Doing Business 2008 is the fifth in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 178 economies—from Afghanistan to Zimbabwe—and over time.

Regulations affecting 10 stages of a business’s life are measured: starting a business, dealing with licenses, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2008 are current as of June 1, 2007. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why.

The Doing Business methodology has limitations. Other areas important to business—such as a country’s proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions—are not studied directly by Doing Business. To make the data comparable across countries, the indicators refer to a specific type of business—generally a limited liability company operating in the largest business city.

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© 2007 The International Bank for Reconstruction and Development / The World Bank

Overview:

This year Eastern Europe and the former Soviet Union surpassed East Asia in the ease of doing business (figure 1.1). Several of the region’s countries have gone even further, surpassing many Western European economies. Estonia, the most business friendly of the former socialist bloc, ranks 17 on the ease of doing business. Georgia and Latvia are also in the top 25.

The result is a boom in new businesses. Georgia now has 15 registered businesses per 100 people (same as Malaysia). The Czech Republic and Slovakia have 13 (same as Singapore). Estonia and Poland have 12 (same as Hong Kong, China). Some of these new businesses have become global leaders in their field—for example, the Estonian-born software company Skype and the Czech carmaker Škoda.

As in previous years, Eastern European countries dominate the list of top reformers in 2006/07, with Croatia, FYR Macedonia, Georgia and Bulgaria reforming the most. Croatia is a top reformer for the second year running, Georgia for the third.

Many others are reforming too. Two hundred reforms —in 98 economies—were introduced between April 2006 and June 2007. Reformers simplified business regulations, strengthened property rights, eased tax burdens, increased access to credit and reduced the cost of exporting and importing.

Across regions, Eastern Europe and Central Asia reformed the most, followed by South Asia and rich countries (figure 1.2). Latin America reformed the least. The pickup in South Asia was led by India, which rose 12 ranks on the ease of doing business. The slowdown in Latin America could be a result of a busy election year: 13 countries saw new governments sworn in. Earlier analysis suggests that the region might experience a reform boom next year, as nearly 85% of reforms take place in the first 15 months of a new government.

Egypt is the top reformer for 2006/07, improving in 5 of the 10 areas studied by Doing Business (table 1.1). Egypt’s reforms went deep. They made starting a business easier, slashing the minimum capital requirement from 50,000 Egyptian pounds to 1,000 and halving start-up time and cost. Fees for registering property were reduced from 3% of the property value to a low fixed fee. With more properties registered and less evasion, revenue from title registrations jumped by 39% in the 6 months after the reform. New one-stop shops were launched for traders at the ports, cutting the time to import by 7 days and the time to export by 5. The first private credit bureau was established. And builders now face less bureaucracy in getting construction permits.

Croatia is the runner-up, with reforms in 4 of the Doing Business areas. Two years ago registering a property in Croatia took 956 days. Now it takes 174. Croatia also sped company start-up, consolidating procedures at the one-stop shop and allowing pension and health services registration online. Two procedures and 5 days were cut from the process. Credit became easier to access: a new credit bureau got off the ground, and a unified registry now records all charges against movable property in one place. In the first 2 months €1.4 billion of credit was registered. Finally, amendments to the Croatian insolvency law introduced professional requirements for bankruptcy trustees and shortened timelines. ...

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"In publishing Doing Business, the World Bank is producing a public good: measurements of regulatory performance that may become as indispensable to reformers and to academics as national income accounts." --Financial Times, September 6, 2006

 "A helpful exercise in quantifying business regulations and their costs." --The Economist - September 15, 2005

"a fascinating ranking of how easy it is to do business in 155 countries of the world." --The New York Times - October 18, 2005

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