By NUR HAZIQAH A MALEK / Pic By TMR
Almost a third (29%) of Malaysian small businesses are not participating in relevant international trade activities as they fall behind the global average in participation, according to a research by the Association of Chartered Certified Accountants (ACCA).
ACCA Malaysia country head Edward Ling (picture) said among the obstacles that lower small businesses’ participation in international trade are foreign regulation, competition and foreign exchange.
“With a relatively small domestic market, Malaysia has to adopt an open trade and investment regime to promote economic growth,” he said in a statement yesterday.
Based on the report, 43% of Malaysian respondents supported a reduction in domestic regulation and licensing requirements as a way to enable more small businesses to participate in international trade.
Ling added that Malaysia has made good strides in boosting its cross-border e-commerce activities, with the launch of its Digital Free Trade Zone last year.
“This data perhaps suggests that future government initiatives should look at reducing domestic red tape for small businesses,” he said.
Ling said as a leading member of the Asean Economic Community, small-and medium-sized enterprises (SMEs) in Malaysia are hopeful of Asean governments eliminating trade barriers to enable freer trade among the countries.
“It is therefore positive to see that Malaysian SMEs appear to have good access to government support for when they do seek international expansion: More than half (51%) access government advice or support to do so — a much higher proportion than the global average of 39%,” he said.
Some recommendations the report has stated for small businesses are to embrace cloud technologies, develop the finance function scalability, create a business strategy with global objectives and identify where external advice can support internationalisation.
Ling also said accountants in the small- to medium-sized practices (SMPs) are one of the most useful resources for supporting small businesses.
Meanwhile, Baker Tilly Malaysia partner and ACCA Malaysia’s SMPs Focus Group chairperson Datuk Lock Peng Kuan said accountants or SMPs play an important role in giving confidence for SMEs to grow internationally.
“They do this by ensuring the compliance with foreign regulatory frameworks to fulfilment of international tax obligations. We leverage on our international network to help SMEs in handling transfer pricing issues and cross-border tax duties,” he said.
The “Growing Globally” report by ACCA studied SMEs and accounting practices around the world to identify participation levels and desire for international trade.
The association founded in 1904 is the global body for professional accountants, which is currently introducing major innovations to its flagship qualification.