Washington, D.C., October 29, 2014—A new World Bank Group report finds that 85 percent of economies in Europe and Central Asia implemented at least one regulatory reform aimed at making it easier for local entrepreneurs to do business in 2013/14, a larger percentage than in any other region.
Doing Business 2015: Going Beyond Efficiency shows that in the past year, economies in Europe and Central Asia further improved the regulatory environment for local entrepreneurs, adding to the gains recorded in the past decade. For example, 10 years ago, starting a new business took a Macedonian entrepreneur 48 days. Today, the process can be completed in 2 days.
Armenia made starting a business easier by streamlining post-registration procedures. As a result of this reform, Armenia has improved its position by 1.3 points. Compared to the ranking of 2014 in 2015 the country has advanced to 45th position as compared with the previous 49th place. Nevertheless, when juxtaposed with the best performing country, the distance measured through a newly introduced back-calculated distance to frontier score, it constitutes 69.3 points.
“Economies in Europe and Central Asia have consistently led the world in the pace of regulatory reform,” said Rita Ramalho, Doing Business report lead author, World Bank Group. “Governments’ commitment to improving the regulatory environment for entrepreneurs has allowed them to close the gap with the top performers in some areas. For example, the average time to register property in the region has fallen by 14 days since 2010, making the process faster than in OECD high-income economies.”
The report finds that Tajikistan made the biggest improvement worldwide in business regulations in 2013/14. Tajikistan improved access to credit information by initiating credit scores, streamlined the process for starting a business, made dealing with construction permits less costly, and introduced an electronic system for paying corporate taxes. Azerbaijan is also among the 10 top improvers worldwide, thanks to reforms in starting a business, registering property, and paying taxes.
As the regulatory framework for entrepreneurs continues to improve, challenges persist across the region’s economies, emphasizing the need for further regulatory reforms. This is particularly so in such areas as construction permitting, getting electricity, and trading across borders, all areas in which the region’s economies are in the bottom half of the global ranking on average.
This year, for the first time, Doing Business collected data for a second city in the 11 economies with a population of more than 100 million. In the Russian Federation, the report now analyzes business regulations in both Moscow and St. Petersburg. Differences between cities are common in indicators measuring the steps, time, and cost to complete regulatory transactions where local agencies play a larger role, finds the report.
The report this year expands the data for three of the 10 topics covered, and there are plans to do so for five more topics next year. In addition, the ease of doing business ranking is now based on the distance to frontier score. This measure shows how close each economy is to global best practices in business regulation. A higher score indicates a more efficient business environment and stronger legal institutions.
The report finds that Singapore tops the global ranking on the ease of doing business. Joining it on the list of the top 10 economies with the most business-friendly regulatory environments are New Zealand; Hong Kong SAR, China; Denmark; the Republic of Korea; Norway; the United States; the United Kingdom; Finland; and Australia.
World Bank Group