Small and Medium Sized Enterprises (SMEs) are a vital part of the Malaysian economy, comprising nearly 40% of Gross Domestic Product (GDP). Not only that, but many among the B40 (Bottom 40%) income groups are employed in SMEs. Government regulation can have a significant impact on these SMEs and to comply with government regulation constitutes a major burden in terms of increased cost to operate businesses for the SMEs in Malaysia. If the burden of regulation can be reduced, this will therefore translate into a boost of income for the B40.

In this paper IDEAS detailed out the results of a survey involving SMEs in Klang Valley, conducted to understand the burden of compliance with government regulation. The objective of this report is to identify how compliance with regulation contributes to the cost of doing business, as well as to inform further discussion about how to reduce these compliance costs.