 Page 22   getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Malaysia Figure – Getting Electricity in Malaysia – Procedure, Time and Cost Time Cost 30 30 25 25 Cost (% of income per capita) 20 20 Time (days) 15 15 10 10 5 5 0 0 1 2 3 4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Malaysia and comparator economies – Measure of Quality 9 8 8 8 8 8 7 6 6 Index score 5 4 3.7 3 2 1 0 Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Details – Getting Electricity in Malaysia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to TNB through electrical engineer and await site 7 calendar days MYR 0 visit Agency : Tenaga Nasional Berhad Submission shall be complete with all relevant documents and load data. Supply application form available at TNB o ces or via online. Documents to be attached are: site/location plan, electrical drawings, layout plan and identity card of the owner. Documents to be attached include development plan approved by the local authority, load pro le & load details and preliminary metering scheme. Utility engineer will estimate and prepare connection charges. Page 23   2 Receive site visit from TNB and await estimate 7 calendar days MYR 0 Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Doing Business 2018 Malaysia Details – Getting Electricity in Malaysia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to TNB through electrical engineer and await site 7 calendar days MYR 0 visit Agency : Tenaga Nasional Berhad Submission shall be complete with all relevant documents and load data. Supply application form available at TNB o ces or via online. Documents to be attached are: site/location plan, electrical drawings, layout plan and identity card of the owner. Documents to be attached include development plan approved by the local authority, load pro le & load details and preliminary metering scheme. Utility engineer will estimate and prepare connection charges. 2 Receive site visit from TNB and await estimate 7 calendar days MYR 0 Agency : Tenaga Nasional Berhad Once the utility engineer has visited the site, he submits the le for internal clearances, and then prepares the connection charge (estimate). 3 Receive and pay estimate, pay security deposit and obtain external 14 calendar days MYR 10,730.49 connection Agency : Tenaga Nasional Berhad Customer receives estimate and makes payment at the utility. Once payment is received, utility commences external connection works, after getting internal approvals and permits from local authorities. Security deposit is 2 months electricity usage, reimbursed at the time the account is terminated. 4 Receive meter installation and turn-on of electricity from TNB 3 calendar days MYR 0 Agency : Tenaga Nasional Berhad Customer receives security deposit notice from TNB and makes payment of security deposit. Customers submits Form G and H completed, electrical engineer's certi cate of compliance of internal wiring (will need to provide this compliance certi cate after all internal wiring is complete). TNB installs meter and turns on electricity. Takes place simultaneously with previous procedure. Details – Getting Electricity in Malaysia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.5 System average interruption frequency index (SAIFI) 0.6 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0 Mechanisms for monitoring outages (0-1) 1 Page 24   Does the distribution utility use automated tools to monitor outages? Yes Takes place simultaneously with previous procedure. Doing Business 2018 Malaysia Details – Getting Electricity in Malaysia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.5 System average interruption frequency index (SAIFI) 0.6 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.tnb.com. my/commercial- industrial/pricing- tari s1/ Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 25   If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Malaysia Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value MYR 1,914,966.70 City Covered Kuala Lumpur Page 26   East Asia & OECD high Doing Business 2018 Malaysia Standard Property Transfer Property value MYR 1,914,966.70 City Covered Kuala Lumpur East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Procedures (number) 8 5.5 4.6 1.00 (4 Economies) Time (days) 13 74.5 22.3 1.00 (3 Economies) Cost (% of property value) 3.5 4.3 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 27.5 15.8 22.7 29.00 (Singapore) Figure – Registering Property in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.34: Korea, Rep. (Rank: 39) 76.15: China (Rank: 41) 76.06: Malaysia (Rank: 42) 73.92: Japan (Rank: 52) 73.54: Hong Kong SAR, China (Rank: 55) 57.21: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Malaysia – Procedure, Time and Cost Time Cost 3 12 2.5 10 Cost (% of property value) 2 8 Time (days) 1.5 6 1 4 2 0.5 0 0 1 *2 *3 4 5 6 7 8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 27   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Malaysia Figure – Registering Property in Malaysia – Procedure, Time and Cost Time Cost 3 12 2.5 10 Cost (% of property value) 2 8 Time (days) 1.5 6 1 4 2 0.5 0 0 1 *2 *3 4 5 6 7 8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Malaysia and comparator economies – Measure of Quality 30 27.5 27.5 27.5 24.5 25 20 18.3 Index score 15.8 15 10 5 0 Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Details – Registering Property in Malaysia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Lawyer conducts a land title search 1 day RM 30 Agency : Land o ce/O cial assignee's o ce The parties will mutually agree on whose solicitors will prepare the sale- purchase agreement. The lawyer will usually conduct: • Land search The lawyer will carry out a search on the document of title to the property at the land registry/land o ce to ascertain, amongst others, who is the Page 28   registered proprietor of the property, the category of land use of the Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Doing Business 2018 Malaysia Details – Registering Property in Malaysia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Lawyer conducts a land title search 1 day RM 30 Agency : Land o ce/O cial assignee's o ce The parties will mutually agree on whose solicitors will prepare the sale- purchase agreement. The lawyer will usually conduct: • Land search The lawyer will carry out a search on the document of title to the property at the land registry/land o ce to ascertain, amongst others, who is the registered proprietor of the property, the category of land use of the property, the conditions to which the property is subject, whether the property is subject to any restrictions, and also whether the property is subject to any encumbrances (charges, caveats). 2 Lawyer conducts a company search Less than a day RM 12 Agency : Suruhanjaya Syarikat Malaysia (Online procedure) (Companies Commission of Malaysia) The lawyer will conduct a company search and will check all the information registered on the company and charges registered. It can be completed online. 3 Lawyer conducts a winding-up search Less than a day RM 12 Agency : Insolvency Department (online procedure) The lawyer will conduct a winding-up/bankruptcy search on the seller with a private company, MYEG in place of Insolvency Department. The bankruptcy and winding up search is not required by the Land o ce or by the law in a property transfer process but it is done as a prudent measure to protect purchaser. 4 Buyer and seller sign sales-purchase agreement in presence of lawyer 1 day Effective from and lawyer lls out Form 14A Memorandum of Transfer 15.3.2017, Lawyers' Agency : Lawyer's o ce professional fee (not including GST and The Memorandum of Transfer (Form 14A) has to be attested by a licensed disbursements) for professional - can be a lawyer or an o cial from the land o ce. This is stated preparing sale and in the National Land Code. purchase agreement Documentation shall include: and completing the transfer of property • Memorandum of Transfer (Form 14A) as follows:- For the 1st RM500,000.00 of • Copy of the sale-purchase agreement purchase price: 1% (subject minimum of • Copy of title deed RM500.00), the next RM500,000.00: 0.8%, • Form PDS15 (Stamping Proforma) the next RM2,000,000.00: Page 29   by the law in a property transfer process but it is done as a prudent measure Doing to protect purchaser. Business 2018 Malaysia 4 Buyer and seller sign sales-purchase agreement in presence of lawyer 1 day Effective from and lawyer lls out Form 14A Memorandum of Transfer 15.3.2017, Lawyers' Agency : Lawyer's o ce professional fee (not including GST and The Memorandum of Transfer (Form 14A) has to be attested by a licensed disbursements) for professional - can be a lawyer or an o cial from the land o ce. This is stated preparing sale and in the National Land Code. purchase agreement Documentation shall include: and completing the transfer of property • Memorandum of Transfer (Form 14A) as follows:- For the 1st RM500,000.00 of • Copy of the sale-purchase agreement purchase price: 1% (subject minimum of • Copy of title deed RM500.00), the next RM500,000.00: 0.8%, • Form PDS15 (Stamping Proforma) the next RM2,000,000.00: 0.7%, the subsequent next RM2,000,000.00: 0.6%, the subsequent next RM2,500,000.00: 0.5%, where consideration is excess RM7,500,000.00: negotiable on the excess (but shall not exceed 0.5% of such excess). 5 Memorandum of Transfer (14A) sent to Stamp O ce for adjudication of 1 - 8 days (online) no cost Stamp Duty and valuation by JPPH or up to 20 days Agency : Stamp O ce assessment and payment system manually (http://pinharta.hasil.gov.my) The valuation department will conduct an inspection to value the property, if required. The inspection is not mandatory to conclude the valuation and it is at the discretion of the valuation department, but in practice, it takes place in the majority of the cases. The Stamp O ce will issue a notice of assessment based on the valuation department’s report. Submission can be made either manually or online through the website http://pinharta.hasil.gov.my. E-stamping (online) is now available only to legal rms, banks, company secretaries, accounting rms and companies. If completed online the submission must include: 1. The sale-purchase agreement 2. Copy of the Issue Document of Title (IDT) 3. Form 14A 4. Form PDS 15 5. Other supporting documents Once accepted, an adjudication number will be assigned by the system. When the Stamp O ce receives the submission, the documents are transferred to JPPH for valuation. When required, a valuation inspection will be made on the property by JPPH. In most of the cases, commercial Page 30   exceed 0.5% of such Doing Business 2018 Malaysia excess). 5 Memorandum of Transfer (14A) sent to Stamp O ce for adjudication of 1 - 8 days (online) no cost Stamp Duty and valuation by JPPH or up to 20 days Agency : Stamp O ce assessment and payment system manually (http://pinharta.hasil.gov.my) The valuation department will conduct an inspection to value the property, if required. The inspection is not mandatory to conclude the valuation and it is at the discretion of the valuation department, but in practice, it takes place in the majority of the cases. The Stamp O ce will issue a notice of assessment based on the valuation department’s report. Submission can be made either manually or online through the website http://pinharta.hasil.gov.my. E-stamping (online) is now available only to legal rms, banks, company secretaries, accounting rms and companies. If completed online the submission must include: 1. The sale-purchase agreement 2. Copy of the Issue Document of Title (IDT) 3. Form 14A 4. Form PDS 15 5. Other supporting documents Once accepted, an adjudication number will be assigned by the system. When the Stamp O ce receives the submission, the documents are transferred to JPPH for valuation. When required, a valuation inspection will be made on the property by JPPH. In most of the cases, commercial properties will be assessed. The JPPH will prepare a valuation report which is sent to the Stamp O ce. The applicant will be able to follow the status of the adjudication online. 6 Payment of stamp duty and stamping of Form 14A 1 day 1% on first RM Agency : Inland Revenue Board of Malaysia (IRBM) 100,000, 2% on excess of RM 100,000 Stamp duty must then be paid to the Stamp O ce, based on the Notice of up to RM 500,000 Assessment, within fourteen (14) days from the date of such notice or the and 3% on excess period indicated by the Collector of Stamp Duty. Usually the Collector will over RM 500,000 give thirty (30) days from the date of such notice to pay the stamp duty. This (Stamp duty) Procedure may take one day if the purchaser or purchaser’s lawyer goes personally. Otherwise it can take up to 5-7 days for the Memorandum of Transfer to be endorsed and be ready for collection. Payment may also be made electronically via Financial Processing Exchange (FPX), or at the Stamp O ce. The documentation shall include: - Form 14A (Memorandum of Transfer) - Notice of Assessment Form PDS 3 7 The transfer is registered at the Land O ce/Registry 3 to 4 days RM 100 (registration Agency : Land O ce/Registry fee) + RM 30 (search fee) The purchaser’s lawyer presents the duly stamped Memorandum of Transfer (Form 14A) for registration at the Land O ce/Registry. This must be done within three months from the date of the Memorandum of Transfer (Form 14A) which is usually dated when it is submitted for adjudication. A title search is conducted just prior to presentation to ensure that there are no encumbrances or restraint against dealings which may hinder the registration of the Memorandum of Transfer (Form 14A). The documentation shall include: • Copies of Quit rent and Assessment receipts • Certi ed true Page 31   copies of the Memorandum and Articles of Association, Form 24 (Return on Notice of Assessment Doing -Business Form PDS 3 2018 Malaysia 7 The transfer is registered at the Land O ce/Registry 3 to 4 days RM 100 (registration Agency : Land O ce/Registry fee) + RM 30 (search fee) The purchaser’s lawyer presents the duly stamped Memorandum of Transfer (Form 14A) for registration at the Land O ce/Registry. This must be done within three months from the date of the Memorandum of Transfer (Form 14A) which is usually dated when it is submitted for adjudication. A title search is conducted just prior to presentation to ensure that there are no encumbrances or restraint against dealings which may hinder the registration of the Memorandum of Transfer (Form 14A). The documentation shall include: • Copies of Quit rent and Assessment receipts • Certi ed true copies of the Memorandum and Articles of Association, Form 24 (Return on Allotment of Shares), Form 49 (Return Giving Particulars in Register of Directors, Managers and Secretaries and Changes of Particulars) of the Purchaser and Vendor • Certi ed true copies of the Vendor’s and Purchaser’s board resolutions giving authority to sell and purchase the property respectively • Search report on the Purchaser as extracted from the Companies Commission of Malaysia • Duly stamped Memorandum of Transfer (Form 14A) • Copy of Notice of Assessment bearing Stamp O ce’s endorsement that ad valorem stamp duty has been paid (obtained in Procedure 3) • Original of the title document After submission, the applicants get the “presentation receipt” the same day. It gives the time of submission and that is the time of legal “registration”. The computerized system at the Land Registry also immediately tags the land as ‘pending transfer’ and hence anyone conducting a land search on theproperty will be aware of encumbrances (if any). However, the “presentation receipt” is su cient for Banks to release the loan. 8 Update the name of the buyer at the Municipality 1 day No charge Agency : Kuala Lumpur City Hall In law, both the seller and buyer will have to update the name of the property owner at the Kuala Lumpur City Hall. (a) Pursuant to Section 160(1) of the Local Government Act, 1976, (“LGA”) it is the duty of a vendor and purchaser within three (3) months after the sale or transfer of a rateable holding to give notice of such sale or transfer thereof to the local authority in Form I of the First Schedule to the LGA; and (b) Pursuant to Section 160(6) of the LGA, every person failing to give any notice shall on conviction be liable to a ne not exceeding RM2,000.00 or to a term of imprisonment not exceeding six (6) months or to both such ne and imprisonment. Takes place simultaneously with previous procedure. Details – Registering Property in Malaysia – Measure of Quality Answer Score Quality of the land administration index (0-30) 27.5 Reliability of infrastructure index (0-8) 7.0 What is the institution in charge of immovable property registration? Land O ce under Jabatan Ketua Pengarah Page 32   Takes place simultaneously with previous procedure. Doing Business 2018 Malaysia Details – Registering Property in Malaysia – Measure of Quality Answer Score Quality of the land administration index (0-30) 27.5 Reliability of infrastructure index (0-8) 7.0 What is the institution in charge of immovable property registration? Land O ce under Jabatan Ketua Pengarah Tanah dan Galian (Department of Director General of Land and Mines) In what format are the majority of title or deed records kept in the largest business city Computer/Fully 2.0 —in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Department of Survey and Mapping Malaysia (JUPEM) under Jabatan Ketua Pengarah Tanah dan Galian (Department of Director General of Lands and Mines) In what format are the majority of maps of land plots kept in the largest business city— Computer/Fully 2.0 in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 5.5 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Page 33   Link for online access: http://www.ptgw immovable property registration in the largest business city? pays the o cial Doing Business 2018 Malaysia fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://www.ptgw p.gov.my/english .php/pages/view/ 219 Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: http://www.ptgw p.gov.my/english .php/pages/view/ 219 Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: http://www.ptgw p.gov.my/english .php/pages/view/ 7 Is there a speci c and separate mechanism for ling complaints about a problem that Yes 1.0 occurred at the agency in charge of immovable property registration? Contact information: http://www.jkptg. gov.my/en/conte nt/complaint Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, online 0.5 —and if so, how? Link for online access: http://www.jupe m.gov.my/wp/my /produk- perkhidmatan/je nis- perkhidmatan- kadar/ Does the cadastral or mapping agency commit to delivering an updated map within a Yes, online 0.5 speci c time frame—and if so, how does it communicate the service standard? Link for online access: https://www.jupe m.gov.my/index. php? Page 34   action=piagam- Does the cadastral or mapping agency commit to delivering an updated map within a Yes, online 0.5 c time frame—and speciBusiness Doing if so, how does it communicate the service standard? 2018 Malaysia Link for online access: https://www.jupe m.gov.my/index. php? action=piagam- pelanggan Is there a speci c and separate mechanism for ling complaints about a problem that Yes 0.5 occurred at the cadastral or mapping agency? Contact information: http://www.jupe m.gov.my/wp/my /hubungi- kami/maklumbal as-aduan/ Geographic coverage index (0–8) 8.0 Are all privately held land plots in the economy formally registered at the immovable Yes 2.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? Yes 2.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 7.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Lawyer. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Lawyer. Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a High Court of property worth 50 times gross national income (GNI) per capita and located in the Malaysia largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Less than a year 3.0 such a case (without appeal)? Are there any statistics on the number of land disputes in the rst instance? No 0.0 Page 35   property worth 50 times gross national income (GNI) per capita and located in the Malaysia largest Doing city, what business 2018 Business court would be in charge of the case in the rst instance? Malaysia How long does it take on average to obtain a decision from the rst-instance court for Less than a year 3.0 such a case (without appeal)? Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). Page 36   In case B, ABC grants BizBank a business charge, enterprise charge, floating Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Malaysia Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Strength of legal rights index (0-12) 8 7.2 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 4.2 6.6 8.00 (34 Economies) Page 37   Credit registry coverage (% of adults) 63.6 16.0 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Malaysia East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Strength of legal rights index (0-12) 8 7.2 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 4.2 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 63.6 16.0 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 82.6 22.3 63.7 100.00 (23 Economies) Figure – Getting Credit in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.00: Malaysia (Rank: 20) 75.00: Hong Kong SAR, China (Rank: 29) 65.00: Korea, Rep. (Rank: 55) 60.00: China (Rank: 68) 57.00: Regional Average (East Asia & Pacific) 55.00: Japan (Rank: 77) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Malaysia and comparator economies 9 8 8 8 7.2 7 6 Index score 5 5 5 4 4 3 2 1 0 Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Details – Legal Rights in Malaysia Strength of legal rights index (0-12) 8 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Page 38   Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Doing Business 2018 Malaysia Details – Legal Rights in Malaysia Strength of legal rights index (0-12) 8 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically No and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be Yes performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Malaysia and comparator economies 10 8 8 8 8 7 Index score 6 6 4.2 4 2 0 Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Details – Credit Information in Malaysia Page 39   0 Malaysia Doing Business 2018 China Malaysia Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Details – Credit Information in Malaysia Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative credit data distributed? Yes Yes 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes Yes 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes Yes 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 8 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 16,000,000 12,065,343 Number of firms 1,000,000 1,027,121 Total 17,000,000 13,092,464 Percentage of adult population 82.6 63.6 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 40   transactions; Available legal remedies (damages, Percentage of adult population 82.6 63.6 Doing Business 2018 Malaysia Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Extent of conflict of interest regulation index (0- 8.7 5.7 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 7.3 4.8 6.4 Page 41   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Malaysia East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Extent of conflict of interest regulation index (0- 8.7 5.7 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 7.3 4.8 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.00: Malaysia (Rank: 4) 76.67: Hong Kong SAR, China (Rank: 9) 71.67: Korea, Rep. (Rank: 20) 58.33: Japan (Rank: 62) 52.33: Regional Average (East Asia & Pacific) 48.33: China (Rank: 119) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Malaysia and comparator economies – Measure of Quality Malaysia 8 9 10 6 8 7 China 9 1 10 2 3 4 Hong Kong SAR, China 8 8 10 4 7 9 Japan 5 6 7 3 6 8 Korea, Rep. 9 6 7 6 7 8 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 East Asia & Pacific 5.6 4.6 6.2 3.9 5.3 6.1 0 10 20 30 40 50 60 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Malaysia – Measure of Quality Answer Score Page 42   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Malaysia Details – Protecting Minority Investors in Malaysia – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 8.7 Extent of disclosure index (0-10) 10 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 2.0 2) the transaction and on the con ict of interest Extent of director liability index (0-10) 9 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if unfair or 2.0 caused to Buyer? (0-2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused Liable if unfair or 2.0 to Buyer (0-2) prejudicial Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by Yes 1.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 7 Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 Page 43   shareholder Ease ofBusiness Doing suits index 2018 (0-10) Malaysia 7 Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 7.3 Extent of shareholder rights index (0-10) 8 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new Yes 1.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 6 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 Page 44   of Buyer? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board Doing members? Business 2018 Malaysia Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 8 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? No 0.0 Assuming that Buyer is a limited company, can members representing 5% put items on Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Page 45   Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Malaysia Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Payments (number per year) 8 21.8 10.9 3 (Hong Kong SAR, China) Page 46   return, but within the tax assessment period. Doing Business 2018 Malaysia East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Payments (number per year) 8 21.8 10.9 3 (Hong Kong SAR, China) Time (hours per year) 188 189.2 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 39.2 33.6 40.1 18.47% (32 Economies) Postfiling index (0-100) 52.65 56.55 83.45 99.38 (Estonia) Figure – Paying Taxes in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 98.82: Hong Kong SAR, China (Rank: 3) 86.69: Korea, Rep. (Rank: 24) 76.71: Japan (Rank: 68) 76.07: Malaysia (Rank: 73) 72.42: Regional Average (East Asia & Pacific) 62.90: China (Rank: 130) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Malaysia and comparator economies – Measure of Quality 120 98.85 100 93.04 80 71.69 Index score 52.65 56.55 60 49.08 40 20 0 Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Details – Paying Taxes in Malaysia Total tax and Tax or mandatory Payments Notes on Time contribution rate (% Notes contribution (number) Payments (hours) Statutory tax rate Tax base of profit) on TTR Page 47   Corporate income tax 1 online 26 24% taxable 20.31 Doing Business 2018 Malaysia Figure – Paying Taxes in Malaysia and comparator economies – Measure of Quality 120 98.85 100 93.04 80 71.69 Index score 52.65 56.55 60 49.08 40 20 0 Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Details – Paying Taxes in Malaysia Total tax and Tax or mandatory Payments Notes on Time contribution rate (% Notes contribution (number) Payments (hours) Statutory tax rate Tax base of profit) on TTR Corporate income tax 1 online 26 24% taxable 20.31 profit Employer paid - 1 online variable gross 14.56 Provident fund salaries contributions Employer paid - Social 1 online 50 variable gross 1.85 security contributions salaries Real estate capital 1 5% - 30% capital gain 1.52 gains Property tax 1 10% annual 0.49 property value Vehicle tax 1 RM 8,545 fixed fee 0.47 Stamp duty 1 depending of the transaction 0.00 value of value transaction GST 1 online 112 6% value 0.00 added Employee-paid - Social 0 jointly variable gross 0.00 withheld security contributions salaries Totals 8 188 39.2 Details – Paying Taxes in Malaysia – Tax by Type Taxes by type Answer Profit tax (% of profit) 21.8 Page 48   Totals 8 188 39.2 Doing Business 2018 Malaysia Details – Paying Taxes in Malaysia – Tax by Type Taxes by type Answer Profit tax (% of profit) 21.8 Labor tax and contributions (% of profit) 16.4 Other taxes (% of profit) 1.0 Details – Paying Taxes in Malaysia – Measure of Quality Answer Score Post ling index (0-100) 52.65 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process New VAT/GST system established in 2015 Percentage of cases exposed to a VAT audit (%) 50% - 74% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 22.0 56 Time to obtain a VAT refund (weeks) 17.5 72.49 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 50% - 74% Time to comply with a corporate income tax audit (hours) 11.3 82.11 Time to complete a corporate income tax audit (weeks) 33.5 0 Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border Page 49   compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Malaysia Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the Traffic delays and road police checks while shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 50   of agriculture or industry, national security agencies and any other Doing Business 2018 Malaysia government authorities. East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Time to export: Border compliance (hours) 45 55.9 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 321 387.5 149.9 0.00 (19 Economies) Time to export: Documentary compliance 10 68.2 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 45 112.1 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 69 70.5 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 321 431.0 111.6 0.00 (27 Economies) Time to import: Documentary compliance 10 65.6 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 60 111.4 25.6 0.00 (30 Economies) Figure – Trading across Borders in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.56: Hong Kong SAR, China (Rank: 31) 92.52: Korea, Rep. (Rank: 33) 86.51: Japan (Rank: 51) 82.75: Malaysia (Rank: 61) 69.97: Regional Average (East Asia & Pacific) 69.91: China (Rank: 97) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Malaysia – Time and Cost Time Cost 80 321 321 350 69 70 300 60 250 Time (hours) Cost (USD) 50 45 200 40 150 30 100 20 60 10 45 10 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 51   Doing Business 2018 Malaysia Figure – Trading across Borders in Malaysia – Time and Cost Time Cost 80 321 321 350 69 70 300 60 250 Time (hours) Cost (USD) 50 45 200 40 150 30 100 20 60 10 45 10 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Malaysia Characteristics Export Import Product HS 85 : Electrical machinery and equipment and parts thereof; sound recorders and HS 8708: Parts and reproducers, television image and sound recorders and reproducers, and parts and accessories of motor accessories of such articles vehicles Trade partner China Thailand Border Klang port Klang port Distance (km) 53 53 Domestic 12 12 transport time (hours) Domestic 255 255 transport cost (USD) Details – Trading across Borders in Malaysia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 10.8 109.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 45.0 212.2 Import: Clearance and inspections required by customs authorities 14.4 109.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 69.0 212.2 Page 52   Details – Trading across Borders in Malaysia – Trade Documents (USD) Doing Business 2018 Malaysia Details – Trading across Borders in Malaysia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 10.8 109.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 45.0 212.2 Import: Clearance and inspections required by customs authorities 14.4 109.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 69.0 212.2 Details – Trading across Borders in Malaysia – Trade Documents Export Import Customs Export Declaration Customs Import Declaration Commercial Invoice Commercial Invoice Bill of Lading Packing List Packing List Bill of Lading Certificate of Origin Certificate of Origin SOLAS certificate SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) Page 53   - The seller sues the buyer before the court with jurisdiction over SOLAS certificate SOLAS certificate Doing Business 2018 Malaysia Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value MYR 74,144.00 Court name Kuala Lumpur First Class Magistrates Court City Covered Kuala Lumpur East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Time (days) 425 565.7 577.8 164.00 (Singapore) Cost (% of claim value) 37.3 47.3 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 12.0 7.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 84.15: Korea, Rep. (Rank: 1) 78.23: China (Rank: 5) 69.13: Hong Kong SAR, China (Rank: 28) Page 54   of judicial processes Quality Business Doing index (0-18) 2018 Malaysia 12.0 7.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 84.15: Korea, Rep. (Rank: 1) 78.23: China (Rank: 5) 69.13: Hong Kong SAR, China (Rank: 28) 66.61: Malaysia (Rank: 44) 65.26: Japan (Rank: 51) 53.09: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Malaysia – Time and Cost Time Cost 700 47.3 50 565.7 577.8 600 Cost (% of claim value) 37.3 40 496.3 500 425 Time (days) 385 30 400 360 23.6 23.4 290 21.5 300 16.2 20 12.7 200 10 100 0 0 China East Asia & Hong Kong SAR, China Japan Korea, Rep. Malaysia OECD high income Pacific Figure – Enforcing Contracts in Malaysia and comparator economies – Measure of Quality Malaysia 2.5 3 2.5 4 China 3 4.5 3 4.5 Hong Kong SAR, China 2.5 2 1 4.5 Japan 2.5 1 1 3 Korea, Rep. 3 4 4 3.5 OECD high income 2.5 2.9 2 3.6 East Asia & Pacific 2.2 2 1.3 3 0 2 4 6 8 10 12 14 Page 55   16 China East Asia & Hong Kong SAR, China Japan Korea, Rep. Malaysia OECD high income Pacific Doing Business 2018 Malaysia Figure – Enforcing Contracts in Malaysia and comparator economies – Measure of Quality Malaysia 2.5 3 2.5 4 China 3 4.5 3 4.5 Hong Kong SAR, China 2.5 2 1 4.5 Japan 2.5 1 1 3 Korea, Rep. 3 4 4 3.5 OECD high income 2.5 2.9 2 3.6 East Asia & Pacific 2.2 2 1.3 3 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Malaysia Indicator Time (days) 425 Filing and service 35 Trial and judgment 270 Enforcement of judgment 120 Cost (% of claim value) 37.3 Attorney fees 30 Court fees 1.1 Enforcement fees 6.2 Quality of judicial processes index (0-18) 12.0 Court structure and proceedings (-1-5) 4.0 Case management (0-6) 3.0 Court automation (0-4) 2.5 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Malaysia – Measure of Quality Page 56   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 Malaysia Details – Enforcing Contracts in Malaysia – Measure of Quality Answer Score Quality of judicial processes index (0-18) 12.0 Court structure and proceedings (-1-5) 4.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? No 0.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 3.0 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? No 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by lawyers? Court automation (0-4) 2.5 1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 57   1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 Businesscourt? the competent Doing 2018 Malaysia 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 0.5 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 58   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Malaysia Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Recovery rate (cents on the dollar) 81.3 35.4 71.2 93.1 (Norway) Time (years) 1.0 2.6 1.7 0.4 (Ireland) Page 59   Cost (% of estate) 10.0 20.6 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Malaysia East Asia & OECD high Indicator Malaysia Pacific income Overall Best Performer Recovery rate (cents on the dollar) 81.3 35.4 71.2 93.1 (Norway) Time (years) 1.0 2.6 1.7 0.4 (Ireland) Cost (% of estate) 10.0 20.6 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 1 .. .. .. concern) Strength of insolvency framework index (0-16) 6.0 7.0 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Malaysia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.44: Japan (Rank: 1) 89.33: Korea, Rep. (Rank: 5) 65.69: Hong Kong SAR, China (Rank: 43) 62.51: Malaysia (Rank: 46) 55.82: China (Rank: 56) 40.78: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Malaysia – Time and Cost Time Cost 3 25 22.0 2.6 20.6 2.5 20 Cost (% of estate) Time (years) 2 1.7 1.7 15 1.5 1.5 10.0 1.0 9.1 10 1 0.8 5.0 0.6 4.2 3.5 5 0.5 0 0 China East Asia & Hong Kong SAR, China Japan Korea, Rep. Malaysia OECD high income Pacific Figure – Resolving Insolvency in Malaysia and comparator economies – Measure of Quality Malaysia 2 2 2 0 Page 60   China 5 3 1 2.5 China East Asia & Hong Kong SAR, China Japan Korea, Rep. Malaysia OECD high income Pacific Doing Business 2018 Malaysia Figure – Resolving Insolvency in Malaysia and comparator economies – Measure of Quality Malaysia 2 2 2 0 China 5 3 1 2.5 Hong Kong SAR, China 3 2 1 0 Japan 6 3 2 3 Korea, Rep. 5.5 2.5 3 3 OECD high income 5.4 2.8 2.3 1.9 East Asia & Pacific 3.7 2.3 1.2 1 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Malaysia and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 100 92.4 87.2 84.7 90 81.3 80 70 60 50 40 36.9 35.4 30 20 10 0 Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Details – Resolving Insolvency in Malaysia Indicator Answer Explanation Proceeding receivership BizBank can initiate receivership proceeding by applying to the Court to appoint an identified receiver to enforce its security interest as the debenture holder. Bizbank in the meantime does not have to fund the operation while the Receivers and Managers could go out to look for interested buyers with the objective of disposing the hotel as a going concern hence 100% recovery to Bizbank. It will result in a higher recovery for BizBank through sale of the business as a going concern Outcome going concern Selling the hotel as a going concern will fetch better value than selling its assets piecemeal. Therefore the appointed Receiver and Manager has no reason not to sell the hotel as a going concern. Time (in years) 1.0 The in-court receivership procedure until BizBank is repaid some or all of the money owed will take approximate 1 year. Page 61   Malaysia China Hong Kong SAR, China Japan Korea, Rep. East Asia & Pacific Doing Business 2018 Malaysia Details – Resolving Insolvency in Malaysia Indicator Answer Explanation Proceeding receivership BizBank can initiate receivership proceeding by applying to the Court to appoint an identified receiver to enforce its security interest as the debenture holder. Bizbank in the meantime does not have to fund the operation while the Receivers and Managers could go out to look for interested buyers with the objective of disposing the hotel as a going concern hence 100% recovery to Bizbank. It will result in a higher recovery for BizBank through sale of the business as a going concern Outcome going concern Selling the hotel as a going concern will fetch better value than selling its assets piecemeal. Therefore the appointed Receiver and Manager has no reason not to sell the hotel as a going concern. Time (in years) 1.0 The in-court receivership procedure until BizBank is repaid some or all of the money owed will take approximate 1 year. Cost (% of 10.0 The costs associated with the case would amount to approximately 10% of the value of the estate) debtor's estate. Main components of the cost include Receiver and Manager fees and small portion for attorneys' fees. Recovery rate (cents on the 81.3 dollar) Details – Resolving Insolvency in Malaysia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 6.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 2.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Page 62   Does the insolvency framework allow avoidance of undervalued transactions? No 0.0 dollar) Doing Business 2018 Malaysia Details – Resolving Insolvency in Malaysia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 6.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 2.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? No 0.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Page 63   Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment Doing Businessof the 2018insolvency representative? Malaysia Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity Page 64   leave; (iv) whether employees on maternity leave the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Malaysia Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Malaysia Answer Hiring Page 65   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Malaysia Details – Labor Market Regulation in Malaysia Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 257.2 Ratio of minimum wage to value added per worker 0.2 Maximum length of probationary period (months) n.a. Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 8.0 Paid annual leave for a worker with 5 years of tenure (working days) 16.0 Paid annual leave for a worker with 10 years of tenure (working days) 16.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 13.3 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Page 66   Third-party Doing approval Business 2018 if nine workers are dismissed? Malaysia No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 8.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 8.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 6.7 Severance pay for redundancy dismissal for a worker with 1 year of tenure 1.7 Severance pay for redundancy dismissal for a worker with 5 years of tenure 16.7 Severance pay for redundancy dismissal for a worker with 10 years of tenure 33.3 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 17.2 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 60.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? n.a. Business Reforms in Malaysia In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Malaysia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Getting Credit: Malaysia strengthened access to credit by adopting a new law that establishes a modern collateral registry. Protecting Minority Investors: Malaysia strengthened minority investor protections by requiring greater corporate transparency. Trading across Borders: Malaysia made importing and exporting easier by improving the infrastructure, equipment and facilities at Port Klang. Page 67   DB2017 Minimum contribution period for unemployment protection (months)? n.a. Doing Business 2018 Malaysia Business Reforms in Malaysia In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Malaysia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Getting Credit: Malaysia strengthened access to credit by adopting a new law that establishes a modern collateral registry. Protecting Minority Investors: Malaysia strengthened minority investor protections by requiring greater corporate transparency. Trading across Borders: Malaysia made importing and exporting easier by improving the infrastructure, equipment and facilities at Port Klang. DB2017 Starting a Business: Malaysia made starting a business more di cult by requiring that companies with an annual revenue of more than MYR 500,000 register as a GST payer. Getting Credit: In Malaysia the credit bureau began to provide consumer credit scores. Paying Taxes: Malaysia made paying taxes easier by introducing an online system for ling and paying the Goods and Services Tax (GST) while also making it is more complex by replacing sales tax with GST. DB2016 Paying Taxes: Malaysia made paying taxes easier and less costly for companies by making electronic ling mandatory and reducing the property tax rate. At the same time, it also increased the capital gains tax. DB2014 Starting a Business: Malaysia made starting a business less costly by reducing the company registration fees. Dealing with Construction Permits: Malaysia made dealing with construction permits easier by establishing a one-stop shop. Getting Electricity: Malaysia made getting electricity easier by increasing the e ciency of internal processes at the utility and improving its communication and dialogue with contractors. Labor Market Regulation: Malaysia introduced a minimum wage. DB2013 Dealing with Construction Permits: Malaysia made dealing with construction permits faster by improving the one-stop center for new buildings and by reducing the time to connect to telephone service. Registering Property: Malaysia substantially reduced the number of days it takes to register property transfers. DB2012 Starting a Business: Malaysia made starting a business easier by merging company, tax, social security and employment fund registrations at the one-stop shop and providing same-day registration. Paying Taxes: Malaysia made paying taxes costlier for rms by reintroducing the real estate capital gains tax—but also made tax compliance easier by improving electronic systems and the availability of software. Enforcing Contracts: Malaysia continued to improve the computerization of its courts by introducing a system making it possible to le complaints electronically. Resolving Insolvency: Malaysia established dedicated commercial courts to handle foreclosure proceedings. DB2011 Page 68   Resolving Insolvency: Malaysia established dedicated commercial courts to handle foreclosure proceedings. Doing Business 2018 Malaysia DB2011 Starting a Business: Malaysia eased business start-up by introducing more online services. Registering Property: Malaysia’s introduction of online stamping reduced the time and cost to transfer property. Labor Market Regulation: Malaysia eliminated the requirements to notify third parties in cases of redundancy dismissals. DB2010 Starting a Business: Malaysia made starting a business easier through a new one-stop shop service that helped in streamlining the registration process. Enforcing Contracts: Malaysia made enforcing contracts easier by increasing court sta , more strictly enforcing deadlines for processing documents and reorganizing the commercial court to allow swifter disposition of interlocutory matters. DB2009 Starting a Business: Malaysia reduced the time needed to start a business by introducing electronic lodgment for business registration processes. Paying Taxes: Malaysia made paying taxes less costly for companies by reducing the corporate income tax rate. DB2008 Starting a Business: Malaysia reduced the time required to start a business by increasing e ciency at the Companies Commission of Malaysia. Paying Taxes: Malaysia made paying taxes easier for companies by encouraging electronic ling and payment. Page 69   Commission of Malaysia. Paying Doing 2018 made Taxes: Malaysia Business paying taxes easier for companies by encouraging electronic ling and payment. Malaysia Page 70