Singapore has become the easiest place in the world in which to operate a business according to the results of a newly published study, which has concluded that doing business became easier worldwide in 2005/6.
The 'Doing Business 2007' report by the World Bank and its lending arm, the International Financial Corporation, ranks 175 economies on the ease of doing business by considering factors affecting how easy it is to start and run a company in these countries.
This year, Singapore assumed top spot in the ranking, taking the place of New Zealand which fell to second place following the introduction of more complex business licensing legislation. The US, Canada and Hong Kong/China rounded out the top five, followed by the UK, Denmark, Australia, Norway and Ireland.
According to the World Bank, the rankings track indicators of the time and cost to meet government requirements in business startup, operation, trade, taxation, and closure. They do not track variables such as macroeconomic policy, quality of infrastructure, currency volatility, investor perceptions, or crime rates.
Georgia was the top reformer in 2005/06, improving in 6 of the 10 areas studied by Doing Business. It reduced the minimum capital required to start a business, sped up customs, licensing, and court procedures, and made labour regulation more flexible. Business registrations rose by 55% between 2005 and 2006.
China and Eastern European countries were also active in enacting reforms. China sped business entry, increased investor protections, and reduced red tape in trading across borders. It also established a credit information registry for consumer loans. Now banks can check the credit histories of 340 million citizens before extending them loans.
The desire to join the European Union inspired reformers in Bulgaria, Croatia, and Romania (the second-fastest reformer). And regulatory competition in the enlarged union added to Latvia’s momentum for reform. For the first time, Africa makes the top three among reforming regions, after Eastern Europe and the OECD countries. Two-thirds of African countries made at least one reform, and Tanzania and Ghana rank among the top 10 reformers.
The most popular reform in 2005/06 was easing the regulation of business start-up. Forty-three countries simplified procedures, reducing costs and delays. The second most popular reform — implemented in 31 countries — was reducing tax rates and the administrative hassle of paying taxes.
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