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Starting a business in Madagascar

Starting a business in Madagascar. Indonesia Sylvia Solf Justin Yap 7 November 2007. Doing Business Indicators. 178 Countries. Doing Business basic methodology: Time and motion study. Starting a business in Indonesia. 90%. 120. 80%. Cost (right axis). 100. 70%. 60%. 80.

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Starting a business in Madagascar

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  1. Starting a business in Madagascar Indonesia Sylvia Solf Justin Yap 7 November 2007

  2. Doing Business Indicators 178 Countries

  3. Doing Business basic methodology: Time and motion study Starting a business in Indonesia 90% 120 80% Cost (right axis) 100 70% 60% 80 Time (number of days) Cost (% of GNI per capita) 50% 60 40% 40 30% Time (left axis) 20% 20 10% 0 0% 11 12 1 2 3 4 5 6 7 8 9 10 List of procedures 1. Obtain the standard form of the company deed 2. Notarize deeds 3. Certificate of domicile 4. Obtain NWPW number (taxes) 5. Deposit capital in a bank 6. Pay registration fee at Treasury 7. Register at Ministry of Justice 8. Register with the Company Register 9. Apply for publication 10. Apply for trade license 11. Registration of manpower 12. Social security

  4. Tracking reform: Easier property transfer in Ghana Time reduced from 169 to 34 days 180 160 140 2006 120 100 Procedure eliminated: Registration of deed and land commission Time (days) 80 60 40 2007 20 0 Preparation of the transfer document Assessment and payment of stamp duty Submit application for Title Certificate Publication of transaction Issuance of Title Certificate Procedures

  5. Top 30 on the Ease of Doing Business —2007

  6. Top Reformers in 2006-07

  7. Eastern European and OECD countries reform steadily Countries with at least one positive reform in 2006-7 (%) E. Europe + Central Asia 78.6% OECD 62.5% 58.8% Middle East + N. Africa 45.8% 35.5% 62.5% South Asia East Asia+ Pacific Latin America+ Caribbean 52.2% Sub-Saharan Africa

  8. Eastern Europe surpasses East Asia on the ease of doing business Average rank, ease of doing business South Asia Sub Saharan Africa Middle East & North Africa Latin America & Caribbean East Asia & Pacific Eastern Europe & Central Asia High income OECD

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

  10. How Indonesia ranks in each indicator

  11. Ease of trading across borders in Indonesia compared to region

  12. Indonesia’s reforms improved ease of doingbusiness in 3 areas

  13. Shorter licensing times Time to obtain a building permit  cut by more than half New regulation specifically revoked provisions on time period to complete building permits and special permits/building statement 28 Days Before reform: 49 days After reform: 21 days

  14. Easier access to credit China France Georgia Honduras India Indonesia Kenya Kuwait Pakistan Saudi Arabia Trinidad and Tobago Tunisia West Bank and Gaza Minimum loan amount lowered in the public credit registry lowered from 50 million rupiah to ZERO Countries that expanded scope of information covered by credit registries or bureaus

  15. Stronger investor protections Indonesia deepened corporate disclosure requirements 10 9 8.67 9 8 Hong Kong 5.67 5 3 Indonesia Disclosure Index Director Liability Index Shareholder Suits Index Total Investor Protection Index

  16. Opportunities for reform: simplifying business start-up Time and cost to start a business Cost as % of GNI per capita Time in days Indonesia Regional average OECD average

  17. Reducing cost to transfer property Cost to register property (% of value)

  18. How to jump 41 places by reforming in 3 areas • Starting a business (rank: 168) • Eliminate minimum capital requirement • Make notary involvment optional • Consolidate government approvals at one-stop shop • New global rank: 61 • Registering property (rank: 121) • Introduce low flat registration fee • New global rank: 52 • Getting credit (rank: 68) • Grant borrowers access to their credit information • Collect and distribute information from retailers, trade creditors & utilities • New global rank: 42 • Indonesia’s New Overall Rank: 82

  19. Why does it matter? Business Friendly Regulation Leads toMore Registered Businesses and Start-ups Business Density (registered firms per capita) Business Entry (new firms in % of registered firms) Most difficult Most difficult Easiest Easiest Countries ranked by ease of doing business, quintiles Source: Doing Business database

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

  21. More Reforms, Higher Equity Returns 3-year Shareholder Returns 90% 80% Egypt 70% Colombia 60% Brazil 50% Poland 40% India 30% Sri Lanka 20% 10% Venezuela 0% -6 -4 -2 0 2 4 6 8 10 12 Number of reforms, 2003-06

  22. Thank you For more information, please visit www.doingbusiness.org

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