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
