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September 28, 2019

Ease of doing business: WB counts Pakistan among top 20 performers

Top Story

September 28, 2019

ISLAMABAD: Pakistan is among top 20 improvers in Doing Business 2020 report that will be going to launched by World Bank (WB) next month.

World Bank (WB) Country Director for Pakistan, Illango Patchamuthu, said in a tweet, "We laud the collective action of Federal, Sindh, and Punjab governments for an impressive feat".

The ranking of the country will be known when the detailed report of Doing Business 2020 will be launched but it is positive development that Pakistan clinched position in top 20 improvers in the upcoming report. India and some Gulf states are also included in the list of top 20 improvers in the Doing Business report 2020.

On Pakistan, the World Bank’s site on Doing Business stated on Friday that Pakistan improved in six areas measured by Doing Business—starting a business, dealing with construction permits, getting electricity, registering property, paying taxes and trading across borders—reflecting the country’s development of an ambitious reform strategyincluding the establishment of national secretariat and Prime Minister’s reform steering committee. Pakistan made starting a business easier by expanding procedures available through the online one-stop shop. In addition to improvements in property registration, obtaining a construction permit became easier after the Sindh Building and Control Authority and the Lahore Development Authority streamlined approval workflows and improved the operational efficiency of their one-stop shops. The launching of online portals for new commercial connections made getting electricity easier, and tariff changes are announced in advance. Moreover, tax compliance became easier through online payment modules for value added tax and corporate income tax, and a lower corporate income tax rate. Pakistan made trading across borders easier by enhancing the integration of various agencies into an electronic system and by improving coordination of joint physical inspections at the port.

Jang reporter Rafiq Mangat quoting a German news agency said Pakistan was on number 61 in the list. In 2011, the country fell to number 107 while India was at number 132. In 2015, Pakistan was at number 110 and India 132. In 2015, Pakistan jumped to the top 30 countries on the list.

The world survey includes 189 or 190 countries. In 2019 report, Pakistan was on number 136, India 77, Bangladesh 176. In 2018 report, Pakistan was on number 147, India 100 and Bangladesh 177. The World Bank adopts a completed procedure to compile this report.

Azerbaijan made it easier to do business in four areas measured by Doing Business: registering property, getting credit, protecting minority investors and enforcing contracts. Registering property was made faster following the formal mapping and registration of every privately-held land plot in Baku, improving records and speeding up real estate procedures. Minority investor protections were strengthened after liability was imposed on directors for unfair related-party transactions. When commercial disputes arise, parties can now file summons online and receive financial incentives for pursuing mediation.

Bahrain implemented a comprehensive reform program, making it easier to do business in nine of the 10 areas included in the ease of doing business ranking (all but starting a business). As part of its Economic Vision 2030, Bahrain deployed new scanners at the King Fahd Causeway and established differentiated lanes for border crossing, introduced a new electronic system for property registration, adopted a new law on insolvency that gives the option of filing for reorganization and protections for secured creditors during an automatic stay in reorganization proceedings. Bahrain also introduced dedicated venues to resolve commercial disputes with electronic service of process.

Bangladesh made it easier for entrepreneurs to start a business, obtain an electrical connection and access credit. Among other initiatives, Bangladesh lowered the name clearance fee for new company registration, abolished digital certification fees and reduced registration fee calculations based on share capital. In Dhaka, the electricity supplier cut the security deposit for a new connection by half and undertook major investments to expand its staffing and digitization of processes; licensing times by the Office of Electrical Adviser and Chief Electrical Inspector were also reduced. Bangladesh’s credit information bureau improved access to credit by expanding its coverage to include five years of records and data on loans of any amount.

China implemented reforms in eight areas measured by Doing Business. In Beijing, obtaining the company seal is now fully integrated into the business registration one-stop shop. Authorities in Beijing and Shanghai simplified the process of obtaining a construction permit by exempting low-risk construction projects from certain reporting requirements. Customers can now apply online for new electricity connections, sign their supply contract electronically and learn about tariff changes at least one billing cycle in advance. Paying taxes became easier by implementing a preferential corporate income tax rate for small enterprises, reducing the value added tax rate for certain industries and enhancing the electronic filing and payment system. Exporting and importing is now easier thanks to advance cargo declaration, upgraded port infrastructure, optimized customs administration and the publishing of fee schedules. Meanwhile, the Supreme People’s Court (SPC) enhanced commercial litigation by limiting adjournments and publishing court performance measurement and progress reports. China strengthened minority investor protections by imposing liability on controlling shareholders for unfair transactions with interested parties and clarifying ownership and control structures. Lastly, the SPC enhanced priority rules for creditors who provide credit to insolvent businesses and increased access to information from the insolvency representative.

Djibouti passed important legislation this year amending its commercial code to strengthen access to credit. Authorities implemented a functional secured transactions system and a unified notice-based collateral registry. The amendments to the commercial code also strengthened minority investor protections and facilitated the commencement of proceedings as well as increased the effectiveness of court processes, reducing the time to resolve insolvency.

India made it easier to do business in four areas measured by Doing Business. Authorities in Mumbai and New Delhi made it easier to obtain construction permits by allowing the submission of labor inspector commencement and completion notifications through a single-window clearance system. Starting a business is less costly thanks to abolished filing fees for the SPICe company incorporation form, electronic memorandum of association and articles of association. Exporting and importing is also easier following the integration of several government agencies into an online system and the upgrading of port equipment and infrastructure. India’s achievements this year build on a sustained multi-year reform effort. Since 2003/04, India has implemented 48 reforms captured by Doing Business. The most improved business regulatory areas have been starting a business, dealing with construction permits and resolving insolvency.

Jordan improved in Doing Business 2020 in the areas of getting credit, paying taxes and resolving insolvency. Access to credit was expanded after the credit bureau began offering credit scores to banks and other financial institutions. Jordan also strengthened access to credit by introducing a new secured transactions law that regulates functional equivalents to loans secured with movable property, such as financial leases and fiduciary transfer of title. Jordan made paying taxes easier by integrating labor taxes and other mandatory contributions into its electronic payment system. Jordan also adopted a new insolvency law that permits the continuation of the debtor’s essential contracts during insolvency proceedings and allows the debtor to reject overly-burdensome contracts.

Kenya made regulatory changes concerning dealing with construction permits, getting electricity, getting credit, protecting minority investors, paying taxes and resolving insolvency. Kenya made dealing with construction permits more transparent by making building permit requirements publicly available online and by reducing fees. In Nairobi, the utility improved the reliability of its electricity grid by investing in substations, automatic air break switches and ring main units. Registering, modifying and canceling security interests held in Kenya’s collateral registry can now be done online. Paying taxes is also more streamlined now that employer-paid social security contribution payments and returns are filed electronically. Meanwhile, legislation in 2018 strengthened minority investor protections by giving shareholders the final say on the election and dismissal of the external auditor. Kenya made resolving insolvency easier by improving the continuation of the debtor’s business during insolvency proceedings.

Kosovo made it easier to do business in the areas of dealing with construction permits, getting electricity, protecting minority investors and enforcing contracts. To streamline its construction permitting process, the Municipality of Pristina eliminated the requirement to notify of the start of construction and receive a location inspection. Kosovo also improved the reliability of power supply by investing heavily in grid infrastructure and by implementing an automatic energy management system for outage monitoring and the restoration of service. Meanwhile, Kosovo passed a consolidated law on voluntary mediation that encompasses all aspects of mediation, including the enforceability of mediated settlement agreements. Kosovo also adopted a new Law on Business Organizations that gives shareholders broader access to company documents before filing a lawsuit.

Kuwait continued to use its New Kuwait Vision 2035 roadmap as a guide for economic and regulatory reform. The full integration of the Kuwait Business Center platform with the public authority for civil information made it easier for entrepreneurs to obtain a commercial license when starting a business. The process for getting a new electricity connection was simplified following the digitization of the application process, combined connection works and meter installations and a new geographic information system that streamlines the review of connection requests. Registering property transfers is also faster thanks to an online system launched by the municipality of Kuwait City and a one-stop shop launched by the Ministry of Justice. Kuwait improved access to credit information by guaranteeing borrowers the legal right to inspect their credit data and offering credit scores as a value-added service to banks and financial institutions. In addition, Kuwait amended its company law to help shareholders be better informed and more involved by increasing the minimum notice period for general meetings. Lastly, Kuwait made trading across borders easier by improving its customs risk management system and implementing a new electronic clearance system.

The Kyrgyz Republic improved in the areas of getting electricity, getting credit and paying taxes. The electricity utility improved the reliability of power supply by enhancing the monitoring of outages and modernizing its infrastructure to reduce power outages. ISHENIM, the credit bureau, began offering a consumer credit scoring system to banks and other financial institutions to inform their lending decisions. The Kyrgyz Republic made paying taxes easier by consolidating the tax on interest income into the corporate income tax and by introducing an online platform for filing and paying taxes.

Myanmar implemented five initiatives that enhanced its business environment. The city of Yangon strengthened construction quality control by imposing stricter qualification requirements for architects and engineers and invested in its water and sanitation infrastructure. Nationally, Myanmar launched an online company registry platform, thereby merging several procedures and reducing the need for in-person interaction. Myanmar also made property registration faster by streamlining deed registration and appraisal. In addition, Myanmar courts started publishing performance measurement reports, and a new company law strengthened minority investor protections by mandating greater disclosure of transactions with interested parties, increasing director liability and requiring greater corporate transparency.

Nigeria made starting a business easier by operationalizing a new electronic platform that integrates the tax authority and the Corporate Affairs Commission (CAC). The CAC also upgraded its name reservation platform and, in Kano, there is now an electronic platform for registering business premises online, eliminating the need to appear in person. In Lagos, land administration was made more transparent following the digitization of cadastral plans in a geographic information system; digital copies of cadastral plans are now easily obtainable. Nigeria also made getting electricity easier by allowing certified engineers to conduct inspections for new connections. Initiatives also made commercial litigation of smaller cases more efficient. The Chief Judges in Lagos and Kano issued practice directions for small claims courts introducing pre-trial conferences and limit adjournments. Finally, customs integrated more agencies into its electronic data interchange system, and port authorities launched an e-payment system, speeding up both exports and imports.

Qatar embarked on an ambitious program to modernize public services. Kahramaa, the water and electricity utility company, introduced a new process to receive and review applications through its online portal, reducing the time to obtain an electricity connection. The ministry of justice streamlined property registration procedures and improved the quality of its land administration system by publishing official service standards and court statistics on land disputes. Lastly, the credit bureau started reporting credit data from a telecommunications company.

Saudi Arabia improved in nine areas measured by Doing Business 2020, supported by reforms under its Vision 2030 plan. Saudi Arabia made starting a business easier by establishing a one-stop shop and eliminating the requirement for married women to provide additional documents when applying for a national identity card. It also adopted a new building code and launched an online platform for building permits. The Saudi Electricity Company put in place a geographic information system to simplify review of new electrical connection requests. Saudi Arabia strengthened access to credit by introducing new laws on secured transactions and insolvency. A ministerial decision strengthened minority investor protections by increasing access to evidence at trial. A Royal Decree, among other improvements, updated Saudi Arabia’s insolvency framework by introducing a reorganization procedure. Saudi Arabia also made importing easier by upgrading systems at the Jeddah Port.

Tajikistan made starting a business easier by integrating social protection registration into the company incorporation process. Tajikistan also strengthened access to credit by launching a unified, modern and notice-based collateral registry, broadening the scope of assets that can be used as collateral and granting secured creditors absolute priority. Moreover, customs authorities introduced several measures to prioritize and accelerate export customs clearance procedures for perishable goods.

Togo was active in overhauling business regulation across five areas measured by Doing Business. The elimination of a requirement that limited liability companies have their articles of association drafted by a notary made it easier to start a business. Transparency in the construction permitting process was improved after Togo issued a circular mandating that the required documents, pre-approval and fees be made available online. Getting electricity became less costly following a decision by the electricity company to reduce the cost of new connection works. The property transfer registration process was streamlined—the submission of land transfer documents and payment of the registration fee are now completed in one step at the same office. Togo improved access to credit information by expanding the coverage of the credit bureau, Creditinfo Volo, and beginning to distribute data from utility companies.

Uzbekistan made it easier to protect minority investors, pay taxes, enforce contracts and trade across borders. Amendments to the companies law strengthened minority investor protections by requiring independent board members and strengthening audit committees. The infrastructure tax was merged with the corporate income tax, a consolidated law on voluntary mediation established financial incentives when opting for mediation and customs began conducting risk-based inspections.

Zimbabwe made regulatory improvements in five areas measured by Doing Business. Zimbabwe made starting a business easier by improving online name search and reducing the Harare Municipality business licensing fee. More frequent sessions by the municipal building commission in Harare led to faster approval of construction permits. Likewise, the deeds registry implemented an internal tracking system allowing applicants to track their applications throughout the property transfer process. Finally, Zimbabwe introducing a new reorganization procedure, allowing creditors to vote on the reorganization plan, granting debtors the possibility of obtaining post-commencement finance and improving access to credit by giving secured creditors absolute priority during insolvency proceedings.

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