Best countries to start a business in 2019

The most business-friendly climates

The World Bank's yearly Doing Business report assessed 190 countries around the world on a range of areas like the ease of doing business, facilitation of procedures for obtaining building permits, registering businesses, as well as protection of investors, access to international markets, the strength of contracts, tax benefits, among others. Today, even though no country in the world has a completely efficient regulatory framework, many economies are showing much improvement. Nearly 60% of the top 50 are high-income OECD countries while 24% are found in Europe and Central Asia, and 12% in East Asia and Latin America.

As you might have expected, New Zealand, Singapore, Denmark, Hong Kong, and South Korea are in the top five thanks to their business-friendly environment and the number of benefits available for both local and foreign entrepreneurs and investors. On the other hand, this new ranking comes with a load of surprises, with countries like Georgia ahead of Norway, and even the USA and the UK. Macedonia is also in the top 10 thanks to recent reforms aimed at facilitating the delivering of new building permits. What most of these economies have in common include the efficient and quality regulatory frameworks, mandatory inspections during construction, and strong guarantees for creditors in insolvency proceedings.

The United Arab Emirate (11th), Sweden (12th), Taiwan (13th), Lithuania (14th), Malaysia (15th) and Estonia (16th), Finland (17th), Australia (18th), Latvia (19th), and Mauritius (20th) are other top countries to consider for starting a business. It worth noting that Mauritius is the only economy in sub-Saharan Africa making it in the top 20. During the past decade, the small island state brought about reforms aiming at reducing the duration of business incorporation and real estate registration procedures along with other business regulations and tax incentives.

The United Arab Emirates and Malaysia also make it in the top 20 for the first time due to a series of reforms. As one of the largest economies in the Middle East, the United Arab Emirates greatly benefits from its international openness. Common features shared by these economies are their level of income, flexible procedures, and an efficient legal framework. However, there are significant variations, between the high-income countries in particular. While New Zealand ranks 1st overall, for example, it is at the 21st spot for strong contracts. Also, Morocco ranks 60th overall but comes at the 25th spot for taxation benefits.

Major improvements

This year, Afghanistan, Djibouti, China, Azerbaijan, India, Togo, Kenya, Ivory Coast, Turkey and Rwanda are the biggest improvers in the Doing Business ranking. In recent years, there were 62 reforms in total in these ten countries, especially regarding obtaining credit and tax benefits. In Afghanistan, for example, new laws introduced in 2018 aim at addressing insolvency and mitigating the risks of conflict of interest in companies, and protecting minority investors. The Commercial Procedure Code was also amended so that shareholders have more powers to challenge related-party transactions.

China and India, two of the largest economies in Asia, can also boast of long-term reforms introduced during the past few years. For example, it's now easier for companies to obtain electricity in Beijing and Shanghai. Also, China recently launched a new application to facilitate online payments, so business people don't have to travel to Beijing to get things done. In early 2018, China set up measures aiming at standardising the issue of new building permits especially in Beijing and Shanghai, added to the facilitation of building registration procedures.

India made the ease of doing business part of its 2017-2020 action plan. Besides improving the efficiency of cross-border trade, India also reduced time and document compliance requirements for import and export. The country also made massive investments in port facilities and set up a single window to facilitate the obtaining of construction permits, especially in Mumbai and New Delhi. New regulations have also been introduced to ensure that new applications for electricity are processed and settled within 15 days maximum.

Following recent reforms, real estate transactions with Tax Authorities are now carried out online in Djibouti thanks to a digitalized land registry, within strict deadlines. The country has also adopted a new Civil Procedure Code governing mediation and conciliation aiming at settling commercial disputes more rapidly. A new division has also been created within the Court of First Instance to facilitate the execution of contracts. It's worth noting that Djibouti is the only economy in the Middle East and North Africa with the most significant improvements.

In general, most of these reforms come from low- and lower-middle-income economies, which may explain the dynamism of their business climates. Besides, Brazil shows the most significant improvements in Latin America for the past year. Following a pilot project initiated in October 2016, for example, the country introduced electronic certificates of origin in 2017. Brazil has also set up a new online system to facilitate business registration.