Where best to base your business
By Nick Easen for CNN
Slovakia has improved enough for Kia a Hyundai Motor subsidiary to build a multi-million dollar factory there.
|TOP TEN REFORMING COUNTRIES|
Source: World Bank
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(CNN) -- If you are looking for a place to start a new business you may want to consider either Slovakia or Colombia for a new office.
Both countries improved their business and investment climates the most over the past year, according to the latest World Bank report.
Creating electronic one-stop shops for businesses, shrinking regulatory delays, improving credit registries and introducing more flexible labor laws were just some of the reforms these countries signed up to.
"Slovakia was a successful reformer, as was Colombia (even though) they have a low per-capita income," Joe O'Keefe an economist at the World Bank told CNN.
"Many of these reforms are simple and not expensive. But in Haiti or Indonesia you can start a business in January and you might not even finish (registering) until June."
Business regulation may not seem like a big deal, but according to the "Doing Business in 2005" report Colombia's improvements in this area resulted in the creation of 350,000 jobs in 2003.
"The pay-offs from reform appear large," expressed the report.
"A move into the top quarter of countries in terms of doing business is associated with up to two percentage points more annual economic growth."
The global lender's second annual business regulation survey of 145 countries also found that New Zealand was the easiest country to open and manage a business, followed by the U.S.
The disparity between rich and poor countries is stark. For example an entrepreneur in a rich country will need on average 27 days to start a new business. In a poor to lower-middle income country the same process takes 59 days.
In a dozen countries starting up a business can drag on for more than 100 days.
Incentive for change
One major incentive to reform for a number of Central European countries was the promise of European Union membership.
Of the ten most-improved countries, three joined the EU in May of this year, including Slovakia, Lithuania and Poland.
The report also warned that countries which delay the introduction of reforms risk being left behind economically.
For instance many African countries are hampered by strict regulatory restrictions, while other states make starting a business a very costly process.
"In Syria, the minimum capitalization to start a business is 50 times the (annual) per capita income," says O'Keefe.
The report takes into account time needed to start a new business, labor laws, bureaucracy and credit registries.
According to the report, the most problematic places to do businesses are in Africa. Angola, Democratic Republic of Congo, Burkina Faso and Chad rank in the last five.
"We have not had this kind of comparable data before," explains O'Keefe.
The top 20 countries in terms of ease of doing business are New Zealand, United States, Singapore, Hong Kong/China, Australia, Norway, United Kingdom, Canada, Sweden, Japan, Switzerland, Denmark, Netherlands, Finland, Ireland, Belgium, Lithuania, Slovakia, Botswana, and Thailand.