* Cyprus improves in ‘Doing Business’ report, mainly on much-needed reforms *
Singapore is once again the best country for doing business, with a swift and transparent judicial system, just 150 days to resolve commercial disputes and since early last year, litigants and lawyers have been able to file cases, exchange documents, schedule hearings, and hold conferences entirely online, acciording to th World Bank’s annual review.
But other countries have been catching up with significant reforms and regulations that enhance business activity, according to the “Doing Business 2016: Measuring Regulatory Quality and Efficiency”, with Cyprus mentioned several times in the significant improvements and changes it has implemented from June 2014 to June this year.
Also, while the best countries to do business are also the wealthiest and economically mature, an unlikely FYROM has made it into the top ten, based purely on its efficient and quick processes for new business and utilising online services.
On the other hand, half of the worst ten are also among the richer in the world as regards natural resources, where obviously national wealth is not re-invested in building infrastructure and transparent public procedures.
The World Bank’s latest report “Doing Business” report concluded that it takes roughly 20 days to start a business on average globally, but in some nations it can take four or five times as long.
The 13th report rated 189 economies in ten separate areas of business regulations, including starting a business, permits, getting electricity, property registration, access to credit, and taxes.
As regards Singapore, a streamlined construction process also contributes to the city state’s favourable business climate. It takes only 26 days to get a construction permit in Singapore, the quickest proceedings of any country.
As Dr. Rita Ramalho, lead author of the Doing Business 2016 report explained, relatively simple and efficient legal procedures such as these do more than just support the businesses they regulate.
“Countries with simpler business processes tend to have a higher level of firm creation and a higher level of job creation,” she said. In other words, when regulations allow entrepreneurs to function and be creative, the whole economy improves.
Wealth typically coincides with a supportive business environment, and while this is not always the case, Singapore residents are quite wealthy. Each resident earns $51,150 annually on average. By contrast, the United States has a gross national income (GNI) per capita of $55,200.
The World Bank report found that entrepreneurs in 122 economies saw improvements in their local regulatory framework last year, documenting 231 business reforms to reduce the complexity and cost of regulatory processes.
Cyprus and nine other nations (Costa Rica, Uganda, Kenya, Mauritania, Uzbekistan, Kazakhstan, Jamaica, Senegal and Benin) are among the economies that improved the most implementing 39 regulatory reforms making it easier to do business.
Sub-Saharan Africa alone accounted for about 30% of the regulatory reforms making it easier to do business in 2014/15, followed closely by Europe and Central Asia.
This year’s report adds indicators of quality to four indicator sets: registering property, dealing with construction permits, getting electricity and enforcing contracts. In addition, the trading across borders indicators have been revised to increase their relevance.
As regards insolvency reforms, three of the ten top improvers reformed their contract enforcement system, while both Cyprus and Kazakhstan introduced fast-track simplified procedures for small claims.
Most other insolvency reforms focused on introducing new reorganisation procedures or improving the existing reorganisation framework. Chile and Cyprus introduced court-supervised reorganisation procedures.
Several insolvency reforms recorded in 2014/15 were aimed at facilitating the continuation of the debtor’s business during insolvency proceedings. Cyprus and Rwanda introduced provisions allowing the invalidation of preferential and undervalued transactions concluded by the debtor before the commencement of insolvency proceedings.
However, Cyprus has a lot to learn from Azerbaijan that was among those making the biggest improvements in the ease of dealing with construction permits and establishing a construction sector one-stop-shop.
The “Doing Business” report recorded 22 reforms making it easier to get electricity in 2014/15. Most of the reforms reduced the number of days required to complete a certain procedure, including those in Botswana, Cyprus, Taiwan, China, Togo and Vietnam. However, Cyprus still has a long way to go on this matter.
Elsewhere, credit bureaus in Cyprus and the Kyrgyz Republic began distributing both positive and negative credit information on borrowers — and the one in Cyprus (Artemis) began reporting five years of credit history on both borrowers and guarantors to banks and other financial institutions.
Cyprus was among 24 economies improving the most across three or more “Doing Business” topics in 2014/15. It fared well in getting electricity, getting credit, paying taxes, enforcing contracts and resolving insolvency.
The World Bank report said that “the utility in Cyprus [EAC] made getting electricity easier by reducing the time required for obtaining a new connection.
“Cyprus improved access to credit information by allowing credit bureaus to collect and report positive credit information and to report credit histories for both borrowers and guarantors.
“Cyprus made paying taxes easier for companies by facilitating online payment of corporate income tax. At the same time, Cyprus raised the contribution rate for social insurance paid by employers, lowered the tax brackets for the social contribution fund, raised the rate on interest income and increased the vehicle tax.
“Cyprus made enforcing contracts easier by introducing a fast-track simplified procedure for claims worth less than EUR 3,000.
“Cyprus made resolving insolvency easier by introducing a reorganisation procedure as well as provisions to facilitate the continuation of the debtor’s business during insolvency proceedings and allow creditors greater participation in important decisions during the proceedings.”
The report did not record and impediments or regulatory obstacles in setting up or maintaining a business.
