Creating

More documents

Recommendations

Info

16 DOING BUSINESS IN 2006 In New Zealand a builder would have to complete 7 procedures requiring 65 days and $6,800—a third of the average annual income—to comply with all regulations. That excludes the time and cost of building. Inspections are contracted to private companies. The efficiency of regulatory and inspection services makes New Zealand the world’s easiest place to build a warehouse (table 3.1). In Denmark it takes 7 procedures, 70 days and $31,800, or three-quarters of the average annual income, making Denmark the third easiest place to build a warehouse. It is not only rich countries that achieve the right balance between safety and costs. Mauritius is among the easiest countries in which to build a warehouse (figure 3.1). And it has the same low rate of construction accidents as Hong Kong (China). Construction licenses are just one type of business license. Here they are used as the starting point for the discussion of licensing because construction is among the largest sectors in every economy. In OECD countries it accounts for nearly 10% of national income. Moreover, the rationale for such licensing is straightforward: well-built homes and offices save lives. Elsewhere, the rationale for licensing is not always clear. Why do hairdressers in Zambia need a license? Or laundromat owners in Botswana? Couriers in Tanzania? Licensing reform addresses these questions. Striking the right balance between ease of doing business and consumer safety requires continuous reform. In Australia new licensing regulations contain provisions that cause them to automatically expire after a certain period unless renewed by parliament. Sweden takes a “guillotine” approach to licensing reform, where hundreds of obsolete licenses are canceled after the government periodically requires regulators to register essential ones. Who is reforming? Poland was the most active reformer of business licensing in 2004, with the Freedom of Economic Activity Act repealing more than 600 licensing and permit requirements at the national and municipal levels (table 3.2). This reform had 2 goals: reducing the number of licensing regulations and requiring that any new ones be approved by parliament. For parliament to consider new licensing legislation, a cost-benefit analysis must be submitted. The new law also limits to 4 weeks the time that small businesses have to spend dealing with inspections, licensing requirements and permit renewals. This target will be achieved by placing time limits on the services of authorizing agencies. Poland’s example spurred reforms in Bulgaria and Georgia. In Bulgaria the new Law on Administrative Regulation replaced 1,500 previous pieces of legislation. It defines principles for introducing new licensing regimes and requires that they be accompanied by assessments of compliance costs. As in Poland, the law also sets time limits on processing of licensing requests. There is one weakness in Bulgaria’s law: it does not provide a TABLE 3.2 Main licensing reforms in 2004 Reform Cut the number of licensing regimes Simplifi ed licensing and inspections Introduced private inspections Established time limits on issuing licenses Adopted new building codes Source: Doing Business database. Country Bulgaria, Georgia, Poland Argentina, Canada, Netherlands Finland Bulgaria, Poland, Serbia and Montenegro Croatia, Vietnam “silence is consent” rule in most business licensing. This oversight has already caused problems with addressing delays in the issuance of licenses. Georgia’s Law on Issuance of Licenses and Permits reduces from 909 to 159 the types of activities subject to licensing. For example, the Ministry of Agriculture can issue only 2 types of licenses: for processing fish and producing baby food. Any activity not mentioned in the law does not need a license. Canadian construction companies used to com-
DEALING WITH LICENSES 17 plain that building requirements grew every time they met with municipal officials. It worked like this: Once a business received a site plan approval and a building permit, it hired a builder. The builder would then go to the municipality and receive a list of technical requirements. Once these were incorporated in the building plan, the builder would visit the municipality again—only to receive another list. And so on. There was no limit on how many changes could be required. That is no longer the case. Regulations issued in 2004 limit municipalities to a single list of requirements. Repeat visits are not necessary. It now takes less than 3 months to fulfill the requirements for building a warehouse in Toronto, putting Canada among the fastest places to complete the process (table 3.3). Finland introduced private inspections in 2004. Several types of inspections—such as for foundations, steelwork and electrical work—can be performed by builders as long as their employees have the required qualifications. If an electrical system malfunctions, the employee who inspected it bears personal responsibility, and his license will be revoked. Previously the building authority was responsible for inspections and had a staff of trained professionals. Because construction is seasonal, inspectors were stretched thin during the summer and fall but idle in the winter. That approach proved costly. Now inspection costs are borne by builders. But because their employees can both install and inspect, there is less idle time. And no days are lost in scheduling appointments and waiting for inspectors. A word of caution. Finland’s reform will not work in developing countries where revocation of professional licenses is not considered a significant penalty. And it will surely fail in countries where the courts are inefficient and corrupt. There, attempts to recover damages due to the negligence of private inspectors may face long delays and uncertainty about what judges will rule. In such countries reformers would do best to focus on strengthening the government inspectorate. Several other countries also improved construction licensing in 2004. The Netherlands made its rules on building materials more flexible by exempting several basic types, such as mud and soil, from testing. In addition, building permits now differ based on the size of the proposed construction, with small projects receiving less scrutiny. This reform alone saved the government $3 million in annual supervision costs. 4 Argentina unified the granting of fire safety certificates and the final inspecting of buildings. Serbia and Montenegro imposed a time limit for issuing building permits. It now takes fewer than 20 days to receive one. Croatia and Vietnam adopted new building laws. Croatia’s reform simplified procedures. Yet even after the reform, it takes 28 procedures, 278 days and 12 times the average income to comply with all the regulations for building a warehouse in Zagreb. Vietnam passed its first law on construction licensing, a compilation of existing decrees issued by the Ministry of Construction. Several duplicate procedures were abolished, making it possible TABLE 3.3 Who regulates licensing the least—and who the most? Procedures (number) Fewest Most Denmark 7 Guinea 29 New Zealand 7 China 30 Sweden 8 Egypt 30 Thailand 9 Czech Republic 31 France 10 Kazakhstan 32 Ireland 10 Taiwan, China 32 Germany 11 Turkey 32 Japan 11 Botswana 42 Kenya 11 Burkina Faso 46 Singapore 11 Sierra Leone 48 Time (days) Least Most Finland 56 Madagascar 356 Korea 60 China 363 New Zealand 65 Cameroon 444 Denmark 70 Brazil 460 United States 70 Nigeria 465 Canada 87 Bosnia and Herzegovina 476 Japan 87 Zimbabwe 481 Mongolia 96 Russia 528 Norway 97 Côte d’Ivoire 569 United Kingdom 115 Iran 668 Cost (% of income per capita) Least Most Australia 12.3 São Tomé and Príncipe 1,737 Czech Republic 16.1 Ethiopia 1,747 Mauritius 16.7 Serbia and Montenegro 2,195 Iceland 16.8 Niger 2,920 United States 16.9 Tanzania 4,110 Thailand 17.3 Mali 4,903 Lithuania 17.5 Burkina Faso 5,002 Slovakia 18.0 Congo, Dem. Rep. 6,516 Japan 19.7 Bosnia and Herzegovina 8,735 Belarus 22.7 Burundi 10,741 Source: Doing Business database.
Page 1: Creating Jobs
Page 5: Contents Doing Business in 2006: Cr
Page 8 and 9: 2 DOING BUSINESS IN 2006 to registe
Page 10 and 11: 4 DOING BUSINESS IN 2006 Less costl
Page 12 and 13: 6 DOING BUSINESS IN 2006
Page 15 and 16: 9 Starting a business Who is reform
Page 17 and 18: STARTING A BUSINESS 11 duced the mi
Page 19 and 20: STARTING A BUSINESS 13 Introduce st
Page 21: 15 Dealing with licenses Who is ref
Page 25 and 26: DEALING WITH LICENSES 19 Not in Sie
Page 27 and 28: 21 Hiring and firing workers Who is
Page 29 and 30: HIRING AND FIRING WORKERS 23 TABLE
Page 31 and 32: HIRING AND FIRING WORKERS 25 raised
Page 33 and 34: 27 Registering property Who is refo
Page 35 and 36: REGISTERING PROPERTY 29 In Latin Am
Page 37 and 38: REGISTERING PROPERTY 31
Page 39 and 40: 33 Getting credit Who is reforming?
Page 41 and 42: GETTING CREDIT 35
Page 43 and 44: GETTING CREDIT 37 But public regist
Page 45 and 46: 39 Protecting investors Who is refo
Page 47 and 48: PROTECTING INVESTORS 41 TABLE 7.2 I
Page 49 and 50: PROTECTING INVESTORS 43 TABLE 7.6 W
Page 51 and 52: 45 Paying taxes Who is reforming? W
Page 53 and 54: PAYING TAXES 47
Page 55 and 56: PAYING TAXES 49 What to reform? Tax
Page 57 and 58: PAYING TAXES 51 2004, despite the n
Page 59 and 60: 53 Trading across borders Who is re
Page 61 and 62: TRADING ACROSS BORDERS 55 Who is re
Page 63 and 64: TRADING ACROSS BORDERS 57 documents
Page 65: TRADING ACROSS BORDERS 59
Page 68 and 69: 62 DOING BUSINESS IN 2006 Who is re
Page 70 and 71: 64 DOING BUSINESS IN 2006 loans at
Page 73 and 74:
67 Closing a business Who is reform
Page 75 and 76:
CLOSING A BUSINESS 69 What to refor
Page 77:
CLOSING A BUSINESS 71 Such measures
Page 80 and 81:
74 DOING BUSINESS IN 2006 Working P
Page 82 and 83:
76 DOING BUSINESS IN 2006 Slovak St
Page 84 and 85:
78 DOING BUSINESS IN 2006 Economy c
Page 86 and 87:
80 DOING BUSINESS IN 2006 a procedu
Page 88 and 89:
82 DOING BUSINESS IN 2006 • Is 10
Page 90 and 91:
84 DOING BUSINESS IN 2006 Protectin
Page 92 and 93:
86 DOING BUSINESS IN 2006 Assumptio
Page 94 and 95:
88 DOING BUSINESS IN 2006 Assumptio
Page 97 and 98:
91 Ease of doing business: an appen
Page 99:
APPENDIX 93 countries all rank in t
Page 102 and 103:
96 DOING BUSINESS IN 2006 Starting
Page 104 and 105:
98 DOING BUSINESS IN 2006 Hiring an
Page 106 and 107:
100 DOING BUSINESS IN 2006 Hiring a
Page 108 and 109:
102 DOING BUSINESS IN 2006 Getting
Page 110 and 111:
104 DOING BUSINESS IN 2006 Paying T
Page 112 and 113:
106 DOING BUSINESS IN 2006 Paying T
Page 114 and 115:
108 DOING BUSINESS IN 2006 Enforcin
Page 116 and 117:
110 DOING BUSINESS IN 2006 AFGHANIS
Page 118 and 119:
112 DOING BUSINESS IN 2006 AUSTRALI
Page 120 and 121:
114 DOING BUSINESS IN 2006 BENIN Su
Page 122 and 123:
116 DOING BUSINESS IN 2006 BULGARIA
Page 124 and 125:
118 DOING BUSINESS IN 2006 CENTRAL
Page 126 and 127:
120 DOING BUSINESS IN 2006 CONGO, R
Page 128 and 129:
122 DOING BUSINESS IN 2006 DOMINICA
Page 130 and 131:
124 DOING BUSINESS IN 2006 ETHIOPIA
Page 132 and 133:
126 DOING BUSINESS IN 2006 GHANA Su
Page 134 and 135:
128 DOING BUSINESS IN 2006 HONDURAS
Page 136 and 137:
130 DOING BUSINESS IN 2006 IRAN Mid
Page 138 and 139:
132 DOING BUSINESS IN 2006 JAPAN OE
Page 140 and 141:
134 DOING BUSINESS IN 2006 KUWAIT M
Page 142 and 143:
136 DOING BUSINESS IN 2006 LITHUANI
Page 144 and 145:
138 DOING BUSINESS IN 2006 MALI Sub
Page 146 and 147:
140 DOING BUSINESS IN 2006 MOLDOVA
Page 148 and 149:
142 DOING BUSINESS IN 2006 NETHERLA
Page 150 and 151:
144 DOING BUSINESS IN 2006 OMAN Mid
Page 152 and 153:
146 DOING BUSINESS IN 2006 PERU Lat
Page 154 and 155:
148 DOING BUSINESS IN 2006 RUSSIA E
Page 156 and 157:
150 DOING BUSINESS IN 2006 SERBIA A
Page 158 and 159:
152 DOING BUSINESS IN 2006 SOUTH AF
Page 160 and 161:
154 DOING BUSINESS IN 2006 SYRIA Mi
Page 162 and 163:
156 DOING BUSINESS IN 2006 TONGA Ea
Page 164 and 165:
158 DOING BUSINESS IN 2006 UNITED K
Page 166 and 167:
160 DOING BUSINESS IN 2006 VIETNAM
Page 169 and 170:
163 Acknowledgments Contact details
Page 171 and 172:
ACKNOWLEDGMENTS 165 Tibor Fabian BI
Page 173 and 174:
ACKNOWLEDGMENTS 167 Barthélémy Ke
Page 175 and 176:
ACKNOWLEDGMENTS 169 Ghislane Moise
Page 177 and 178:
ACKNOWLEDGMENTS 171 Bernt Juthstrom
Page 179 and 180:
ACKNOWLEDGMENTS 173 Kari Hrafn Kjar
Page 181 and 182:
ACKNOWLEDGMENTS 175 Ivan A. Zaitsev
Page 183 and 184:
ACKNOWLEDGMENTS 177 Samuel Tembenu
Page 185 and 186:
ACKNOWLEDGMENTS 179 Russell Lawn BU
Page 187 and 188:
ACKNOWLEDGMENTS 181 Jazmin Banal RO
Page 189 and 190:
ACKNOWLEDGMENTS 183 Ivan Petrovic L
Page 191 and 192:
ACKNOWLEDGMENTS 185 Wen-Horng Kao P
Page 193 and 194:
ACKNOWLEDGMENTS 187 Katherine Stone
Page 196:
Doing Business in 2006: Creating Jo
show all

Creating

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?