WORLD BANK RANKS KAZAKHSTAN FASTEST IN IMPROVING BUSINESS REGULATIONS
Astana, November 6: Kazakhstan has improved business regulation the most among world’s economies in the past year, according to the eighth annual World Bank report, Doing Business 2011: Making a Difference for Entrepreneurs, released on November 4.
Kazakhstan improved conditions for starting a business and refined construction, investor protection, and trade regulations. As a result, it moved up 15 places in the rankings on the ease of doing business, to 59 among 183 countries surveyed.
According to the report, Kazakhstan is among 10 countries recognized as economies that made the largest strides in making their regulatory environment more favourable to business and in the top 10 Doing Business reformers over the last 5 years.
By using data collected from June 2009 to May 2010, the report ranked countries based on nine areas: the ease of starting a business, paying taxes, trading across borders, registering property, dealing with construction permits, getting credit, closing a business, enforcing contracts and protecting investors.
Kazakhstan has excelled in business start-up regulations. It has created entrepreneurship-friendly environment by reducing the minimum capital requirement to 100 tenge (US $ 0.70). To make business start-up process easier, it has eliminated registration formalities such as the need to have the memorandum of association and company charter notarized. By merging tax registration with company registration, Kazakhstan has freed entrepreneurs from having to visit separate agencies involved in business start-up.
Moreover, Kazakhstan has made dealing with construction permits easier by introducing several new building regulations in 2009. Less cumbersome process of getting construction permits, which, according to the report, is conducive for entrepreneurship, was achieved in Kazakhstan through streamlining procedures, implementing a new one-stop shop for construction-related formalities, and introducing risk-based approvals. Overall, Kazakhstan has reduced time for processing permit applications.
As for strengthening investor protection, Kazakhstan was able to achieve it by increasing the legal requirements for disclosure in related-party transactions.
In July 2009, Kazakhstan adopted amendments to the Joint Stock Company Law and the Law on Accounting and Financial Reports, which require greater corporate disclosure in company annual reports. This has significantly enhanced investor protection in the country.
Kazakhstan was elevated to the 59th position thanks to the reforms it adopted to ease trading across borders, which is increasingly important for business in a globalized world.
Kazakhstan speeded up trade by modernizing customs information system and improving risk-based systems. The country has also made cross-border trade less cumbersome by eliminating several trade-related documents. Other documents such as the bill of landing can now be submitted online, and customs declaration can be sent in before the cargo arrives, as the report notes. As a result of introducing modernized risk management and inspection systems, the time to export and import fell by 8 and 9 days respectively in Kazakhstan.
More than 50 respondents were interviewed in Kazakhstan in the World Bank research.
In addition to Kazakhstan, this year’s list of the 10 most-improved economies also includes Rwanda, Peru, Vietnam, Cape Verde, Tajikistan, Zambia, Hungary, Grenada, and Brunei Darussalam.
Singapore was recognized for the fifth year running as the world’s easiest place to do business. It was followed by Hong Kong, New Zealand, Britain, United States, Denmark, and Canada.
Doing Business 2011: Making a Difference for Entrepreneurs is the eighth in a series of annual reports published by International Finance Corporation and the World Bank. The Doing Business project looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. The first report was published in 2003.