Singapore, which is in the running to be the world’s fastest-growing economy this year, is the nation with the most business-friendly regulation, according to a World Bank report.
The city-state, where a company can be started in three days and where some women are taxed less on their personal income than men, topped the bank’s “Doing Business” report for the fifth year in a row, followed by Hong Kong, New Zealand and the U.K., with the U.S. in fifth place. The study also showed that East Asia and Pacific nations such as Vietnam were among countries that took the most steps to make it easier for local companies to operate.
The International Monetary Fund expects growth in Singapore to reach 15 percent this year, trailing only Qatar by 1 percentage point, as its services industry continues to expand even as overseas demand for manufactured goods weakens. The government has said it will introduce additional tax incentives for industries including legal services, finance, shipbroking and maritime financing.
Singaporean authorities “have been one of the most aggressive adopters of IT to post all of their business processes on line” Neil Gregory, one of the report’s authors, said on a conference call yesterday. The country is a “global leader” in that field and many developing countries have followed, putting imports and exports details online, he said.
Countries deemed the easiest to do business often have electronic procedures, as in the U.K. where commercial court filing can now be done online, according to the World Bank report.
The report, which helps private investors decide where to direct funds by looking at the ease of doing business for domestic companies of small and medium size, showed some emerging economies losing ground, with Brazil slipping to 127 from 124 and Russia sinking to 123 from 116.
China, which was 79 this year versus 78 a year ago, is still among the countries that have improved the most over the past five years, Gregory said.
The world’s second-largest economy introduced 14 policy changes, such as the introduction of a credit registry that now has 64 percent of adults covered, according to the report.
Of the 183 countries in the report, Chad was in last place. The Central African Republic was next and Burundi was third to the last. Afghanistan slipped to 167, from 165, and Iraq was just above Afghanistan.
East Asia and Pacific nations were for the first time in the report’s eight-year history among the most “active” in taking business-friendly measures, according to the report.
“Emerging-market economies such as Indonesia, Malaysia and Vietnam took the lead, easing start-up, permitting and property registration for small and medium-size firms and improving credit information sharing,” it said.
The report rates countries on rules that affect starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. It reviews regulations on employing workers and the availability of reliable electricity connections, though they are not criteria for the ranking.
At the same time, the report leaves out criteria such as macroeconomic stability, corruption and regulations specific to foreign investment.