Thursday, October 20, 2011

Doing Business 2012: South Asia and Nepal edition

The latest Doing Business 2012: Doing Business in a More Transparent World report lists Singapore as the top economy to do business, followed by Hong Kong SAR, China; New Zealand; the United States; and Denmark. The report ranks economies based on performance in ten indicators: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency. 

The report’s data cover regulations measured from June 2010 through May 2011 in 183 economies.This year rankings on ease of doing business have expanded to include indicators on getting electricity.The report finds that getting an electrical connection is most efficient in Iceland; Germany; Taiwan, China; Hong Kong SAR, China; and Singapore.

The Republic of Korea was a new entrant to the top 10. The 12 economies that have improved the ease of doing business the most across several areas of regulation as measured by the report are Morocco, Moldova, the former Yugoslav Republic of Macedonia, São Tomé and Príncipe, Latvia, Cape Verde, Sierra Leone, Burundi, the Solomon Islands, the Republic of Korea, Armenia, and Colombia. Two-thirds are low- or lower-middle-income economies.

The report shows that governments in 125 out of 183 economies implemented a total of 245 business regulatory reforms—13 percent more reforms than in the previous year. In Sub-Saharan Africa, a record 36 out of 46 economies improved business regulations this year. Over the past six years, 163 economies have made their regulatory environment more business-friendly. China, India, and the Russian Federation are among the 30 economies that improved the most over time.

South Asia

  • In South Asia, Maldives ranked 79, followed by Sri Lanka (89), Pakistan (105), Nepal (107), Bangladesh (122), India (132), Bhutan (142) and Afghanistan (160). The regional average (in rank) is 117.
  • Sri Lanka implemented the most reforms of any of the eight economies in South Asia, helping to create a better environment for entrepreneurs.
  • Sri Lanka rose nine places in the global ranking to 89, partly by strengthening investor protections and reducing taxes on business. India, the region’s second top performer in the global survey, climbed seven places to 132. Recently implemented mandatory electronic filing and payment for value-added tax made paying taxes easier for Indian firms.
  • Bhutan, rising four places to 142, recently launched a public credit registry and streamlined business start-up while Afghanistan, ranked 160, made it easier for local businesses to get an electrical connection.
  • Over the past six years, all eight economies in South Asia have made their regulatory environment more business-friendly.


In terms of ease of doing business, Nepal ranked 107 out of 183 countries. Last year, Nepal’s ranking was 110 (non adjusted figure was 116). It is quite an improvement in terms of easing doing business in the country. Most of the push is contributed by making property registration easy, by enacting measures to protect investors and by improving enforcement of contracts.The Finance Act 2008 has reduced the fee for transferring a property from 6 percent to 4.5 percent of the property’s value.In 2011 Nepal improved oversight and monitoring in the court, speeding up the process for filing claims. This is the only reform enacted in terms of easing procedures to do business this year.

Here is how Nepal compares with the regional average:

  • Best regional performance in registering property -- ranked 24 overall (regional average is 123). In Nepal, you need 3 procedures, takes 5 days and costs 5% of property value to get a property registered. The corresponding figures for the region are 6, 103, and 7.3.
  • In terms of protecting investors, Nepal’s performance in the region was the best -- ease of shareholder suits index (0-10) is 9 (regional average is 6).
  • In terms of enforcing contracts, Nepal’s performance was the best in the region -- 39 procedures to enforce a contract (regional average is 43)
  • Lowest regional performance in cost of starting a business -- 37.4 % of income per capita (regional average is 21.6% of income per capita)
  • In the ten indicators, ranking climbed up in four of them (when compared to previous year): dealing with construction permits, getting electricity, paying taxes, and resolving insolvency.
Doing Business 2012: Nepal
DB rank 2011 110  
DB rank 2012 107
Improvement in ranking (position) 3
Topic ranking
Topics DB 2012 Rank DB 2011 Rank Change in Rank
Starting a Business 100 95 -5
Dealing with Construction Permits 140 161 21
Getting Electricity 99 102 3
Registering Property 24 23 -1
Getting Credit 67 64 -3
Protecting Investors 79 74 -5
Paying Taxes 86 90 4
Trading Across Borders 162 161 -1
Enforcing Contracts 137 137 No change
Resolving Insolvency 112 113 1

[All Doing Business 2011 rankings have been recalculated to reflect changes to the methodology. For paying taxes, economies that have total tax rates below 32.5% in Doing Business 2012 are assigned a total tax rate of 32.5% for the purpose of calculating the rankings. For Doing Business 2011, the total tax rate is 32.7%.]