Starting a business in Madagascar China Penelope J

Starting a business in Madagascar China Penelope J. Brook, Director, Indicators and Analysis Financial & Private Sector Development

Doing Business Indicators 2007 2008 2009 • Starting a business Add 3 countries • Dealing with licenses • Reformer’s Club: • Research program on regulation and business opportunities for women • Employing workers • Registering property • Getting credit • Protecting investors • Paying taxes • Trading across borders • Enforcing contracts • Closing a business • 11 case studies • Ongoing work on new indicators

Focus on Steps, Time and Cost is Doing Business Basic Methodology Starting a business in Mexico 8 procedures that take 27 days and 13. 3% of income 14% 30 Cost (right axis) 10% 20 8% 15 6% 10 4% Time (left axis) 5 2% 0% 0 Authorize company name Notarize company deeds & register for tax Register public commercial register Register with IMSS Register with federal tax authorities Notice of Register opening of at the SIEM mercantile establishment File a notice with INEGI Cost (% of GNI per capita) Time (number of days) 25 12%

Top 30 on the Ease of Doing Business — 2007 1. Singapore 16. Switzerland 2. New Zealand 17. Estonia 3. United States 18. Georgia 4. Hong Kong, China 19. Belgium 5. Denmark 20. Germany 6. United Kingdom 21. Netherlands 7. Canada 22. Latvia 8. Ireland 23. Saudi Arabia 9. Australia 24. Malaysia 10. Iceland 25. Austria 11. Norway 26. Lithuania 12. Japan 27. Mauritius 13. Finland 28. Puerto Rico 14. Sweden 29. Israel 15. Thailand 30. Korea

Top Reformers in 2006 -07 1. Egypt Starting a business Dealing with licenses 2. Croatia 3. 4. 5. 6. Ghana Macedonia Georgia Colombia FYR 8. Kenya 9. China 10. Bulgaria 7. Saudi Arabia Employing workers Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business

China and the Region Singapore 1 Hong Kong, China 4 Japan 12 Thailand 15 Malaysia 24 Korea 30 Brunei 78 China Vietnam Indonesia Philippines Cambodia Lao PDR Timor-Leste 83 91 123 133 145 164 168

China Highlights • A top 10 reformer globally for second year in a row in 2007 • #83 in ease of doing business, up by 9 places • Improved in 3 of the 10 indicators studied by Doing Business: • Dealing with licenses • Getting credit • Closing a business

China’s Overall Ranking: #83 Topic China’s Rank Top ranked Starting a business 135 Australia Dealing with licenses 175 St. Vincent & the Grenadines Employing workers 86 United States Registering property 29 New Zealand Getting credit 84 United Kingdom Protecting investors 83 New Zealand Paying taxes 168 Maldives Trading across borders 42 Singapore Enforcing contracts 20 Hong Kong, China Closing a business 57 Japan

More Reforms, Higher Equity Returns 90% 80% Egypt 70% Colombia 60% Brazil 50% Poland 40% India 30% China Sri Lanka 20% 10% Venezuela 0% -6 -4 -2 0 2 4 Number of reforms, 2003 -06 6 8 10 12

Business Friendly Regulation Leads to More Registered Businesses and Start-ups Business Density Business Entry (registered firms per capita) Easiest (new firms in % of registered firms) Most difficult Easiest Countries ranked by ease of doing business, quintiles Source: Doing Business database Most difficult

…Which Means More Formal Employment Informal Sector Unemployment (% of GDP) Easiest (% of labor force) Most difficult Easiest Countries ranked by ease of doing business, quintiles Source: Doing Business database, WDI Most difficult

Why Expand Doing Business to the Sub-National Level? • Extends Doing Business indicators beyond the most populous city • Actively involves local governments in the reform process Diagnostic tool • Creates baseline • Allows locations to compete locally and globally • Entry point in countries averse to international comparisons • Puts regulatory reform on political agenda Reform instrument • Comparisons within countries are strong drivers of reform • Uncovers bottlenecks and local good practices • Promotes peer to peer learning M&E instrument • Measures progress over time • Creates an incentive to maintain reform effort even when governments change

Subnational DB Uncovers Best Practices within a Country Global ranking DB 2008 Hypothetical city ranking 75 -136 9 134* 79* 76 52 27 -85* 14* 66 35 México 43* 33* Egypt 126 106 Morocco 129 113 83 67 Countries/Regions South East Europe India Pakistan OECS Colombia China *2007 data

To learn more about Doing Business http: //chinese. doingbusiness. org