Global Trends - Business Registration

Paula Garcia SernaHans Shrader

March 2013

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Starting a business: the indicator

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Where is starting a business easy? What do many have in common?

New Zealand

Australia

Canada

Singapore

Macedonia FYR

Hong Kong SAR, China

Georgia

Rwanda

Belarus

Ireland

Global good practice

No or minimal minimum capital requirement

Standardized forms

No courts involved

Fixed registration fee

No publication in legal journal required

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Who has narrowed the distance to frontier in starting a business the most since 2005?

The distance to frontier measure shows how far onaverage an economy is from the best performance achievedby any economy on each Doing Business indicator since2005—in this case for the starting a business indicators.

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88%

47%

38%

46%

61%

68%

OECD high Income Eastern Europe and Central Asia

Sub-Saharan Africa

Middle East and North Africa

Latin America & the Caribbean South Asia

East Asia and Pacific

Pace of reforms remains strong worldwide: 108 economies implemented 201 reforms in 2011/12

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45%

Nearly half of all economies in East Asia and Pacific reformed in one or more areas of business regulation in 2011/12

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6

Number of reforms easing start-up since DB2006

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The most popular reforms in 2010/11

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Incorporation fees tend to be lower in economies where fee schedules are easily accessible

Globally, the average time to start a business fell from 50 days to 30, and the average cost from 89% of income per capita to 31.27%.

Over the past 8 years Doing Business recorded 368 business registration reforms in 149 economies

In 2011/12, 36 economies made it easier to start a business, with streamlining registration formalities the most common feature

Entrepreneurs in Sub-Saharan Africa continue to face the highest cost and highest paid-in minimum capital

What are the trends since DB2006

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Transparency in public agencies

Company Rgistry

Property Registry

Distribution Utility

Builiding department

79

6456 53

Share of economies where agency makes fee schedules easily available (%)

Share economies where agencies makes fees available

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It was possible to start a business in less than 20 days in only 40 economies, mostly in North America and Northern and Central Europe

Now, the time to start a business is less than 20 days for entrepreneurs in 105 economies

2005

2012*

*Based on samples of 174 economies in 2005 and 185 economies in 2012

Reforms making it easier to start a business show results over time in reduced delays…

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11

… and big reductions in the cost to start a business around the world

Latin America & Caribbean

Sub-Saharan Africa

Middle East & North Africa

South Asia

East Asia & Pacific

Eastern Europe & Central Asia

OECD high income

0 50 100

74

39

38

52

37

22

53

34

21

19

36

14

12

DB2013DB2006

31.3

232.9

Global Average

As of 2012, 91 economies have no minimum capital requirement.

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Putting Policy into Practice: Bangladesh

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WORLD BANK – DEVELOPMENT BANK

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The Office of Registrar Joint Stock Companies and Firms (RJSC) …. Prior to Reform ….

The Toolkit Case Study on Bangladesh

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And today…a fully functioning online system and a pioneering agency to implement Digital Bangladesh vision

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Before and After the Online System

Before At least 7 days to get Name Clearance

At least 30-40 days and often more than 60 days to get Registration

4-5 weeks related to stamp duty and treasury chalan

After No visit for name clearance Only four hours to get registration through Fast

Track. No requirement for adhesive stamp. Payment at the Bank in 15 minutes and all

information available in the web

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Reduced scope for bribery and corruption Increase of transparency

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Reform Options that have Impact

♦ Flat fee schedule

♦ Standardized incorporation documents 

♦ Moving registration out of the courts

♦ Making the use of notaries optional

♦ Reducing or eliminating the minimum capital requirement

♦ Making the registration process transparent and accountable

♦ Integrated Registration System and Unique Company ID

♦ Creating a Single Interface --- One Stop Shop

♦ ICT led registration system

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Do and Don’t of ICT-led BR System

Don’ts - frequently made common mistakes:

♦ Hardware and Software cannot resolve a problem that was not articulated

♦ What works for a particular country will work anywhere (the Bandwagon effect)

♦ Registry staff and users will easily adapt to a new technology

♦ Once the system is automated my problems will be over

Do’s - it always is worth doing:

♦ Careful mapping and streamlining of processes

♦ Make prototypes and test:

♦ Utilize synergies with eGov and other agencies

Check Implementing Electronic Business Registry (e-BR) Services, WBG

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Phases of Engagement

1. Receive Government request

2. Prepare DB Reform Memo

3. Discussions with the Government• Identify priority areas for reform• Agree on reform action plans• Design a TA reform program

4. Monitoring & evaluation

The DB Reform Unit was set up in 2007 to respond to government requests for assistance in reform in areas covered by Doing Business

Partners

WBG, donors

DB Reform, WBG

DB Reform; Regional and product BEE teams; WBG; donors

DB Project

World Bank Group Collaboration for Reform

Reforming Business Registration: A Toolkit for Policymakers and Practitioners

♦ The toolkit analyzes: Fundamentals of international good

practices in BR reforms Legal, business process, and

institutional reform implementation issues

BR reform issues in Fragile and Conflict-Affected States (FCAS)

Project life-cycle of a BR reform program

Country case studies and web resources

♦ The toolkit does not: Provide a one-model-fits-all strategy

but helps practitioners to design their own strategy based on their country-context.

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THANKS!

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Doing Business: www.doingbusiness.org World Bank Group Entrepreneurship database:

http://www.doingbusiness.org/data/exploretopics/entrepreneurship

Reforming Business Registration. A tool for practitioners: www.wbginvestmentclimate.org