Rankings on Ease of Doing Business in Southeast Asia

Ease of Doing Business in SE AsiaSoutheast Asia is a hot market for business. There is untapped potential, both in terms of consumer demand and labour markets. With all eyes on Asia, it is important to focus your capital and team where you generate the greatest return on your investment. Which means getting into the details of every country’s laws: ease of setting up a business, access to credit, construction permits, registering property, taxation laws. This can be daunting, not to mention time consuming. Which is why we have come up with a few metrics that will give you a head-start on some high level knowledge on a few chosen countries in SEA.

The countries we have chosen are: Singapore, the Philippines, Malaysia, Indonesia, Thailand and Vietnam.

The metrics we have chosen are from the ease of doing business rankings published by the World Bank Group. They are: overall ease of doing business, starting a business, dealing with construction permits, getting electricity, registering property, getting credit, paying taxes, enforcing contracts, USD equivalent of a worker in retail/restaurants. For a thorough understanding on how the World Bank Group creates these rankings, you can read the explanation here.The data for rankings and number of procedures has been taken from World Bank Group’s Doing Business publication.

Ease of doing business
Singapore 1
Malaysia 18
Thailand 26
Vietnam 78
The Philippines 95
Indonesia 114

Singapore ranks first on the ease of doing business. This is not surprising. Since its independence, Singapore has positioned itself as a leader in doing business in SEA. By reducing bureaucratic procedures and taking the entire process online, Singapore has lived up to its top position for many years now.

Starting a Business
Singapore 6
Malaysia 13
Thailand 75
Vietnam 125
Indonesia 155
The Philippines 161

This metric is considered by measuring the number of days it takes to start a business. According to the World Bank Group, it takes 3 days to start a business in Singapore while in the Philippines, it takes 34, which gives you a good idea as to why the rankings look like the above. In the Philippines, much of the time is wasted moving from one department to another. It takes 16 independent procedures to start a business.

Dealing with Construction Permits
Singapore 2
Thailand 6
Vietnam 22
Malaysia 28
The Philippines 124
Indonesia 153

Indonesia ranks the lowest. It takes 17 procedures to obtain a construction permit in Indonesia while Singapore requires you to complete 10 procedures.

Getting Electricity
Singapore 11
Thailand 12
The Philippines 16
Malaysia 27
Indonesia 78
Vietnam 135

Vietnam has an average of 10 procedures taking 34 days while Singapore has 4 taking 31 days.

Registering Property
Singapore 24
Thailand 28
Vietnam 33
Malaysia 75
The Philippines 108
Indonesia 117

On average, Indonesia has 5 procedures, taking 25 days, while Singapore has 4 procedures, taking 4.5 days.

Getting Credit
Singapore 17
Thailand 89
Vietnam 36
Malaysia 23
The Philippines 104
Indonesia 71
Paying Taxes
Singapore 5
Malaysia 32
Thailand 62
The Philippines 127
Indonesia 160
Vietnam 173

This statistic is by far the most extreme. The total number of tax payments in Singapore is 5 per year which takes about 82 hours in the year whereas Vietnam has 32 payments per year which takes about 872 hours.

To understand more about taxation laws on some countries in the APAC region, you can read about it here for Singapore and for the Philippines.

Enforcing Contracts
Singapore 1
Thailand 25
Malaysia 29
Vietnam 47
The Philippines 124
Indonesia 172

In Singapore there are 21 procedures for enforcing contracts which takes about 150 days whereas Indonesia has 40 procedures, taking about 451 days.

Corruption Perception Index
Singapore 84
Malaysia 52
Thailand 38
The Philippines 38
Indonesia 34
Vietnam 31

The corruption perception index is a measure of how people within the country view the public sector. The index is relative to every other country on the list. It ranges from 0 (weakest perception) to 100 (cleanest perception).

Considering the countries we have chosen, it is pretty obvious why Singapore stands out. It is one of the most mature markets in SEA. The other countries are still in a developing stage. Singapore stands more as a reference point on these lists. Many of the SEA nations are held back by the large number of bureaucratic procedures and rampant corruption.

In addition to these factors, we should also consider the cost of doing business, in terms of labour, land and capital costs. There is a trade-off between cost and efficiency which we have avoided considering in order to bring out the basic metric of ease of doing business in SEA.

Hope this was helpful and relevant for your business! Watch out for more posts on rankings in SEA.

If you are in need of a payroll solution for your business, check out our Southeast Asia offerings here – PayrollHero.Asia

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