Doing Business 2007 How to reform Regulatory Reforms

Doing Business 2007: How to reform Regulatory Reforms in Africa, Eastern Europe and Latin America Melissa Johns Investment Policy Specialist, World Bank November 21, 2006

Poor countries regulate most

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

…ICEIDA partner countries span the range Doing Business 2007 ranking

Reforms among ICEIDA partner countries Nicaragua – Lowered the cost to register property – Private credit bureau opened – Faster customs clearance for exporting Mozambique – Simplified processes to obtain the municipal license – Draft commercial code, labor code Uganda – Moved new company registration out of the courts Sri Lanka – Negative reform: new taxes levied, higher rates Namibia – No reforms

Reform trends in Africa Reforms in 2005/06 by regulatory area 0

Reform trends in Latin America & the Caribbean Reforms in 2005/06 by regulatory area

Iceland’s investment partners are reforming Ranking on Doing Business indicators, number of reforms 2005/06 134 128 96 93 37 6 5 4 2 2

Ukraine business start-up procedures 2005 1. Notarize company charter and execute premises (if needed) 2. Open a temporary bank account for initial capital 3. Transfer registration fee to the Registry's account 4. Register at the Registration Office 5. Register at the Statistics Committee 6. Register with the Pension Fund 7. Register with the Employment Fund 8. Register with the Social Insurance Fund 9. Register with the Industrial Accidents Fund 10. Register at the Tax Police 11. Register for Profit Tax, VAT at Tax Authority, get VAT number 12. Approval of Ministry of Internal Affairs to prepare a company seal 13. Prepare a seal 14. Open a permanent bank account 15. Notify the District Tax Inspectorate of the opening of the permanent bank account

Ukraine business start-up procedures 2006 1. 2. 3. 4. 5. 6. Notarize company charter and execute premises (if needed) Open a temporary bank account for initial capital Transfer registration fee to the Registry's account Register at the Registration Office Register at the Statistics Committee Register for Profit Tax and VAT at Tax Authority, get a VAT number 7. Approval of Ministry of Internal Affairs to prepare a company seal 8. Prepare a seal 9. Open a permanent bank account 10. Notify the District Tax Inspectorate of the opening of the permanent bank account

Reform trends in Eastern Europe Reforms in 2005/06 by regulatory area

48 reforms informed by Doing Business • Simpler business entry in Brazil, Bulgaria, Burkina Faso, El Salvador, Ethiopia, Indonesia, Jordan, Madagascar, Peru, Serbia and Montenegro, Syria, Timor-Leste, Yemen • Faster court enforcement in Jordan, Serbia and Montenegro, Poland • Fewer licenses and approvals required in Poland, Niger, Netherlands • Improved investor protections in Mexico • Credit information improvements in Afghanistan, Georgia, Chengdu (China), Panama,

Eastern Europe ranks first, Africa third in reforms Percentage of countries with at least one reform, 2005/06

List of top worldwide reformers − 2005/06

Large improvements are possible - Africana is #12 The hypothetical country “Africana” has the ease of: • • • Entry in Seychelles (#42) Licensing (construction) in Swaziland (#16) Employing workers in Uganda (#8) Registering property in Sudan (#29) Getting credit in Kenya (#33) Protecting investors in South Africa (#9) Paying taxes in Mauritius (#11) Trade in Cape Verde (#20) Enforcing contracts in Ghana (#50) Closing a business in Botswana (#22)

South Africa: Africa’s top performer Doing Business 2007 ranking

South Africa also leads other major developing countries Doing Business 2007 ranking

South Africa was surpassed on reform intensity within the region