KEY POINTS:
New Zealand is the second easiest country in the world in which to do business and is not far off reclaiming the top spot, the World Bank says.
Singapore is No 1 in the bank's survey again this year but there is little between the two countries.
New Zealand outdoes Singapore in the cost of setting up a business and ease of dealing with business licences and minority investors are judged to have better protection in New Zealand.
But World Bank representative Justin Yap said it took 10 days longer to set up a company in New Zealand than it did in Singapore because registering for tax here still includes a print-and-post step, while in Singapore the process can be done completely online.
Two years ago, Singapore edged New Zealand from the top position after New Zealand introduced a process which increased the time it took new companies to get a construction licence. Australia, ranked 9th in the survey, does better than New Zealand in ease of getting credit/getting loans, but it is cheaper to set up a company in New Zealand.
The bank calculates it costs $60 to set up a limited liability company compared with A$400. Yap conceded that the survey was a general indication of business regulations, and measures only each country's biggest city. It does not measure a country's proximity or access to foreign markets, or the size of its own market.
Each year the bank surveys 5000-6000 lawyers in 178 countries, using a hypothetical case study where a limited liability company is set up in the biggest business city in each country. The bank's criteria focuses on 10 "indicators", for example, how easy it is to hire staff, how long it takes to register property, and the level of protection for investors or secured creditors when they apply for loans.
Payoff from reforms could be large, Yap said. Higher rankings in the ease of doing business are associated with economic growth, more jobs, and more registered businesses.
The survey revealed a growing trend of reforms in developing countries, Yap said. While it was still easier to do business in western Europe than in Eastern Europe, aggressive post-communist reforms by a number of Eastern European countries such as Latvia and Estonia had pushed a number of them up the list over the last 20 years. Eastern Europe as a region this year surpassed the East Asia-Pacific region (not including New Zealand).
The survey was a way for developing countries to measure themselves against their neighbours in terms of business processes and reforms, Yap said.
"It makes information available so countries can see what their neighbours are doing, and hopefully spur healthy competition. If you see that your neighbour is 88 and you're 110 you have to start wondering why. [The survey] serves as a starting point to think about reform."
MAKING IT EASY
Easiest countries to do business in, according to the World Bank.
1. Singapore
2. New Zealand
3. US
4. Hong Kong/China
5. Denmark
6. UK
7. Canada
8. Ireland
9. Australia
10. Iceland
