Doing Business 2009 in the Arab World Highlights Increased Regulatory Reform
In Cairo:
Riham Mustafa (+202 2) 4691 4230
E-mail: rmustafa@ifc.org
In Washington, D.C.:
Rebecca Ong
Phone: 1 (202) 458 0434 / Cell: 1(202) 651 1390
E-mail: rong@worldbank.org
Abu Dhabi, November 10, 2008–Doing
business is becoming easier in most parts of the Arab World, according
to Doing Business 2009 in the Arab World, a report that examines
the business regulatory environment of 20 Arab economies. Thirteen Arab
economies introduced 29 reforms between June 2007 and June 2008 in the
areas measured by Doing Business.
The report, based on the data from the global Doing Business survey
by the World Bank and IFC, compares the ease of operating a private business,
benchmarks regulations, and identifies reforms and global good practices.
It finds that over the past five years, the most popular Doing Business
reform in the Arab World has been in business start-ups, with 10 reforming
economies. Getting credit information was the second-most-popular reform,
followed by improvement in trade across borders. Multiple reforms also
took place in protecting investors, dealing with licenses, registry property,
paying taxes, and closing a business.
Dahlia Khalifa, a coauthor of the report, said: “Good rules that are efficient,
transparent, and accessible make it easier, especially for small and medium
enterprises, to do business in a fast-changing world. Otherwise, businesses
can be trapped in the unregulated, informal economy, where they have less
access to finance, hire fewer workers, and workers lack the protection
of labor law. Arab economies recognize this and are taking action to reform
their business regulatory environments.”
Initial results show that reforms lead to change on the ground. Six months
after Egypt reformed its property registry, title registrations increased
and related revenue rose by 39 percent. Commercial registrations in Oman
increased by 93 percent over the past year afterr Oman implemented a one-stop
shop for business start-ups. In Saudi Arabia, reducing minimum capital
requirements led to an 81 percent increase in new company registrations.
Dr Hazem El Beblawi, advisor to the Arab Monetary Fund, said: “This new
report offers Arab economies examples of reform and good practices from
the Arab world and other economies. Regulatory reforms make it easier for
local entrepreneurs to do business, and overall enhance business environments
and regional competitiveness.”
The report is co-sponsored by the Arab Monetary Fund, World Bank, and IFC.
It was launched today in Abu Dhabi at a conference hosted by the Arab Monetary
Fund with the objective of examining the business environment in the Arab
World. The Doing
Business 2009 in the Arab World report is available at www.doingbusiness.org/arabworld.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $16.2
billion in fiscal 2008, a 34 percent increase over the previous year. For
more information, visit www.ifc.org.
About Doing Business
The Doing Business project ranks 181 economies based on 10 indicators
of business regulation that record the time and cost to meet government
requirements in starting and operating a business, trading across borders,
paying taxes, and closing a business. The rankings do not reflect such
areas as macroeconomic policy, quality of infrastructure, currency volatility,
investor perceptions, or crime rates. For more information, visit www.doingbusiness.org.
Fact Sheet: Doing Business 2009 in the Arab World
In Algeria no major reforms
were recorded.
Rank in Doing Business 2009: 132
In Bahrain no major reforms were recorded.
Rank in Doing Business 2009: 18
In the Comoros no major reforms were recorded.
Rank in Doing Business 2009: 155
Djibouti improved its port
administration and reduced the number of documents required for exporting
and importing. That cut the time needed to import from 18 days to 16, the
documents needed to export from 8 to 5, and those needed to import from
6 to 5.
Areas of Reform: Trading Across Borders
Rank in Doing Business 2009: 153
Egypt made starting a business easier by reducing the paid-in minimum
capital requirement by more than 80%, abolishing bar association fees,
and automating tax registration. A new building code introduced in 2008
is aimed at reducing the procedures and time required to deal with construction
permits by establishing a single window for processing construction-related
approvals. Simplified administrative procedures for registering property
and new time limits have reduced the time to transfer property in Cairo
from 193 days to 72. The port of Alexandria continued to upgrade its facilities
and sped customs clearance, reducing the time to export by 1 day and the
time to import by 3. New listing rules for the Cairo Stock Exchange strengthened
protections for minority shareholders: now an independent body must assess
transactions between interested parties before they are approved. And thanks
to new regulations issued by the Central Bank of Egypt, borrowers have
the right to inspect their data in the private credit bureau.
Areas of Reform: Starting a Business, Dealing with Construction Permits,
Registering Property, Getting Credit (Information), Protecting Investors,
Trading across Borders
Rank in Doing Business 2009: 114
In Iraq no major reforms were recorded.
Rank in Doing Business 2009: 152
Jordan reduced the paid-in minimum capital requirement for starting
a business by 97%.
Areas of Reform: Starting a Business
Rank in Doing Business 2009: 101
In Kuwait no major reforms were recorded.
Rank in Doing Business 2009: 52
Lebanon streamlined business registration, reducing the time needed
to start a business from 46 days to 11 and eliminating 1 procedure.
Areas of Reform: Starting a Business
Rank in Doing Business 2009: 99
Mauritania simplified business
registration requirements, reducing the time, cost, and procedures for
start-up. Mauritania also introduced its first building code. This simplifies
the requirements for small construction projects and lays the groundwork
for a one-stop shop for construction permits.
Areas of Reform: Starting a Business, Dealing with Construction Permits
Rank in Doing Business 2009: 160
Morocco guaranteed the right
of borrowers to inspect data on their creditworthiness, increasing their
ability to control the accuracy of the information used by financial institutions
in assessing their risk profiles. Morocco reduced the corporate income
tax rate from 35% to 30%, effective 2008. And it simplified document requirements
for importing and exporting, reducing the time to import by 1 day.
Areas of Reform: Getting Credit (Information), Paying Taxes, Trading
across Borders
Rank in Doing Business 2009: 128
Oman’s one-stop shop at the Ministry of Commerce and Industry became
fully operational, reducing the number of business start-up procedures
by 3 procedures and time by 21 days.
Areas of Reform: Starting a Business
Rank in Doing Business 2009: 57
In Qatar no major reforms were recorded.
Rank in Doing Business 2009: 37
Saudi Arabia made it easier to start a business by continuing to simplify
formalities for commercial registration and reducing registration fees
by 80%. The time to start a business fell by 3 days. Saudi Arabia strengthened
protections for minority shareholders through new provisions that prohibit
interested parties from voting on the approval of related-party transactions
and increase sanctions against directors for misconduct. It sped the registration
of property with a comprehensive electronic system for registering title
deeds. And it was the only reformer in the region in the area of closing
a business this year. Its Ministry of Commerce introduced strict deadlines
for bankruptcy procedures. Auctions of debtors’ assets are expected to
take place more quickly than before.
Areas of Reform: Starting a Business, Registering Property, Protecting
Investors, Closing a Business
Rank in Doing Business 2009: 16
In Sudan no major reforms were recorded.
Rank in Doing Business 2009: 147
Syria introduced a new commercial code that simplified business start-up
by taking lawyers and the court out of the registration process. Reforms
at the tax directorate simplified tax registration for new businesses.
The entry of private banks in the Syrian market sped the issuance of letters
of credit lowering the overall time to import and export.
Areas of Reform: Starting a Business, Trading across Borders
Rank in Doing Business 2009: 137
Tunisia abolished the paid-in minimum capital requirement for limited
liability companies with the new the Law on Economic Initiative. The law
also allows minority investors to request a judge to rescind a prejudicial
related-party transaction. The Central Bank of Tunisia now collects and
distributes more detailed credit information from banks—both positive
information (such as loan amounts) and negative information (such as arrears
and defaults). And individuals and firms can check their credit data in
all Central Bank offices. The Ministry of Finance introduced a new option
for paying taxes—“téléliquidation.” Firms can file their tax returns
online and determine the exact amount of their payment before paying the
taxes at the tax office. A new requirement that freight arriving at the
port be accompanied by a unit of the customs authority has increased the
time to import by 1 day.
Areas of Reform: Starting a Business, Getting Credit (Information),
Protecting Investors, Paying Taxes, Trading across Borders (making it more
difficult)
Rank in Doing Business 2009: 73
The United Arab Emirate’s credit bureau, Emcredit, started collecting
information on the repayment pattern of individual borrowers as well as
firms in February 2007. This has allowed better supervision of the debt
level of banks and borrowers.
Areas of Reform: Getting Credit (Information)
Rank in Doing Business 2009: 46
West Bank and Gaza’s information
management system at the commercial registry became fully operational,
cutting the time to start a business by 43 days. The Central Bank has set
up an online system for lenders to access credit information. . Fees related
to construction permitting increased total cost by almost 20%.
Areas of Reform: Starting a Business, Getting Credit (Information),
Dealing with Construction Permits (making it more difficult)
Rank in Doing Business 2009: 131
Yemen introduced a one stop shop and cut the paid-in minimum capital
requirements. The new one-stop shop makes it possible to complete
business start-up at a single location and easier to obtain a license from
the municipality and to register with the chamber of commerce and the tax
office. This was one of the boldest reforms recorded in this year’s Doing
Business report, and resulted in an advance of 25 positions in the
global aggregate rankings for Yemen.
Areas of Reform: Starting a Business
Rank in Doing Business 2009: 98
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