Under-invest in compliance at your peril - even in 'safer' Asian states

WHEN trying to determine how to allocate compliance resources across Asian markets, the more developed and mature markets such as Malaysia, South Korea, Japan and Thailand are often given only residual attention because they are deemed fairly easy places to operate in. But these seemingly "safer" Asian jurisdictions are, in fact, much more capricious and trickier than they appear on paper.

In Malaysia, one can hardly be faulted for thinking that doing business there ought to get easier in the coming years. The sight of a tearful former prime minister, Najib Razak, being hauled to court in late August to begin a massive corruption trial, coupled with promises of institutional metamorphosis by the ruling Pakatan Harapan coalition that swept to power last May, would seem to confirm that.

But think again. Malaysia's relatively mature economy and strong performance on multiple international indices belie a complex operating environment. Malaysia is consistently the country in Asia that catches out our clients the most on the compliance front, often because the unspoken assumption is that Malaysia is somewhat like Singapore - when the reality is that the Philippines and Indonesia are closer to the mark.