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Doing Business in Poland. Marcin Pi ą tkowski Senior Economist. Warsaw, Poland November 4, 2010. 1. What does Doing Business measure?. Doing Business indicators: Focus on regulations relevant to the life cycle of a small to medium-sized domestic business.

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Doing Business in Poland


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slide1

Doing Business inPoland

MarcinPiątkowski

Senior Economist

Warsaw, Poland

November 4, 2010

1

slide2

What does Doing Business measure?

  • Doing Business indicators:
    • Focus on regulations relevant to the life cycle of a small to medium-sized domestic business.
    • Are built on standardized case scenarios.
    • Are measured for the most populous city in each country.
    • Are focused on the formal sector.
  • DO NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, or of regulation specific to foreign investment or financial markets.

2

slide3

Doing Business indicators – 11 areas of business regulation (9 included in the ranking)

Entry

Property rights

Investor protection

Access to credit

Administrative burden

Flexibility in hiring

Recovery rate

Reallocation of assets

3

percentage of countries with at least one positive reform in 2009 10
Percentage of countries with at least one positive reform in 2009/10

Strong global pace of improvements in regulations making business easier: 216 in 117 economies

84%

Eastern Europe and Central Asia

OECD high Income

61%

Middle East and North Africa

East Asia and Pacific

47%

South Asia

63%

59%

67%

75%

Latin America and Caribbean

Sub-Saharan Africa

6

poland improved by 3 positions from 73 in db10 as back calculated to 70 in db11 ranking
Poland improved by 3 positions from 73 in DB10 (as back-calculated) to 70 in DB11 ranking

Baltic states (average rank):

Estonia, Latvia, Lithuania

21

37

European Union (average rank): Austria, Belgium, Bulgaria, Cyprus, Czech republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, The Netherlands, Poland, Portugal, Romania, Slovak republic, Slovenia, Spain, Sweden, United Kingdom (excluding Malta)

70

Poland

7

slide8
Poland is among the EU economies that improved the most their business regulation over the past 5 years
poland s ranking relative to other economies in the european union
Poland’s ranking relative to other economies in the European Union

Easier to do business

More difficult to do business

in comparison to the european union 26 country average poland ranks lower in 7 out of 9 indicators
In comparison to the European Union 26 country average, Poland ranks lower in 7 out of 9 indicators

Highest

1

Lowest 183

10

the reform agenda
The reform agenda

Recommendations from the

World Bank’s

Reform Memorandum 2010

construction permits b uilding a warehouse is a lengthy and cumbersome process in poland
Construction permits - building a warehouse is a lengthy and cumbersome process in Poland

… and 32procedures

to build a warehouse

It takes over 10 months…

recommendations to improve the construction permitting process
Recommendations to improve theconstruction permitting process
  • Shorten and enforce statutory approval limits when processing construction and occupancy permits
  • Streamline procedures to issue construction permits using delegation and notification
  • Pro-actively use the risk-based approach when processing applications for construction and occupancy permits
  • Rationalize and consolidate post-completion inspections
  • Cautiously use “silence is consent” principle in construction
starting a business in poland is lengthy and costly
Starting a business in Poland is lengthy and costly

Cost to start a business (% GNI per capita)

Time to start a business (days)

recommendations to improve starting a business
Recommendations to improve starting a business
  • Short–term reform recommendations:
  • Unify all numbers into one universal identification number and issue it by the Registration Court; connect all public databases
  • Make available standard company agreements with the option of drafting and notarizing custom made company agreements, and empower officials to verify signatures
  • Eliminate separate registrations for National Sanitary Inspection and National Work Inspection; combineregistration for VAT at the National Court Register
  • Eliminate the minimum capital requirement
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In payingtaxes, numerous payments, complex

laws and procedures are main cause of low rank

Time to pay taxes (hours)

Number of tax payments per year

recommendations implementing electronic filing of returns
Recommendations: Implementing electronic filing of returns

Make electronic filing mandatory for all corporate entities and medium to large businesses (say, with turnover over Euro 1 million)

Digital signatures costly for small firms – make use of tax intermediaries legal

Simplify forms further, making them better suited to e-filing

Provide more user-friendly software

Popularize electronic filing through targeted communications campaigns

enforcing contracts and closing a business is lengthy
Enforcing contracts and closing a business is lengthy

Time to close a business (years)

Time to enforce a contract(days)

reforms to improve contract enforcement and closing a business
Reforms to improve contract enforcement and closing a business

Conduct a procedural mapping of internal processesat the commercial and insolvency courts; review courts around Poland and share best practices to improve efficiency

Introduce computerized case management system

Strengthen court management and improve measurement ofthe performance of courts andindividual judges

Reduce inflow of cases through out-of-court arbitration and workouts