DOING BUSINESS IN ZANZIBAR 2010

1. DOING BUSINESS IN ZANZIBAR 2010 Peter Ladegaard Regional Program Manager Investment Climate Advisory Services in East and Southern Africa Zanzibar Town March 22, 2011

2. Doing Business compares business regulation in 183 economies • Launched 8 years ago • Focuses on regulations relevant to the life cycle of a small to medium-sized domestic business based on a standardized case • Does not measure all aspects of the business environment • The objective: efficient regulations, accessible to all, and simple to implement

3. What Subnational Doing Business adds • Expands the DB indicators beyond the most populous city • Captures local differences in regulations or enforcement • Includes rules and regulations at all levels of government • Gives specific locations an opportunity to tell their story • Provides a tool for locations to compete globally • Provides information on good practices within the same country that can be easily replicated • Combines media appeal of DB with active participation of subnational governments in the reform process

4. Where do we work? Countries: 43 Cities: 339

5. Doing Business in Zanzibar 2011 • Creates a baseline for Zanzibar • Covers 9 indicators: • Starting a business • Dealing with construction permits • Registering property • Getting credit • Protecting investors • Paying taxes • Trading across borders • Enforcing contracts • Closing a business • Includes global comparisons and reform recommendations

6. Zanzibar’s global ranking varies by topic

7. Starting a business could be simplified 72% 28 days Post-incorporation procedures take up 80% of the time

8. Dealing with construction permits—time, cost and procedures 65 days Obtaining a building permit and connecting to electricity are the biggest bottlenecks

9. Registering property is costly It costs 20.2% of property value to register and transfer property in Zanzibar

10. Getting credit—no coverage of information due to lack of a credit bureau

11. Protecting investors—minority shareholder rights ►New company law in Rwanda strengthens investor protection

12. Paying taxes—time, number of payments and total tax rate

13. Trading across borders—preparing and obtaining documents lengthy 29 days to import US$ 1,192 per container 22 days to export US$ 844 per container

14. Enforcing contracts—Zanzibar ranks 2nd among 35 small island economies

15. Closing a business—no practice Formal bankruptcy procedures are rarely or never used in Zanzibar Only a few cases of winding ups since 2002 Doing Business methodology—at least 5 cases a year within the last 5 years Zanzibar is classified as a “no practice” economy

16. Why business regulation reform matters • Easier business entry means more new firms: evidence from empirical research Mexico • Impact of the reduction of registration procedures through the introduction of One-Stop Shops and the elimination of federally required procedures • Increase in the number of new firms of about 6% • Increase in employment by 2.6% • Consumer Price Index decrease by 1% due to competitive pressures of new entrants Colombia • Impact of the introduction of One-Stop Shops in 6 cities: • Increase of 5.2% in the number of new firms India • Impact of the elimination of License Raj in 16 states over 64 industries: • Increase in the number of new firms by 6%

17. Thank you or more information visit: http://www.doingbusiness.org/Zanzibar http://www.doingbusiness.org/subnational