5. Contents
Doing Business 2011 is the eighth in a series of annual reports investigating the Preface v
regulations that enhance business activity and those that constrain it. Doing Business Executive summary 1
presents quantitative indicators on business regulations and the protection of property About Doing Business:
rights that can be compared across 183 economies—from Afghanistan to Zimbabwe— measuring for impact 12
and over time.
Starting a business 18
Regulations affecting 11 areas of the life of a business are covered: starting a business, Dealing with construction permits 26
dealing with construction permits, registering property, getting credit, protecting Registering property 32
investors, paying taxes, trading across borders, enforcing contracts, closing a busi-
Getting credit 39
ness, getting electricity and employing workers. The getting electricity and employing
workers data are not included in the ranking on the ease of doing business in Doing Protecting investors 47
Business 2011. Paying taxes 54
Trading across borders 63
Data in Doing Business 2011 are current as of June 1, 2010. The indicators are used to
analyze economic outcomes and identify what reforms have worked, where and why.
Enforcing contracts 70
Closing a business 77
The methodology for the employing workers indicators changed for Doing Business
2011. See Data notes for details.
Annex: pilot indicators
on getting electricity 84
THE DOING BUSINESS WEBSITE Download reports
Annex: employing workers 93
Access to Doing Business reports as well as
Current features
subnational and regional reports, reform case
News on the Doing Business project
http://www.doingbusiness.org
studies and customized country and regional References 105
profiles
Rankings http://www.doingbusiness.org/Reports
Data notes 110
How economies rank—from 1 to 183
Subnational and regional projects
Summaries of Doing Business
http://www.doingbusiness.org/Rankings
Differences in business regulations at the reforms in 2009/10 134
Doing Business reforms subnational and regional level Country tables 144
Short summaries of DB2011 reforms, lists of http://www.doingbusiness.org/
reformers since DB2004 Subnational-Reports
http://www.doingbusiness.org/Reforms
Law library Acknowledgments 206
Historical data Online collection of laws and regulations
Customized data sets since DB2004 relating to business and gender issues
http://www.doingbusiness.org/Custom-Query http://www.doingbusiness.org/Law-library
http://wbl.worldbank.org
Methodology and research
The methodology and research papers Local partners
underlying Doing Business More than 8,200 specialists in 183 economies
http://www.doingbusiness.org/Methodology who participate in Doing Business
http://www.doingbusiness.org/Research http://www.doingbusiness.org/Local-Partners/
Doing-Business
Business Planet
Interactive map on the ease of doing business
http://rru.worldbank.org/businessplanet
6.
7. v
Preface A vibrant private sector—with firms making investments, creating jobs and improving
productivity—promotes growth and expands opportunities for the poor. In the words
of an 18-year-old Ecuadoran in Voices of the Poor, a World Bank survey capturing the
perspectives of poor people around the world, “First, I would like to have work of any
kind.” Enabling private sector growth—and ensuring that poor people can participate
in its benefits—requires a regulatory environment where new entrants with drive and
good ideas, regardless of their gender or ethnic origin, can get started in business and
where firms can invest and grow, generating more jobs.
Doing Business 2011 is the eighth in a series of annual reports benchmarking
the regulations that enhance business activity and those that constrain it. The
report presents quantitative indicators on business regulation and the protection of
property rights for 183 economies—from Afghanistan to Zimbabwe. The data are cur-
rent as of June 2010.
A fundamental premise of Doing Business is that economic activity requires
good rules—rules that establish and clarify property rights and reduce the cost
of resolving disputes; rules that increase the predictability of economic interac-
tions and provide contractual partners with certainty and protection against abuse.
The objective is regulations designed to be efficient, accessible to all and simple in
their implementation. Doing Business gives higher scores in some areas for stronger
property rights and investor protections, such as stricter disclosure requirements in
related-party transactions.
Doing Business takes the perspective of domestic, primarily smaller companies and
measures the regulations applying to them through their life cycle. Economies are
ranked on the basis of 9 areas of regulation—for starting a business, dealing with
construction permits, registering property, getting credit, protecting investors, paying
taxes, trading across borders, enforcing contracts and closing a business. In addition,
data are presented for regulations on employing workers and for a set of pilot indica-
tors on getting electricity.
Doing Business is limited in scope. It does not consider the costs and benefits of regula-
tion from the perspective of society as a whole. Nor does it measure all aspects of the
business environment that matter to firms and investors or affect the competitiveness
of an economy. Its aim is simply to supply business leaders and policy makers with a
fact base for informing policy making and to provide open data for research on how
business regulations and institutions affect such economic outcomes as productivity,
investment, informality, corruption, unemployment and poverty.
Through its indicators, Doing Business has tracked changes to business regulation
around the world, recording more than 1,500 important improvements since 2004.
Against the backdrop of the global financial and economic crisis, policy makers around
the world continue to reform business regulation at the level of the firm, in some areas
at an even faster pace than before.
These continued efforts prompt questions: What has been the impact? How has busi-
ness regulation changed around the world—and how have the changes affected firms
and economies? Doing Business 2011 presents new data and findings toward answer-
ing these questions. Drawing on a now longer time series, the report introduces a new
measure to illustrate how the regulatory environment for business has changed in
absolute terms in each economy over the 5 years since Doing Business 2006 was pub-
lished. This measure complements the aggregate ranking on the ease of doing business,
which benchmarks each economy’s current performance on the indicators against that
of all other economies in the Doing Business sample. Research is also taking advantage
8. vi DOING BUSINESS 2011
of the longer time series, and studies on business regulation reforms in Latin America
and Eastern Europe and Central Asia show some promising results. But this is only
the beginning. The coming years will be exciting as this growing time series and other
emerging data sets allow researchers and policy makers to find out more about what
works in business regulation—and how and why.
Since its launch in 2003, Doing Business has stimulated debate about policy through its
data and benchmarks, both by exposing potential challenges and by identifying where
policy makers might look for lessons and good practices. Governments have reported
more than 270 business regulation reforms inspired or informed by Doing Business
since 2003. Most were nested in broader programs of investment climate reform aimed
at enhancing economic competitiveness, as in Colombia, Kenya and Liberia. In struc-
turing their reform programs for the business environment, governments use multiple
data sources and indicators. And reformers respond to many stakeholders and interest
groups, all of whom bring important issues and concerns to the debate. World Bank
Group dialogue with governments on the investment climate is designed to encourage
critical use of the data, sharpening judgment, avoiding a narrow focus on improv-
ing Doing Business rankings and encouraging broad-based reforms that enhance the
investment climate.
Doing Business would not be possible without the expertise and generous input of a
network of more than 8,200 local experts, including lawyers, business consultants, ac-
countants, freight forwarders, government officials and other professionals routinely
administering or advising on the relevant legal and regulatory requirements in the
183 economies covered. In particular, the Doing Business team would like to thank
its global contributors: Allen & Overy LLP; Baker & McKenzie; Cleary Gottlieb Steen
& Hamilton LLP; Ius Laboris, Alliance of Labor, Employment, Benefits and Pensions
Law Firms; KPMG; the Law Society of England and Wales; Lex Mundi, Association of
Independent Law Firms; Noronha Advogados; Panalpina; PricewaterhouseCoopers;
PricewaterhouseCoopers Legal Services; Russell Bedford International; SDV Interna-
tional Logistics; and Toboc Inc.
The project also benefited throughout the past year from advice and input from gov-
ernments and policy makers around the world. In particular, the team would like to
thank the governments of Burkina Faso, Colombia, the Arab Republic of Egypt, the
Republic of Korea, the former Yugoslav Republic of Macedonia, Mexico, Portugal and
Rwanda for providing statistical information on the impact of business regulation re-
forms as well as the more than 60 governments that contributed detailed information
on business regulation reforms in 2009/10.
This volume is a product of the staff of the World Bank Group. The team would like to
thank all World Bank Group colleagues from the regional departments and networks
for their contributions to this effort.
Janamitra Devan
Vice President and Head of Network
Financial & Private Sector Development
The World Bank–International Finance
Corporation
9. 1
Executive FIGURE 1.1
Easing start-up, payment of taxes and trade most popular in 2009/10
Share of economies with at least 1 Doing Business reform making it easier to do business, by topic (%)
summary Starting a
business
0 20 40 60 80
Paying
taxes
Trading across
borders
Registering
property
Dealing with
construction permits Doing Business reform
Getting by report year
credit
Closing DB2011 only
a business DB2005–DB2011
Enforcing
contracts
Protecting
investors
Against the backdrop of the global finan- Note: Not all indicators are covered for the full period. Paying taxes, trading across borders, dealing with construction permits and
protecting investors were introduced in Doing Business 2006.
cial and economic crisis, policy makers Source: Doing Business database.
around the world took steps in the past
year to make it easier for local firms start-up to closing (box 1.1). The results factors relevant for business. For exam-
to start up and operate. This is impor- have stimulated policy debates in more ple, it does not evaluate macroeconomic
tant. Throughout 2009/10 firms around than 80 economies and enabled a grow- conditions, infrastructure, workforce
the world felt the repercussions of what ing body of research on how firm-level skills or security. Nor does it assess mar-
began as a financial crisis in mostly high- regulation relates to economic outcomes ket regulation or the strength of financial
income economies and then spread as across economies.1 A fundamental prem- systems, both key factors in understand-
an economic crisis to many more. While ise of Doing Business is that economic ing some of the underlying causes of the
some economies have been hit harder activity requires good rules that are trans- financial crisis. But where business regu-
than others, how easy or difficult it is to parent and accessible to all. lation is transparent and efficient, oppor-
start and run a business, and how effi- Doing Business does not cover all tunities are less likely to be based on per-
cient courts and insolvency proceedings
are, can influence how firms cope with BOX 1.1
Measuring regulation throughout the life cycle of a local business
crises and how quickly they can seize
new opportunities. This year’s aggregate ranking on the ease of doing business is based on indicator sets that
Between June 2009 and May 2010 measure and benchmark regulations affecting 9 areas in the life cycle of a business: starting
governments in 117 economies imple- a business, dealing with construction permits, registering property, getting credit, protecting
mented 216 business regulation reforms investors, paying taxes, trading across borders, enforcing contracts and closing a business.
Doing Business also looks at regulations on employing workers and, as a new initiative, get-
making it easier to start and operate
ting electricity (neither of which is included in this year’s aggregate ranking).1
a business, strengthening transparency
and property rights and improving the Doing Business encompasses 2 types of data and indicators. “Legal scoring indicators,” such
efficiency of commercial dispute resolu- as those on investor protections and legal rights for borrowers and lenders, provide a mea-
tion and bankruptcy procedures. More sure of legal provisions in the laws and regulations on the books. Doing Business gives higher
than half those policy changes eased scores in some areas for stronger property rights and investor protections, such as stricter
start-up, trade and the payment of taxes disclosure requirements in related-party transactions. “Time and motion indicators,” such
(figure 1.1). as those on starting a business, registering property and dealing with construction permits,
Through indicators benchmarking measure the efficiency and complexity in achieving a regulatory goal by recording the pro-
183 economies, Doing Business sheds light cedures, time and cost to complete a transaction in accordance with all relevant regulations
on how easy or difficult it is for a local from the point of view of the entrepreneur. Any interaction of the company with external
entrepreneur to open and run a small to parties such as government agencies counts as one procedure. Cost estimates are recorded
medium-size business when complying from official fee schedules where these apply. For a detailed explanation of the Doing Business
with relevant regulations. It measures methodology, see Data notes.
and tracks changes in the regulations 1. The methodology underlying the employing workers indicators is being refined in consultation with relevant experts and stakehold-
ers. The getting electricity indicators are a pilot data set. (For more detail, see the annexes on these indicator sets.) Aggregate rankings
applying to domestic, primarily smaller published in Doing Business 2010 were based on 10 indicator sets and are therefore not comparable. Comparable rankings based on 9
topics for last year along with this year are presented in table 1.2 and on the Doing Business website (http://www.doingbusiness.org).
companies through their life cycle, from
10. 2 DOING BUSINESS 2011
FIGURE 1.2 Asia and the OECD high-income group,
Seventy-five percent of economies in East Asia and the Pacific reformed reformed their insolvency regimes, in-
business regulation in 2009/10
cluding Belgium, the Czech Republic,
Share of economies with at least 1 Doing Business reform making it easier to do business (%)
Hungary, Japan, the Republic of Korea,
Eastern Europe
& Central Asia 84 Romania, Spain, the United Kingdom
East Asia
75
and the Baltic states (table 1.1).6 Particu-
& Pacific
larly in times of economic distress, ef-
OECD
high income 67 ficient court and bankruptcy procedures
South
63 are needed to ensure that assets can be
Asia
Middle East
reallocated quickly and do not get stuck
61
& North Africa in court. Most of the reforms in this area
Sub-Saharan focused on improving or introducing
Africa 59
Latin America reorganization procedures to ensure that
& Caribbean 47
viable firms can continue operating. Be-
Source: Doing Business database. fore, it was common for insolvent firms
in many economies of Eastern Europe
and Central Asia to be liquidated even
sonal connections or special privileges, land.4 It makes sense for policy makers if they were still viable. Not surprisingly,
and more economic activity is likely to to help such businesses grow. Improving the average recovery rate in the region as
take place in the formal economy, where their regulatory environment is one way calculated by Doing Business is 33 cents
it can be subject to beneficial regulations of supporting them. on the dollar. In OECD high-income
and taxation. Since 2003, when the Doing Consider the story of Bedi Limited, economies the average is 69 cents.
Business project started, policy makers in a garment producer in Nakuru, Kenya.5 Swift action has been the name of
more than 75% of the world’s economies After spending 18 months pursuing a the game in Eastern Europe and Central
have made it easier to start a business in trial order for school items from Tesco, Asia. The region’s policy makers have
the formal sector. A recent study using one of the largest retail chains in the been the most active in implementing
data collected from company registries United Kingdom, Bedi lost out on the business regulation reforms as measured
in 100 economies over 8 years found chance to become part of its global supply by Doing Business since 2004. This past
that economies with efficient business chain. Bedi had everything well planned year was no different, with 21 of 25
registration systems have a higher firm to meet a delivery date set for July. But economies (84%) reforming business
entry rate and greater business density the goods were delayed at the port. When regulation. Besides improving insolvency
on average.2 they arrived in the United Kingdom in procedures, making it easier for firms
Ultimately this is about people. The August, it was too late. The back-to- to start up and to pay taxes were popu-
economic crisis has made it more im- school promotion was over. Changes to lar measures—more than a third of the
portant than ever to create new jobs and regulations and procedures can help im- region’s economies introduced changes
preserve existing ones. As the number of prove the overall trade logistics environ- in each of these areas. Less happened in
unemployed people reached 212 million ment, enabling companies like Bedi to some of the other areas, such as credit
in 2009, 34 million more than at the onset capture such growth opportunities. information systems. But thanks to 36
of the crisis in 2007,3 job creation became reforms in this area since 2004, such
a top priority for policy makers around WHAT WERE THE TRENDS
TABLE 1.1
the world. With public budgets tighter IN 2009/10?
Economies improving the most in each
as a result of stimulus packages and con- Doing Business topic in 2009/10
tracting fiscal revenues, governments For policy makers seeking to improve Starting a business Peru
must now do more with less. Unleashing the regulatory environment for business, Dealing with construction
the job creation potential of small private priorities varied across regions this past Congo, Dem. Rep.
permits
enterprises is therefore vital. year. Registering property Samoa
Small and medium-size businesses Getting credit Ghana
indeed have great potential to create QUICK RESPONSE TO CRISIS Protecting investors Swaziland
jobs. They account for an estimated 95% The global crisis triggered major legal Paying taxes Tunisia
of firms and 60–70% of employment in and institutional reforms in 2009/10. Trading across borders Peru
OECD high-income economies and 60– Facing rising numbers of insolven- Enforcing contracts Malawi
80% of employment in such economies cies and debt disputes, 16 economies, Closing a business Czech Republic
as Chile, China, South Africa and Thai- mostly in Eastern Europe and Central Source: Doing Business database.
11. EXECUTIVE SUMMARY 3
systems are already better developed. Doing Business by 25% by 2015. Small mies introduced changes (7 in all), India
Average coverage is up from 3% of the Pacific island states, which face special continued improvements to its electronic
adult population to 30%. challenges, have also been active, getting registration system for new firms by
key support from donors. allowing online payment of stamp fees.
ECONOMIES IN EAST ASIA AND THE Across Eastern Europe the implemen-
PACIFIC HIT THEIR STRIDE TRADE FACILITATION POPULAR IN tation of European Union regulations
For the first time in the 8 years of Doing AFRICA AND THE MIDDLE EAST encouraging electronic systems triggered
Business reports, economies in East Asia About half of all trade facilitation re- such changes as the implementation of
and the Pacific were among the most forms in 2009/10 took place in Sub- electronic customs systems in Latvia and
active in making it easier for local firms Saharan Africa (with 9) and the Middle Lithuania.
to do business. Eighteen of 24 econo- East and North Africa (6). Several were
mies reformed business regulations and motivated by regional integration. Some WHERE IS IT EASIEST TO DO
institutions—more than in any other of these efforts built on existing ini- BUSINESS?
year. The pace of Doing Business reforms tiatives such as the Southern African
had been steadily picking up since 2006, Customs Union. In East Africa single Globally, doing business remains easi-
when only a third of the region’s econo- border controls speeded up crossings est in OECD high-income economies.
mies implemented such reforms. In the between Rwanda and Uganda. Different In Sub-Saharan Africa and South Asia
past year 75% did (figure 1.2). electronic data systems are still used by entrepreneurs have it hardest and prop-
Emerging-market economies such customs authorities in Kenya, Tanzania erty protections are weakest across the 9
as Indonesia, Malaysia and Vietnam and Uganda. But efforts are under way areas of business regulation included in
took the lead, easing start-up, permit- to create a single interface between these this year’s ranking on the ease of doing
ting and property registration for small systems. Overall, 27 of 46 Sub-Saharan business (figure 1.3).
and medium-size firms and improving African economies implemented Doing Singapore retains the top ranking
credit information sharing. Hong Kong Business reforms, 49 in all. on the ease of doing business this year,
SAR (China), after seeing the number of In the Middle East and North Af- followed by Hong Kong SAR (China),
bankruptcy petitions rise from 10,918 in rica 11 of 18 economies implemented New Zealand, the United Kingdom, the
2007 to 15,784 in 2009, is working on a business regulation reforms, 22 in all. United States, Denmark, Canada, Nor-
new reorganization procedure. Six modernized customs procedures and way, Ireland and Australia (table 1.2).
The momentum in the region may port infrastructure to facilitate trade and Change continued at the top. Among the
continue. Recently leaders of the Asia- align with international standards. These top 25 economies, 18 made it even easier
Pacific Economic Cooperation (APEC) include Bahrain, the Arab Republic of to do business this past year. Within the
organization launched an initiative Egypt and the United Arab Emirates. FIGURE 1.3
aimed at making it easier for small and Which regions have the most business-
medium-size companies to do business ELECTRONIC SYSTEMS ON THE RISE friendly environment in Doing Business?
through systematic peer learning and AROUND THE GLOBE
#1
assistance across economies. The idea is In economies around the world, regard- economy
that economies in the region that have less of location and income level, policy
OECD high income 30
benefited from making it easier to do makers adopted technology to make it
business can now share their experience easier to do business, lower transac-
with others. The Korea Customs Service, tions costs and increase transparency. In
for example, estimates that predictable Latin America and the Caribbean, where Eastern Europe & Central Asia 72
cargo processing times and rapid turn- 47% of economies implemented business East Asia & Pacific 87
over by ports provide a benefit of some regulation reforms in the past year, 23 of Latin America & Caribbean 96
Middle East & North Africa
$2 billion annually. Singapore’s online the 25 reforms simplified administrative
South Asia 117
registration system for new firms saves processes. Many did so by introducing
businesses an estimated $42 million an- online procedures or synchronizing the Sub-Saharan Africa 137
nually.7 Using firm surveys, planners operations of different agencies through
identified 5 priority areas for the APEC electronic systems. In this way Brazil,
initiative—starting a business, getting Chile, Ecuador and Mexico simplified
credit, trading across borders, enforcing start-up, Colombia eased construction 183
Average ranking on
contracts and dealing with permits. The permitting, and Nicaragua made it easier the ease of doing business
goal is to improve regulatory perfor- to trade across borders. (1–183)
mance in those areas as measured by In South Asia, where 5 of 8 econo- Source: Doing Business database.
12. 4 DOING BUSINESS 2011
TABLE 1.2
Rankings on the ease of doing business
DB2011 DB2010 DB2011 DB2011 DB2010 DB2011 DB2011 DB2010 DB2011
RANK RANK ECONOMY REFORMS RANK RANK ECONOMY REFORMS RANK RANK ECONOMY REFORMS
1 1 Singapore 0 62 61 Fiji 1 123 116 Russian Federation 2
2 2 Hong Kong SAR, China 2 63 82 Czech Republic 2 124 122 Uruguay 1
3 3 New Zealand 1 64 56 Antigua and Barbuda 0 125 121 Costa Rica 0
4 4 United Kingdom 2 65 60 Turkey 0 126 130 Mozambique 1
5 5 United States 0 66 65 Montenegro 3 127 124 Brazil 1
6 6 Denmark 2 67 77 Ghana 2 128 125 Tanzania 0
7 9 Canada 2 68 64 Belarus 4 129 131 Iran, Islamic Rep. 3
8 7 Norway 0 69 68 Namibia 0 130 127 Ecuador 1
9 8 Ireland 0 70 73 Poland 1 131 128 Honduras 0
10 10 Australia 0 71 66 Tonga 1 132 142 Cape Verde 3
11 12 Saudi Arabia 4 72 62 Panama 2 133 132 Malawi 2
12 13 Georgia 4 73 63 Mongolia 0 134 135 India 2
13 11 Finland 0 74 69 Kuwait 0 135 133 West Bank and Gaza 1
14 18 Sweden 3 75 72 St. Vincent and the Grenadines 0 136 136 Algeria 0
15 14 Iceland 0 76 84 Zambia 3 137 134 Nigeria 0
16 15 Korea, Rep. 1 77 71 Bahamas, The 0 138 137 Lesotho 0
17 17 Estonia 3 78 88 Vietnam 3 139 149 Tajikistan 3
18 19 Japan 1 79 78 China 1 140 138 Madagascar 2
19 16 Thailand 1 80 76 Italy 1 141 139 Micronesia, Fed. Sts. 0
20 20 Mauritius 1 81 79 Jamaica 1 142 140 Bhutan 1
21 23 Malaysia 3 82 81 Albania 1 143 143 Sierra Leone 3
22 21 Germany 1 83 75 Pakistan 1 144 144 Syrian Arab Republic 3
23 26 Lithuania 5 84 89 Croatia 2 145 147 Ukraine 3
24 27 Latvia 2 85 96 Maldives 1 146 141 Gambia, The 0
25 22 Belgium 1 86 80 El Salvador 0 147 145 Cambodia 1
26 28 France 0 87 83 St. Kitts and Nevis 0 148 146 Philippines 2
27 24 Switzerland 0 88 85 Dominica 0 149 148 Bolivia 0
28 25 Bahrain 1 89 90 Serbia 1 150 150 Uzbekistan 0
29 30 Israel 1 90 87 Moldova 1 151 154 Burkina Faso 4
30 29 Netherlands 1 91 86 Dominican Republic 0 152 151 Senegal 0
31 33 Portugal 2 92 98 Grenada 3 153 155 Mali 3
32 31 Austria 1 93 91 Kiribati 0 154 153 Sudan 0
33 34 Taiwan, China 2 94 99 Egypt, Arab Rep. 2 155 152 Liberia 0
34 32 South Africa 0 95 92 Seychelles 1 156 158 Gabon 0
35 41 Mexico 2 96 106 Solomon Islands 1 157 156 Zimbabwe 3
36 46 Peru 4 97 95 Trinidad and Tobago 0 158 157 Djibouti 0
37 35 Cyprus 0 98 94 Kenya 2 159 159 Comoros 0
38 36 Macedonia, FYR 2 99 93 Belize 0 160 162 Togo 0
39 38 Colombia 1 100 101 Guyana 3 161 160 Suriname 0
40 37 United Arab Emirates 2 101 100 Guatemala 0 162 163 Haiti 1
41 40 Slovak Republic 0 102 102 Sri Lanka 0 163 164 Angola 1
42 43 Slovenia 3 103 108 Papua New Guinea 1 164 161 Equatorial Guinea 0
43 53 Chile 2 104 103 Ethiopia 1 165 167 Mauritania 0
44 47 Kyrgyz Republic 1 105 104 Yemen, Rep. 0 166 166 Iraq 0
45 42 Luxembourg 1 106 105 Paraguay 1 167 165 Afghanistan 0
46 52 Hungary 4 107 111 Bangladesh 2 168 173 Cameroon 1
47 49 Puerto Rico 0 108 123 Marshall Islands 1 169 168 Côte d’Ivoire 1
48 44 Armenia 1 109 97 Greece 0 170 172 Benin 1
49 48 Spain 3 110 110 Bosnia and Herzegovina 2 171 169 Lao PDR 1
50 39 Qatar 0 111 107 Jordan 2 172 170 Venezuela, RB 1
51 51 Bulgaria 2 112 117 Brunei Darussalam 3 173 171 Niger 1
52 50 Botswana 0 113 109 Lebanon 1 174 174 Timor-Leste 1
53 45 St. Lucia 0 114 114 Morocco 1 175 179 Congo, Dem. Rep. 3
54 55 Azerbaijan 2 115 113 Argentina 0 176 175 Guinea-Bissau 1
55 58 Tunisia 2 116 112 Nepal 0 177 177 Congo, Rep. 1
56 54 Romania 2 117 119 Nicaragua 1 178 176 São Tomé and Principe 1
57 57 Oman 0 118 126 Swaziland 2 179 178 Guinea 0
58 70 Rwanda 3 119 118 Kosovo 0 180 180 Eritrea 0
59 74 Kazakhstan 4 120 120 Palau 0 181 181 Burundi 1
60 59 Vanuatu 0 121 115 Indonesia 3 182 182 Central African Republic 0
61 67 Samoa 1 122 129 Uganda 2 183 183 Chad 0
Note: The rankings for all economies are benchmarked to June 2010 and reported in the country tables. This year’s rankings on the ease of doing business are the average of the economy’s rankings on 9 topics (see box 1.1).
Last year’s rankings, shown in italics, are adjusted: they are based on the same 9 topics and reflect data corrections. The number of business regulation reforms includes all measures making it easier to do business.
Source: Doing Business database.
13. EXECUTIVE SUMMARY 5
group of top 25, Sweden improved the used performance measures in the judi- goods crossing the national border and
most in the ease of doing business, rising ciary since the late 1990s. Malaysia in- a modern inspection system (TC-SCAN)
from 18 to 14 in the rankings. It reduced troduced a performance index for judges at the border crossing point shared with
the minimum capital requirement for in 2009. Case disposal rates are already China. As a result, the time to export fell
business start-up, streamlined property improving. by 8 days, the time to import by 9 days
registration and strengthened investor and the number of documents required
protections by increasing requirements MORE WAYS OF TRACKING for trade by 1. Kazakhstan also increased
for corporate disclosure and regulating CHANGE IN BUSINESS the legal requirements for disclosure in
the approval of transactions between in- REGULATION related-party transactions. Thanks to the
terested parties. amendments to its company law, compa-
Economies where it is easy for Every year Doing Business recognizes the nies must describe transactions involv-
firms to do business often have advanced 10 economies that improved the most in ing conflicts of interest in their annual
e-government initiatives. E-government the ease of doing business in the previous report.
kicked off in the 1980s, and economies year and introduced policy changes in 3 The runner-up this year was Rwanda,
with well-developed systems continue to or more areas. This past year Kazakhstan followed by Peru, Vietnam, Cape Verde,
improve them. Hong Kong SAR (China) took the lead (table 1.3). Kazakhstan Tajikistan, Zambia, Hungary, Grenada
and Singapore turned their one-stop amended its company law and intro- and Brunei Darussalam.
shops for building permits into online duced regulations to streamline business Yearly movements in rankings can
systems in 2008. Denmark just intro- start-up and reduce the minimum capi- provide some indication of changes in
duced a new computerized land reg- tal requirement to 100 tenge ($0.70). It an economy’s regulatory environment
istration system. The United Kingdom made dealing with construction permits for firms, but they are always relative.
recently introduced online filing at com- less cumbersome by introducing several An economy’s ranking might change be-
mercial courts. new building regulations in 2009, a new cause of developments in other econo-
Top-ranking economies also often one-stop shop for construction-related mies. Moreover, year-to-year changes in
use risk-based systems to focus their formalities and a risk-based approach for rankings do not reflect how the business
resources where they matter most, such permit approvals. Traders benefit from regulatory environment in an economy
as the supervision of complex building improvements to the automated customs has changed over time.
projects. Germany and Singapore are information system and risk-based sys- To illustrate how the regulatory en-
among the 85 economies that have fast- tems. Several trade-related documents, vironment as measured by Doing Busi-
track permit application processes for such as the bill of lading, can now be ness has changed within economies over
small commercial buildings. submitted online, and customs declara- time, this year’s report introduces a new
Finally, these economies tend to tions can be sent in before the cargo measure. The DB change score provides
hold public servants accountable through arrives. Modernization efforts, already a 5-year measure of how business regu-
performance-based systems. Australia, under way for several years, also include lations have changed in 174 economies.8
Singapore and the United States have a risk management system to control It reflects all changes in an economy’s
TABLE 1.3
The 10 economies improving the most in the ease of doing business in 2009/10
Dealing with Trading
Starting a construction Registering Protecting Paying across Enforcing Closing a
Economy business permits property Getting credit investors taxes borders contracts business
Kazakhstan
Rwanda
Peru
Vietnam
Cape Verde
Tajikistan
Zambia
Hungary
Grenada
Brunei Darussalam
Note: Economies are ranked on the number and impact of reforms. First, Doing Business selects the economies that implemented reforms making it easier to do business in 3 or more of the 9 topics included in this
year's aggregate ranking (see box 1.1). Second, it ranks these economies on the increase in their ranking on the ease of doing business from the previous year using comparable rankings. The larger the improve-
ment, the higher the ranking as a reformer.
Source: Doing Business database.
14. 6 DOING BUSINESS 2011
FIGURE 1.4 DB change score
In the past 5 years about 85% of economies made it easier to do business 0.5
Five-year measure of cumulative change in Doing Business indicators between DB2006 and DB2011
0.4
0.3
Doing business
became easier
0.2
0.1
GEORGIA
RWANDA
BELARUS
BURKINA FASO
ZAMBIA
CAMEROON
SAUDI ARABIA
MALI
KYRGYZ REPUBLIC
GHANA
CROATIA
KAZAKHSTAN
MACEDONIA, FYR
MOZAMBIQUE
EGYPT, ARAB REP.
UKRAINE
CHINA
ALBANIA
TAJIKISTAN
NIGERIA
CZECH REPUBLIC
SYRIAN ARAB REPUBLIC
SIERRA LEONE
UZBEKISTAN
COLOMBIA
AZERBAIJAN
SENEGAL
MADAGASCAR
ARMENIA
PERU
MAURITIUS
MALAWI
VIETNAM
TIMOR-LESTE
BOSNIA AND HERZEGOVINA
FRANCE
POLAND
GUATEMALA
MEXICO
HAITI
INDIA
DOMINICAN REPUBLIC
YEMEN, REP.
RUSSIAN FEDERATION
CONGO, DEM. REP.
TOGO
TUNISIA
DENMARK
CAMBODIA
INDONESIA
CÔTE D'IVOIRE
MAURITANIA
IRAN, ISLAMIC REP.
NIGER
ANGOLA
MOROCCO
SLOVENIA
THAILAND
LAO PDR
SLOVAK REPUBLIC
ROMANIA
TANZANIA
UNITED ARAB EMIRATES
PORTUGAL
HONG KONG, CHINA
UNITED KINGDOM
SERBIA
BENIN
GUINEA-BISSAU
GAMBIA, THE
SWAZILAND
SUDAN
PARAGUAY
BULGARIA
BANGLADESH
MALDIVES
UGANDA
SWEDEN
ALGERIA
BOTSWANA
VANUATU
ETHIOPIA
TURKEY
AUSTRALIA
JORDAN
BRAZIL
PAPUA NEW GUINEA
Note: The DB change score illustrates the level of change in the regulatory environment for local entrepreneurs as measured by 9 Doing Business indicator sets over a period of 5 years.
This year’s DB change score ranges from –0.1 to 0.54. More details on how the DB change score is constructed can be found in the Data notes.
Source: Doing Business database.
business regulation as measured by the not a one-time effort and that the changes It created its first credit bureau, computer-
Doing Business indicators—such as a introduced were substantial. Since 2005 ized the company registry and overhauled
reduction in the time to start a business Rwanda has implemented 22 business its property registration system, moving
thanks to a one-stop shop or an increase regulation reforms in the areas measured from a deed to a title registration system.
in the strength of investor protection by Doing Business. Results show on the The multiyear reform reduced the time
index thanks to new stock exchange rules ground. In 2005 starting a business in to transfer property from 24 weeks to 5.
that tighten disclosure requirements for Rwanda took 9 procedures and cost 223% The state now guarantees the title and its
related-party transactions. The findings of income per capita. Today entrepre- authenticity. Regulatory reforms in Mali
are encouraging: in about 85% of the 174 neurs can register a new business in 3 picked up in recent years. Key achieve-
economies, doing business is now easier days, paying official fees that amount to ments include customs reforms, a new
for local firms (figure 1.4). 8.9% of income per capita. More than one-stop shop for business start-up and
The 10 economies that made the 3,000 entrepreneurs took advantage of amendments to the civil procedure code
largest strides in making their regulatory the efficient process in 2008, up from an in 2009 that strengthened protections for
environment more favorable to business average of 700 annually in previous years. minority shareholders and improved the
are Georgia, Rwanda, Belarus, Burkina Registering property in 2005 took more (still lengthy) court procedures to resolve
Faso, Saudi Arabia, Mali, the Kyrgyz Re- than a year (371 days), and the transfer commercial disputes.
public, Ghana, Croatia and Kazakhstan. fees amounted to 9.8% of the property Some large emerging-market econ-
All implemented more than a dozen value. Today the process takes 2 months omies also made significant changes at
Doing Business reforms over the 5 years. and costs 0.4% of the value. A new com- a steady pace. China is one. Over sev-
Several—including Georgia, Rwanda, pany law adopted in 2009 strengthened eral years China introduced 14 policy
Belarus, Burkina Faso, the Kyrgyz Re- investor protections by requiring greater changes making it easier to do business,
public, Croatia and Kazakhstan—have corporate disclosure, increasing the li- affecting 9 areas covered by Doing Busi-
also been recognized as top 10 Doing ability of directors and improving share- ness. In 2005 a new company law reduced
Business reformers in previous years. holders’ access to information. what had been one of the world’s high-
Rwanda, for example, was recog- Others, such as Ghana and Mali, est minimum capital requirements from
nized last year. The cumulative improve- took a steady approach, improving the 1,236% of income per capita to 118%.
ment over the past 5 years as measured by business environment over several years. In 2006 a new credit registry started
the DB change score shows that this was Ghana implemented measures in 6 areas. operating. Today 64% of adults have a
15. EXECUTIVE SUMMARY 7
DB change score
0.5
0.4
0.3
0.2
0.1
VENEZUELA, R.B.
CONGO, REP.
ARGENTINA
SINGAPORE
ZIMBABWE
LITHUANIA
SURINAME
COMOROS
PAKISTAN
FINLAND
NORWAY
NAMIBIA
ICELAND
ESTONIA
GUINEA
GABON
PALAU
CHAD
ITALY
FIJI
SOLOMON ISLANDS
UNITED STATES
KOREA, REP.
COSTA RICA
AFGHANISTAN
BHUTAN
HONDURAS
WEST BANK AND GAZA
CAPE VERDE
MONGOLIA
GUYANA
MICRONESIA, FED. STS.
LESOTHO
TAIWAN, CHINA
ISRAEL
EL SALVADOR
MOLDOVA
IRELAND
HUNGARY
MARSHALL ISLANDS
SAMOA
MALAYSIA
URUGUAY
IRAQ
BELGIUM
BURUNDI
OMAN
NICARAGUA
SPAIN
DJIBOUTI
TONGA
PUERTO RICO
LEBANON
ECUADOR
GREECE
LATVIA
KENYA
PHILIPPINES
KUWAIT
SOUTH AFRICA
ERITREA
CANADA
SWITZERLAND
ST. VINCENT AND THE GRENADINES
ANTIGUA AND BARBUDA
GRENADA
TRINIDAD AND TOBAGO
SRI LANKA
KIRIBATI
BELIZE
JAMAICA
EQUATORIAL GUINEA
AUSTRIA
CENTRAL AFRICAN REPUBLIC
DOMINICA
SEYCHELLES
BOLIVIA
NEW ZEALAND
PANAMA
ST. KITTS AND NEVIS
ST. LUCIA
NEPAL
SÃO TOMÉ AND PRINCIPE
NETHERLANDS
JAPAN
CHILE
GERMANY
–0.1
Doing business
became more
difficult
credit history. In 2007, after 14 years of reform but also on the starting point. especially well researched. But corre-
consultation, a new property rights law For example, Finland or Singapore, with lation does not mean causality. Other
came into effect, offering equal protec- efficient e-government systems in place country-specific factors or other changes
tion to public and private property and and strong property rights protections by taking place simultaneously—such as
expanding the range of assets that can be law, has less room for improvement. Oth- macroeconomic reforms—may also have
used as collateral. ers, such as Italy, implemented several played a part.
India implemented 18 business reg- regulatory reforms in areas where results How do we know whether things
ulation reforms in 7 areas. Many focused might be seen only in the longer term, would have been any different without
on technology—implementing electronic such as judiciary or insolvency reforms. the regulatory reform? Some studies
business registration, electronic filing for have been able to test this by investi-
taxes, an electronic collateral registry and WHAT IS THE EFFECT ON FIRMS, gating variations within a country over
online submission of customs forms and JOBS AND GROWTH? time, as when Colombia implemented
payments. Changes also occurred at the a bankruptcy reform that streamlined
subnational level. In India, as in other Rankings and the 5-year measure of cu- reorganization procedures. Following the
large nations, business regulations can mulative change (DB change score) are reform, viable firms were more likely
vary among states and cities. While Doing still only indicative. Few would doubt the to be reorganized than liquidated, and
Business focuses on the largest business benefit of reducing red tape for business, firms’ recoveries improved.11 Other stud-
city in an economy, it complements its particularly for small and medium-size ies investigated policy changes that af-
national indicators with subnational businesses. But how do business regula- fected only certain firms or groups. Using
studies, recognizing the interest of gov- tion reforms affect the performance of the unaffected group as a control, they
ernments in these variations. According firms and contribute to jobs and growth? found that reforms easing formal busi-
to Doing Business in India, 14 of the 17 A growing body of empirical research ness entry in Colombia, India and Mexico
Indian cities covered in the study imple- has established a link between the regu- led to an increase in new firm entry and
mented changes to ease business start- latory environment for firms and such competition.12 Thanks to simplified mu-
up, construction permitting and property outcomes as the level of informality, nicipal registration formalities for firms
registration between 2006 and 2009.9 employment and growth across econo- in Mexico, the number of registered busi-
The level of change depends not mies.10 The broader economic impact nesses increased by 5%, and employment
only on the pace of business regulation of lowering barriers to entry has been by 2.8%, in affected industries.
16. 8 DOING BUSINESS 2011
FIGURE 1.5
DB2011
Eastern Europe and Central Asia setting a strong pace
DB2010
Share of economies with at least 1 Doing Business reform making it easier to do business by Doing Business report year (%) DB2009
100 100 DB2008
96
91 91 DB2007
89
83 84 83 DB2006
80 79
75 73 75
71
67 67 67 67 67
63 63
60 59 61 62 62 61 63 59
57 58 56 56
53 52
48 50 50
46 47
40 39 38
35
25
20
0
East Asia Eastern Europe OECD Latin America Middle East South Sub-Saharan
& Pacific & Central Asia high income & Caribbean & North Africa Asia Africa
Note: Several economies have been reclassified to the OECD high-income group and are treated as if part of that group for the full period: the Czech Republic, Hungary and the Slovak Republic from Eastern Europe and
Central Asia in 2008, and Poland and Slovenia in 2010; and Israel from the Middle East and North Africa in 2010. In addition, 15 additional economies were added to the sample between Doing Business 2006 and
Doing Business 2011.
Source: Doing Business database.
Other promising results are emerg- WHERE ARE THE OPPORTUNITIES There they lack access to formal business
ing. Using panel data from enterprise IN DEVELOPING ECONOMIES? credit and markets, and their employees
surveys, new research associates busi- receive fewer benefits and no protec-
ness regulation reforms in Eastern Eu- More than 1,500 improvements to busi- tions. Globally, 1.8 billion people are
rope and Central Asia with improved ness regulations have been recorded by estimated to be employed in the informal
firm performance.13 While such factors Doing Business in 183 economies since sector, more than the 1.2 billion in the
as macroeconomic reforms, technologi- 2004. Increasingly, firms in developing formal sector.15
cal improvements and firm characteris- economies are benefiting. In the past While overly complicated proce-
tics may also influence productivity, the year about 66% of these economies made dures can hinder business activity, so
results are encouraging. it easier to do business, up from only 34% can the lack of institutions or regulations
The region’s economies were the of this group 6 years before. Compelling that protect property rights, increase
most active in improving business regu- results are starting to show, as illustrated transparency and enable entrepreneurs
lation over the past 6 years, often in re- by Rwanda and Ghana, and these results to make effective use of their assets.
sponse to new circumstances such as the have inspired others. When institutions such as courts, col-
prospect of joining the European Union This is good news, because oppor- lateral registries and credit information
or, more recently, the financial crisis tunities for regulatory reform remain. bureaus are inefficient or missing, the
(figure 1.5). Some 93% of its economies Entrepreneurs and investors in low- and talented poor and entrepreneurs who
eased business start-up, and 20 econo- lower-middle-income economies con- lack connections, collateral and credit
mies established one-stop shops. Starting tinue to face more bureaucratic formali- histories are most at risk of losing out.16
a business in the region is now almost as ties and weaker protections of prop- So are women, because institutions and
easy as it is in OECD high-income econo- erty rights than their counterparts in regulations such as credit bureaus and
mies. Immediate benefits for firms are high-income economies. Exporting, for laws on movable collateral support the
often cost and time savings. In Georgia a example, requires 11 documents in the types of businesses that women typically
2009 survey found that the new start-up Republic of Congo but only 2 in France. run—small firms in low-capital-inten-
service center helped businesses save an Starting a business still costs 18 times as sive industries in both the formal and the
average of 3.25% of profits—and this much in Sub-Saharan Africa as in OECD informal sector (box 1.2).17
is just for registration services. For all high-income economies (relative to in- Today only 1.3% of adults in low-in-
businesses served, the direct and indirect come per capita). Many businesses in come economies are covered by a credit
savings amounted to $7.2 million.14 developing economies might simply opt bureau. Many micro, small and medium-
out and remain in the informal sector. size enterprises, which typically have
17. EXECUTIVE SUMMARY 9
BOX 1.2
Encouraging women in business
Women make up more than 50% of the world’s population but less than 30% of the labor force in some economies. This represents untapped
potential. For policy makers seeking to increase women’s participation in the economy, a good place to start is to ensure that institutions and
laws are accessible to the types of businesses and jobs women currently hold.
Take credit bureaus. With the advent of microfinance institutions in the 1970s, poor women in some parts of the world were able to access credit
for the first time. By 2006 more than 3,330 microfinance institutions had reached 133 million clients. Among these clients, 93 million had been
in the poorest groups when they took their first loans, and 85% of the poorest were women. But only 42 of 128 credit bureaus in the world cover
microfinance institutions, limiting the ability of their borrowers to build a credit history. A new World Bank Group project, Women, Business and
the Law, looks into discrepancies such as these as well as regulations that explicitly differentiate on the basis of gender.1
A recent analysis of existing literature concludes that aspects of the business regulatory environment are estimated to disproportionately af-
fect women in their decision to become an entrepreneur and their performance in running a formal business. Barriers to women’s access to
finance might drive their concentration in low-capital-intensive industries, which require less funding but also have less potential for growth
and development. One possible barrier is that women may have less physical and “reputational” collateral than men.2
Women can benefit from laws facilitating the use of movable assets such as equipment or accounts receivable as security for loans. While
women often lack legal title to land or buildings that could serve as collateral, they are more likely to have movable assets. In Sri Lanka women
commonly hold wealth in the form of gold jewelry. Thankfully, this is accepted by banks as security for loans.3
Women often resort to informal credit, which involves high transactions costs. A recent study in Ghana reports that women, to ensure access
to credit, invest considerable time in maintaining complex networks of informal credit providers.4
Improving firms’ access to formal finance has been shown to pay off, by promoting entrepreneurship, innovation, better asset allocation and
firm growth.5 Everyone should be able to benefit, regardless of gender.
1. http://wbl.worldbank.org/.
2. Klapper and Parker (2010).
3. Pal (1997).
4. Schindler (2010).
5. World Bank (2008).
95% of their assets in movable property added 50 economies to the sample. In access levels that exist outside the Doing
rather than real estate, cannot use those the past year Doing Business has been Business report as well as other data on
assets to raise funds to expand their busi- working on 2 indicator sets—a new set the availability and reliability of electric-
ness. But this is not so everywhere. While on getting electricity and a refined one ity supply and consumption prices. The
only 35% of Sub-Saharan African econo- on employing workers.18 new data allow objective comparison of
mies have laws encouraging the use of the procedures, time and cost to obtain
all types of assets as collateral, 71% of IDENTIFYING REGULATORY REFORM a new electricity connection across a
East Asian and Pacific and 68% of OECD POSSIBILITIES IN GETTING ELECTRICITY wide range of economies. Some, such as
high-income economies do. Seventy low- According to World Bank surveys of Germany, Iceland and Thailand, perform
and lower-middle-income economies businesses, managers in 108 economies well: a business with moderate electricity
lack centralized collateral registries that consider the availability and reliability of demand can get a connection in 40 days
tell creditors whether assets are already electricity to be the second most impor- or less. But in the Czech Republic it can
subject to the security right of another tant constraint to their business activ- take 279 days, in Ukraine 309 and in the
creditor. All this presents an opportunity ity, after access to finance. Studies have Kyrgyz Republic 337.
for changes that can promote the growth shown that poor electricity supply ad- Analysis of the data presented in the
of firms and employment. versely affects the productivity of firms annex on getting electricity sheds some
and the investments they make in their light on both bottlenecks and possible
WHAT’S NEXT? productive capacity.19 But electricity ser- starting points for dialogue on regulatory
vices not only matter to businesses; they reform. In 100 of 176 economies con-
Doing Business has been measuring busi- also are among the most regulated areas nection costs are insufficiently transpar-
ness regulation from the perspective of of economic activity. Doing Business ent.20 Utilities present customers with
local firms and tracking changes over measures how such regulations affect individual budgets rather than clearly
time since 2003. Since its initiation, the businesses when getting a new connec- regulated capital contribution formu-
project has introduced 5 new topics and tion. The indicators complement data on las. This reduces the accountability of