Regulatory reforms should focus on building up market competition, which indirectly forces state-owned enterprises to improve their operation toward efficiency.
 
We study the experience of regulatory reform of state-owned enterprises (SOEs) in Thailand and Malaysia. We explore the trend of regulatory reforms relating to the creation of privatization, liberalization, and competition. We focus on the development of the regulatory reforms of SOEs in major sectors (airlines, energy, and telecommunication) in Thailand and Malaysia. We argue that, while having active plans for regulatory reforms, the implementation of these reforms may not successfully fulfill the aims in terms of the efficiency of SOEs. The regulatory reforms face challenges regarding the political economy, regulatory barriers for sectoral restructure, and regulatory intervention approaches in both countries. We conclude by proposing possible developments of the regulatory frameworks for the reform of SOEs.