KUALA LUMPUR: Two business groups have urged Putrajaya to adopt the Johor state government's plan to blacklist business owners who 'rent' their licences to foreigners.
Malay Chamber of Commerce Malaysia (MCCM) president Norsyahrin Hamidon said foreigners who rented licenses from local business owners did not pay taxes.
"Foreigners can manage businesses but they must have valid permits and should only be in industries where locals have no interest.
"They can't become business owners because they don't pay taxes," he told the New Straits Times adding rent-seeking activities affected local business owners.
Johor Housing and Local Government Committee chairman Datuk Mohd Jafni Md Shukor previously said local business owners who abuse their licences by renting them out to foreigners will be blacklisted and have their licences cancelled.
The measure, he added was to curb illegal foreign business ownership.
Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry president Nivas Ragavan praised the Johor government's initiative.
He said enforcement efforts to curb rent-seeking should begin at the local level. He also said state and the federal authorities should also crack down on the practice.
Nivas said although the government plans to introduce a law against rent seeking, stringent enforcement was still needed.
"You don't see business owners being charged in court, or face action (for renting out their business licences)
"If the local authorities start charging people, prosecuting them, then you will see some changes," he said, adding foreigners have infiltrated most industries due to rent-seeking practices.
He said this included small-scale indusries like welding and construction.
Nivas claimed local business owners were unafraid of abusing their licenses as they could pay the fines if they were caught.
Malaysian Employers Federation (MEF) President Datuk Dr. Syed Hussain Syed Husman said the organisaion backed the government's plans to introduce a law to curb rent-seeking.
However, he said such a law must be clearly defined to prevent "Ali Baba" practices and not discourage foreigners from setting up businesses in Malaysia.
"MEF has no issue if foreigners obtain licences to conduct business legally.
While waiting for the proposed rent-seeking act to be introduced, Syed Hussain said Putrajaya and other state governments should enforce existing laws to address such practices.
"Strict action should be taken against locals renting out their business licenses and premises to foreigners, including cancelling their licenses and blacklisting them.
"The foreigners involved should be dealt with, and this includes repatriating and blacklisting them," he said.
The Malaysian ambassador for the World Spa Organisation, Datin Dorothea Justin said the decision to cancel and blacklist business licenses involved in rent-seeking will contribute to a better image for the local spa and wellness industry.
She said the industry's image was marred by illegitimate and illicit activities carried out in spas run by foreigners.
"It is ironic that genuine spas face challenges in obtaining visas for qualified spa therapists, while shady and questionable massage centres (operated by foreigners), can easily bring in large numbers of foreign therapists, many of whom possess little or no therapy skills.
Meanwhile, North South Initiative executive director Adrian Pereira said the government should introduce provisions to allow foreigners to run businesses instead of restricting them from doing so.
"It is a win-win formula as we live and work in a very competitive world. Malaysians should not cry foul over their inability to succeed as entrepreneurs.
"It (restricting foreigners from doing business) is very a anti-business and anti-competition behaviour which is unnecessary and sends a racist and xenophobic vibe," he said.
The head of the human rights group also criticised the decision to blacklist those renting their premises to foreigners, saying it smacks of classism.
"We should not isolate or segregate anyone for whatever reason in society.
"We live and operate together. Why should we deny the workers access to various services and facilities?
"There is an unreasonable and irrational fear being spread by fear mongers and this is not healthy," he added.