The World Bank and International Finance Corp. released their annual “Doing Business” report. This is considered a major report for the international business community because it looks at how governments across the globe have made important reforms to become business-friendly.
This year’s report, which covers the period from Jun. 2011 to Jun. 2012, looks at 185 nations from around the world and ranks them based on 10 areas of regulatory burdens that affect small- and medium-sized businesses. Such measures include enforcing contracts, getting credit, paying taxes and just starting a business in the first place.
Although Singapore, Hong Kong and New Zealand were ranked the top three business-friendly countries, New Zealand was ranked first when it comes to actually starting a business. Over there, it only takes one day and one procedure to establish a business.
Furthermore, New Zealand was ranked first for protecting investors and second for registering property – it only takes two days and two procedures. In terms of getting credit, New Zealand was placed in the fourth spot globally, which the World Bank says Australia’s neighbor has made it easier to collect information.
What about the United States? It was ranked fourth overall, but placed in 13th in starting a business. It takes six days and a number of 13 procedures to enter the world of business, while ranked 25th in registering property, 19th in getting electricity and 22nd in trading across borders.
In general, the report found that countries have performed intense reforms and have improved significantly from a decade ago when the annual study was first performed. In total, 201 reforms have taken place in 108 countries in the past year.
Eighty-eight percent of Eastern European and East Asian states have performed at least one major business regulation change. The top 10 economies that made the biggest improvements were Poland, Sri Lanka, Ukraine, Uzbekistan, Burundi, Costa Rica, Mongolia, Greece, Serbia and Kazakhstan.
“We are very encouraged by the rapid pace of reform in Eastern Europe and Central Asia,” said Augusto Lopez-Claros, Director, Global Indicators and Analysis of the World Bank Group, in a news release. “Many of these reforms have been implemented in the context of EU accession negotiations. Economic integration and the desire to catch up with more prosperous partners has been a powerful incentive to promote ambitious reform agendas.
Here is the top 10 list of business-friendly countries: Singapore, Hong Kong, New Zealand, the United States, Denmark, Norway, the United Kingdom, the Republic of Korea, Georgia and Australia
Some of the benefits include:
– Average business start times fell from 50 days to 30 days
– Property transfers declined from 90 days to 55 days
– Many countries have simplified their tax code
– The time to comply with consumption, labor and profit taxes fell by 54 hours
“Over the years, governments have made important strides to improve their business regulatory environment and to narrow the gap with global best practices,” said Lopez-Claros. “While the reforms we measure provide only a partial picture of an economy’s business climate, they are crucial for key economic outcomes such as faster job growth and new business creation.”
Although the U.S. was ranked No. 4 on the international stage, Economic Collapse News reported that abiding by regulations can be quite costly. A report from the Competitive Enterprise Institute (CEI) showed that current and future federal, state and local regulations are costing businesses and taxpayers more than $1.8 trillion per year.
Also, ECN reported in September that a study by The Hudson Institute found that entrepreneurship is at a 30-year low, which has led to a lack of employment opportunities. The numbers for 2010 suggest a drop by 20 percent to 2.34 million jobs.