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Doing Business Project

Explore the Doing Business project by the World Bank/IFC, covering 10 key topics in 175 economies, from starting a business to closing one. Learn about reforms, cross-country comparisons, and policy prescriptions for improving business environments. Dive into the methodology of time and motion studies, examining processes like registering property and protecting investors. Discover the challenges and improvements in various regions, and track the ease of doing business across countries. Stay informed about legal requirements, disclosure extents, and investor protections, shaping the business landscape globally.

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Doing Business Project

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  1. Doing Business Project Measuring Business RegulationMelissa Johns and Justin YapFinancial and Private Sector Development Vice PresidencyWorld Bank/IFC December 15, 2006

  2. Doing Business report Ten topics 175 economies • Starting a business • Dealing with licenses • Employing workers • Registering property • Enforcing contracts • Getting credit • Trading across borders • Protecting investors • Paying taxes • Closing a business • Rich, poor & middle-income • US and Burkina Faso and Mexico • Updated each year • How to reform • Cross-country comparisons • Policy prescriptions www.doingbusiness.org

  3. Methodology: a time and motion study • Follow the entrepreneur from the beginning to the end of a basic transaction • Record every step of the process, and the associated time and cost • Gather all the relevant laws, regulations, decrees, fee schedules

  4. Starting a business: The company • Is a limited liability company • Operates in the country’s most populous city • Is 100% domestically owned and has 5 owners, none of whom is a legal entity. • Has up to 50 employees 1 month after the commencement of operations, all of them nationals • Has a company deed 10 pages long • Performs general industrial or commercial activities

  5. Starting a business in Gambia in January 2006 1. Check the uniqueness of the company name 2. Notarize the company statutes 3. Payment of stamp duty and deposit of corporate tax with commissioner 4. Register with commercial registry 5. Obtain operational licenses 6. Register with Labor department 7. Register employees for Social security 8. Make a company seal Cost (right axis) Time (number of days) Cost (% of GNI per capita) Time (left Axis) Procedures

  6. Mr. James Mr. James owns 90% of Seller Co. shares Mr. James owns 60% of Buyer Co. shares, sits on its board of directors Seller Co. Buyer Co. Buyer Co. buys trucks from Seller Co. Protecting investors against self-dealing • Legal issues: • Clear conflict of interest, but possible business purpose • Legal requirements met, but not exceeded • NOT fraud

  7. Methodology - Protecting investors Extent of disclosure • who approves the transaction • what needs to be disclosed, when and to whom Extent of director liability • available claims against Mr. James and the other directors • what needs to be proven for each claim • how much they have to pay if they are found liable Ease of shareholder suits • access to company information for proving the investor’s case and standard of proof applied Strength of investor protection:average of the three indices

  8. Sub Saharan Africa is more difficult to do business in than any other region Average ease of Doing Business in 2007

  9. Starting a business—a comparison Number of days

  10. Is the business environment getting better? Yes 43 213 reforms made business easier in 2005/06; 25 made it more difficult Antigua & Barbuda Armenia Azerbaijan Belarus Belgium Benin Bulgaria Burkina Faso China Croatia Czech Republic Egypt El Salvador Ethiopia Georgia Guatemala Honduras India Indonesia Ireland Japan Lao PDR Lesotho Lithuania FYR Macedonia Madagascar Mexico Micronesia Morocco Mozambique Netherlands Niger Peru Portugal Russia Rwanda Saudi Arabia Switzerland Syria Tanzania Uganda Ukraine Uruguay 31 Albania Algeria Antigua & Barbuda Belarus Bosnia & Herzegovina Bulgaria Czech Republic Egypt Estonia Ghana Guinea-Bissau Hungary India Israel Latvia Lesotho Lithuania Mexico Moldova Montenegro Morocco Pakistan Paraguay Russia Rwanda Senegal Sierra Leone Sudan Switzerland Turkey Yemen 26 24 Easier to do business Algeria Armenia Azerbaijan Bulgaria China Czech Republic Denmark Dominican Rep. El Salvador FranceGeorgia Honduras India Israel Japan Kazakhstan Kyrgyz Republic Lao PDR Mauritius Nicaragua Panama Peru Romania Serbia Thailand Uruguay Armenia Australia Bosnia & Herzegovina Botswana CAR Côte d’Ivoire Croatia El Salvador Ghana Greece Guatemala Kuwait Kyrgyz Republic Mali Mauritania Mauritius Morocco Nicaragua Nigeria Seychelles South Africa Spain Swaziland Tanzania 19 18 17 Cambodia China Colombia France Georgia Ghana Hong Kong, China India Jamaica Jordan Kenya Nicaragua Nigeria Pakistan Romania Serbia Syria Tanzania Togo 15 Australia Brazil Burundi Chad Croatia Denmark Dominican Rep. Estonia France Gambia Georgia Guyana Italy FYR Macedonia Nigeria Peru Rwanda Slovakia Armenia Cambodia Canada France Georgia Germany Guatemala Kenya Korea Latvia Mali Moldova Niger Romania Spain Ukraine Vietnam China Colombia Germany Hong Kong, China India Israel Mexico New Zealand Peru Poland Romania Sweden Tanzania Tunisia United Kingdom 12 Burundi Chile France Italy Korea Latvia Micronesia Puerto Rico Romania Serbia Slovakia United States 8 Argentina Australia Georgia Greece Lithuania FYR Macedonia Romania Vietnam Palau Swaziland Eritrea New Zealand Timor-Leste Bolivia Djibouti Maldives Norway Serbia Zimbabwe FYR Macedonia Togo Uganda Venezuela Belarus Hungary Venezuela CAR Dominican Rep. Sri Lanka Uzbekistan Venezuela Peru Uzbekistan More difficult to do business

  11. What gets measured, gets done 55 reforms informed or inspired by Doing Business

  12. 10 days of requests for reform advice on Doing Business • Between November 13 and 22, 8 governments asked for and were given suggestions on improving their investment climate • Azerbaijan (on licensing and entry, Ministry of Economy) • Georgia (on bankruptcy and credit information, Ministry of Reforms) • Guatemala (on licensing and trade, Competitiveness Commission) • Korea (on court management, Ministry of Justice) • Mexico (on property registration, Mexico City government) • The Netherlands (on administrative burdens, Ministry of Finance) • Nigeria (on entry, property, licensing, Ministry of Finance) • Rwanda (on what to reform, Senate Committee) None of these requests related to World Bank loan conditionality

  13. Georgia: big improvements in construction licensing 2005 2006

  14. Serbia: top reformer in trade

  15. Reform payoff: creating jobs Unemployment (%) Lower Higher Countries ranked by ease of doing business, quintiles Note: Relationship is statistically significant at the 1% level and remains significant when controlling for income per capita

  16. Doing Business continues to improve • Using business infrastructure • Not paying bribes • Security of business property • from theft, vandalism

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