The objective of IFC Advisory Services' Regulatory Simplification program is to help improve a country’s business regulatory framework at the central, sub-national or municipal level through policy review and re-design, decreasing the levels of operational uncertainty for firms. Simplified and transparent regulatory procedures should stimulate private investment and reduce informality, supporting the productivity and growth potential of enterprises in the region.
With an aim to create a more investor-friendly business environment, the program presently focuses on improving the following areas of business regulation:
- Business registration
- Business licensing & inspections
- Construction permits
- Land-related administrative barriers
- Local operating permits and licenses
- Tax administration
Regulatory Simplification projects are currently ongoing in five countries:
- Algeria: Business Start-Up Simplification
- Egypt: Business Start-up simplification phase II
- Jordan: Inspection and Licensing Reform
- Lebanon: Business Registration Simplification
- Yemen: Business Start-Up Simplification
- Morocco: Business Registration Simplification
In addition, the program has been conducting studies and collecting lessons learned from projects' implementation in the areas of construction permits and business simplification.
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What Does the Program Offer?
- Mapping, evaluating, and re-designing regulatory procedures and practices
- Developing reform partnerships between the private and public sector
- Training civil servants in regulatory agencies
- Networking with best-practice partners from developing and developed countries
Expected Outcomes and Impact
- Reducing the cost and time of specific regulatory functions imposed on private businesses, while enhancing the regulatory oversight of the public sector is at the heart of this program. Targeted policy reforms aim to re-design laws, regulations, and administrative practices so as to reduce bureaucratic complexities, excessive discretion and corruption within respective regulatory authorities.
- In terms of developmental impact, formalizing existing businesses and stimulating more private investment should translate into better growth performance and enhance job and income creation by private businesses.
Key Achievements
From IFC Advisory Services inception to the end of December 2007, the program has been successful at:
- Reaching out to 630 organizations through seminars, workshops and consultations
- Producing 74 reform recommendations, out of which five were implemented in Egypt and Lebanon
- Eliminating 32 administrative procedures, of which 27 in Egypt and 5 in Lebanon, namely:
In Egypt:
Reduction in days:
- Business Registration from 35 to 23
- Industrial License from 45 to 26
- Building Permit from 195 to 141
Reduction in procedures:
- Business Registration from 30 to 21
- Industrial License from 18 to 12
- Building Permit from 43 to 31
Reduction in cost:
- Business Registration from 14,487 to 10,837 Egyptian pounds
- Industrial License from 3,305 to 2,415 Egyptian pounds
In Lebanon:
- Reduction in days from 15 to 5
- Reduction in procedures from 12 to 7
- Reduction in cost from $3500 to $1500
Eligible Partners & Clients
Our main clients are government authorities, but we also partner with business associations and private sector representatives in the course of these reform projects. We design interventions based on the needs identified by the country and supported by the analytical research of the World Bank Group, other donor agencies, or think tanks. We encourage donor collaboration to maximize the positive impact of interventions.
We usually follow a three-step approach to developing projects:
- Mapping and benchmarking of procedures
- Process evaluation and re-engineering
- Implementation of the required changes with relevant ministries and agencies
Examples of Projects
Egypt: Committed to reducing bureaucratic constraints of businesses, the government of Egypt is endorsing reforms at all levels. Starting in early 2006, the Governorate of Alexandria has been working closely with the General Authority for Investment and Free Zones (GAFI) to develop a streamlined business registration procedure and upgrade an Investment Services One-Stop-Shop in the north of Egypt. IFC Advisory Services has been supporting this process by helping to restructure business start-up procedures, increasing the efficiency and outreach of the one-stop shop. Overall, the project reduced the time and number of procedures for business start-ups by 30 percent on average. The national authorities involved in this project such as IDA, the Ministry of Housing and GAFI have asked IFC to support them in the national roll out of these first stage reforms.
Jordan: IFC Advisory Services supports the government of Jordan’s ongoing reform efforts to streamline and improve the inspections and licensing processes in the country. In collaboration with the Ministry of Industry and Trade, IFC is introducing a set of horizontal inspection reforms across all ministries and providing specialized advisory services to selected pilot ministries, including the Ministry of Labor and the Ministry of Environment. The project works directly with the industry through a corporate social responsibility initiative in the Qualified Industrial Zones, which is jointly managed with the World Bank Group’s Foreign Investment Advisory Services. Present achievements include the completion of a full process mapping of inspection procedures in Jordan and a new strategy for inspections services under the Ministry of Labor. A guidebook on labor inspections is currently under development.
Lebanon: For most entrepreneurs, starting a new business in Lebanon has been a challenging and daunting task. This is mainly due to the lack of publicly available information and to the excessive cost, time, and number of steps or procedures. The business registration simplification project, initiated in late March 2006, in cooperation with the Ministry of Economy, quickly gained momentum before it was put on hold by the conflict that broke out in Lebanon during the summer of 2006. The project restarted in February 2007 and was successfully completed a year later. As a result of the project, a new business registration process, not requiring any changes to the existing laws, became effective in March 2008. The business registration process is now simpler, cheaper and more transparent. It is estimated that the overall time, cost and complexity of the registration process is reduced by an average of 50 percent. Further improvements are expected as soon as the Lebanese Parliament approves the recommended legal changes proposed by the IFC team. The suggested amendments will remove the capital requirement and the mandatory use of a notary public, legal counsel, and auditor.
For additional information contact:
Thomas Moullier
Program Manager
E-mail:
tmoullier@ifc.org
Doing Business Better