Business Without Borders

Identifying business-friendly regulatory reforms in economies across the world

Over $1 trillion in U.S. goods and services were sold overseas in 2009, and with President Obama’s National Export Initiative (NEI) looking to double that number within five years, the U.S. government promises greater resources for entrepreneurs looking to generate sales overseas.

Entrepreneurs, workers and farmers are the main driver of exporting to foreign markets.  However, lack of readily available information about exporting and market research along, challenges in obtaining export financing, and strong competition from foreign governments and companies place hurdles on expanding into international markets.

Important regulatory reform trends in regions and economies making the largest improvements for local entrepreneurs are identified in the 2013 10th Edition of Doing Business, published by the World BankThis report identifies smarter regulations for small and medium-size businesses in 185 economies while ranking them in 10 areas of business regulation.

The 10 economies who received the highest marks for most business-friendly regulation include Singapore, Hong Kong SAR, China, New Zealand, the United States, Denmark, Norway, the United Kingdom, the Republic of Korea, Georgia and Australia.  Main findings revealed the following:

  • Poland improved the most in the ease of doing business making it easier to register property, pay taxes, enforce contracts and resolve insolvency.
  • Eastern Europe and Central Asia had the largest share of its economies – 88 percent – implement regulatory reform.
  • Out of European economies in fiscal distress working to improve the business climate, Greece is one of the ten most improved globally in 2011-2012
  • Global reform trends reveal an ease of starting a new business, increasing the efficiency of tax administration and facilitating trade across international borders.

In this article, we take a closer look at the Ease of Doing Business in the first five out of the ten regulatory reforms.

Starting a Business

During the period 2005-2013, globally the average time to start a business has fallen from 50 to 30 days and many economies have removed the paid-in minimum capital requirement.  Starting a business is easiest in New Zealand whereas Madagascar is among the economies advancing the furthest toward regulatory practice in starting a business.  Among regions, Eastern Europe and Central Asia have improved the business start-up process the most since 2005.

Dealing with construction permits

In 2011-2012, 16 out of the 20 reforms making it easier to deal with construction permits were countries in East Asia and the Pacific, Latin America and the Caribbean, OECD high-income economies and Sub-Saharan Africa.  The remaining three were adopted by Eastern Europe and Central Asia followed by 1 for South Asia.  The Middle East and North Africa did not implement any major regulatory improvements in this area during this period.  In East Asia, Taiwan, China made the biggest improvement in the past year.  Since 2005, economies in Eastern Europe and Central Asia have achieved the biggest time savings in the reduction of time to deal with construction permits by 88 days on average.

Getting electricity

During the year 2011-2012, Doing Business recorded 13 reforms that made getting electricity easier and most effective in reducing connection delays and the duplication of formalities.  Canada, Indonesia, Armenia and Georgia were among those who improved process efficiency within the utility, streamlining approvals with other public agencies, and making information on fees and costs more readily available.  In the UAE, the Dubai Electricity and Water Authority introduced a “one window, one step’ application for getting electricity as the latest enhancement to its SAP system.  Within the past three years, out of 30 global economies who implemented 31 reforms, Sub Saharan Africa accounts for the largest number of such reforms followed by Eastern Europe and Central Asia.

Registering property

In 2011-12, 17 economies made it easier to register property by reducing the procedures, time or cost required.  Georgia ranked first as easiest for formally transferring and registering property, whereas Belgium ranked as most difficult.  Within the past year, Malaysia made the biggest improvements followed by Czech Republic, Denmark, Ireland, Israel and Italy.  In the past eight years, among the 185 reforms, undertaken in 121 economies, Sub-Saharan Africa led in number of property registration forms whereas property transfers have become faster in all regions.

Getting credit

In 2011-12, of the five economies that improved access to credit, three are in Eastern Europe and Central Asia (including Romania, Kazakhstan and Georgia) and the remaining are Cambodia and Mauritius.  Among the sixteen economies who improved their credit reporting system in the past seven of them (including Costa Rica, Ethiopia, Mongolia, Montenegro, Oman, Uzbekistan, and West Bank and Gaza) introduced new laws or regulations guaranteeing the right of borrowers to inspect their personal data.  An encouraging trend over the past eight years has been the establishment of new credit bureaus or registries in economies that previously had none.

In the next issue, we will explore the ease of doing business in global economies by examining the remaining 5 regulatory reforms.

About Gain Contact

Gain Contact provides the tools, skills and resources to improve target lifestyle areas. Acting as an umbrella organization, Gain Contact Group is committed to developing the knowledge, competencies, and insights of individuals and organizations through learning solutions that promote global mindsets.

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Diala Pharaon

Co-founder and Chief Innovation Officer of Gain Contact Group, an educational organization providing synchronous and asynchronous language learning and intercultural training to individuals and organizations.

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