Will new Anti-Rent-Seeking Act curb licence misuse?

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The Proposed Anti-Rent-Seeking Act Aims to Address Licence Misuse, But Effectiveness Remains to Be Seen

The Malaysian government is reviewing measures to enact a new Anti-Rent-Seeking Act, which aims to tackle the issue of business licence misuse, including renting them to foreign workers. While the proposed legislation seeks to address the shortcomings of existing laws, its effectiveness in curbing such practices will depend on detailed enforcement strategies and penalties, which are still under study. The current regulations already stipulate that business licences can be cancelled if they are rented out to foreign workers, a practice that violates local authority (PBT) bylaws.
Existing Laws Deemed Insufficient for Rent-Seeking

Current legislation, including the Anti-Corruption Commission Act 2009, the Competition Act 2010, the Companies Act 2016, and various local by-laws, are considered inadequate to comprehensively combat rent-seeking activities. The Economy Ministry acknowledges that despite these existing regulations, widespread violations persist due to factors such as lenient punishments and a lack of robust enforcement. This inadequacy highlights the need for a more targeted and effective legal framework.
New Act Under Study to Strengthen Enforcement

The Economy Ministry is actively conducting a study to prepare the framework for the proposed Anti-Rent-Seeking Act. This study is crucial for identifying the specific nuances of rent-seeking behaviours and determining the necessary actions to bolster enforcement mechanisms. The goal is to create legislation that is both comprehensive and effective in preventing the misuse of business licences and other forms of rent-seeking.
Licence Misuse by Foreign Workers is a Known Violation

Under existing trade, business, and industrial licensing bylaws, foreigners are explicitly prohibited from applying for or holding licences for various businesses, including those for hawkers, small traders, general business premises, grocery stores, eateries, car workshops, and market stalls. The practice of renting out these licences to foreign workers is a direct violation of these stipulated conditions, and such licences are subject to cancellation by local authorities.

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Will new Anti-Rent-Seeking Act curb licence misuse?

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