COMPARING REGULATION IN 20 ECONOMIES 65000 COMPARING REGULATION IN 20 ECONOMIES THE WORLD BANK In partnership with the Abu Dhabi Department of Economic Development, the Arab Monetary Fund and USAID ABU DHABI DEPARTMENT OF ECONOMIC DEVELOPMENT © 2009 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail feedback@worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A publication of the World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. 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Copies of the Doing Business global reports, Doing Business 2010: Reforming through Difficult Times, Doing Business 2009, Doing Business 2008, Doing Business 2007: How to Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth and Doing Business in 2004: Understanding Regulations, may be purchased at www.doingbusiness.org. Contents Doing Business in the Arab World 2010 Doing Business measures regulations is a regional report that draws on the affecting 10 stages of the life of a busi- global Doing Business project and its ness: starting a business, dealing with database as well as the findings of Doing construction permits, employing work- About Doing Business v Business 2010: Reforming through Dif- ers, registering property, getting credit, Overview 1 ficult Times, the seventh in a series of protecting investors, paying taxes, trad- annual reports investigating regulations ing across borders, enforcing contracts Doing Business topics 9 that enhance business activity and those and closing a business. The indicators Starting a business 10 that constrain it. are used to analyze economic outcomes Dealing with construction permits 13 Doing Business presents quantitative and identify what reforms have worked, Employing workers 17 indicators on business regulations and where and why. Doing Business does not Registering property 20 the protection of property rights that can directly study other areas important to be compared across 183 economies— business, such as an economy’s proxim- Getting credit 23 from Afghanistan to Zimbabwe—over ity to large markets, the quality of its Protecting investors 26 time. This report presents a summary of infrastructure services (other than those Paying taxes 29 Doing Business indicators for the Arab related to trading across borders), the Trading across borders 32 world. It focuses on 20 Arab economies: security of property from theft and loot- Enforcing contracts 36 Algeria, Bahrain, Comoros, Djibouti, the ing, the transparency of government pro- Arab Republic of Egypt, Iraq, Jordan, curement, macroeconomic conditions or Closing a business 39 Kuwait, Lebanon, Mauritania, Morocco, the underlying strength of institutions. Ease of doing business 42 Oman, Qatar, Saudi Arabia, Sudan, the For other limitations in the Doing Busi- References 43 Syrian Arab Republic, Tunisia, the United ness methodology, see the Doing Business Doing Business indicators 45 Arab Emirates, West Bank and Gaza and website (http://doingbusiness.org). Country tables 49 the Republic of Yemen. Data in Doing Business 2010 are cur- rent as of June 1, 2009. Acknowledgments 70 THE DOING BUSINESS WEBSITE studies and customized country and regional profiles Current features http://www.doingbusiness.org/downloads News on the Doing Business project http://www.doingbusiness.org Subnational and regional projects Differences in business regulations at the Rankings subnational and regional level How economies rank—from 1 to 183 http://www.doingbusiness.org/subnational http://www.doingbusiness.org/ economyrankings Law library Online collection of laws and regulations Reformers relating to business and gender issues Short summaries of DB2010 reforms, lists http://www.doingbusiness.org/lawlibrary of reformers since DB2004 and a ranking http://www.doingbusiness.org/ simulation tool genderlawlibrary http://www.doingbusiness.org/reformers Local partners Historical data More than 8,000 specialists in 183 economies Customized data sets since DB2004 who participate in Doing Business http://www.doingbusiness.org/customquery http://www.doingbusiness.org/LocalPartners Methodology and research Reformers’ Club The methodology and research papers Celebrating the top 10 Doing Business underlying Doing Business reformers http://www.doingbusiness.org/ http://www.reformersclub.org MethodologySurveys Business Planet Download reports Interactive map on the ease of doing business Access to Doing Business reports as well as http://www.doingbusiness.org/map subnational and regional reports, reform case v About Doing in redeploying resources, make it easier to stop doing things for which demand small and medium-size enterprises. A fundamental premise of Doing Business has weakened and to start doing new things. Clarification of property rights Business is that economic activity re- quires good rules. These include rules and strengthening of market infrastruc- that establish and clarify property rights ture (such as credit information and and reduce the costs of resolving disputes, collateral systems) can contribute to con- rules that increase the predictability of fidence as investors and entrepreneurs economic interactions and rules that look to rebuild. provide contractual partners with core Until very recently, however, there protections against abuse. The objective: were no globally available indicator sets regulations designed to be efficient, to be for monitoring such microeconomic fac- accessible to all who need to use them tors and analyzing their relevance. The and to be simple in their implementa- first efforts, in the 1980s, drew on per- tion. Accordingly, some Doing Business ceptions data from expert or business indicators give a higher score for more surveys. Such surveys are useful gauges regulation, such as stricter disclosure re- In 1664 William Petty, an adviser to of economic and policy conditions. But quirements in related-party transactions. England’s Charles II, compiled the first their reliance on perceptions and their Some give a higher score for a simplified known national accounts. He made 4 incomplete coverage of poor countries way of implementing existing regulation, entries. On the expense side, “food, hous- constrain their usefulness for analysis. such as completing business start-up ing, clothes and all other necessaries� The Doing Business project, launched formalities in a one-stop shop. were estimated at £40 million. National 8 years ago, goes one step further. It looks The Doing Business project encom- income was split among 3 sources: £8 at domestic small and medium-size com- passes 2 types of data. The first come million from land, £7 million from other panies and measures the regulations ap- from readings of laws and regulations. personal estates and £25 million from plying to them through their life cycle. The second are time and motion indi- labor income. Doing Business and the standard cost cators that measure the efficiency in In later centuries estimates of coun- model initially developed and applied in achieving a regulatory goal (such as try income, expenditure and material the Netherlands are, for the present, the granting the legal identity of a business). inputs and outputs became more abun- only standard tools used across a broad Within the time and motion indicators, dant. But it was not until the 1940s that range of jurisdictions to measure the cost estimates are recorded from official a systematic framework was developed impact of government rule-making on fee schedules where applicable. Here, for measuring national income and ex- business activity.1 Doing Business builds on Hernando de penditure, under the direction of British The first Doing Business report, pub- Soto’s pioneering work in applying the economist John Maynard Keynes. As the lished in 2003, covered 5 indicator sets in time and motion approach first used methodology became an international 133 economies. This year’s report covers by Frederick Taylor to revolutionize the standard, comparisons of countries’ fi- 10 indicator sets in 183 economies. The production of the Model T Ford. De Soto nancial positions became possible. Today project has benefited from feedback from used the approach in the 1980s to show the macroeconomic indicators in na- governments, academics, practitioners the obstacles to setting up a garment fac- tional accounts are standard in every and reviewers.2 The initial goal remains: tory on the outskirts of Lima.3 country. to provide an objective basis for under- Governments committed to the eco- standing and improving the regulatory WHAT DOING BUSINESS DOES nomic health of their country and op- environment for business. NOT COVER portunities for its citizens now focus on more than macroeconomic conditions. WHAT DOING BUSINESS COVERS Just as important as knowing what Doing They also pay attention to the laws, regu- Business does is to know what it does lations and institutional arrangements Doing Business provides a quantitative not do—to understand what limitations that shape daily economic activity. measure of regulations for starting a must be kept in mind in interpreting The global financial crisis has re- business, dealing with construction the data. newed interest in good rules and regu- permits, employing workers, register- lation. In times of recession, effective ing property, getting credit, protecting LIMITED IN SCOPE business regulation and institutions can investors, paying taxes, trading across Doing Business focuses on 10 topics, with support economic adjustment. Easy borders, enforcing contracts and closing the specific aim of measuring the regula- entry and exit of firms, and flexibility a business—as they apply to domestic tion and red tape relevant to the life cycle vi DOING BUSINESS IN THE ARAB WORLD 2010 of a domestic small to medium-size firm. sumer goods in a few urban areas. labor law.6 Doing Business measures one Accordingly: Such assumptions allow global cov- set of factors that help explain the oc- Doing Business does not measure all erage and enhance comparability. But currence of informality and give policy aspects of the business environment they come at the expense of generality. makers insights into potential areas of that matter to firms or investors—or all Business regulation and its enforcement, reform. Gaining a fuller understanding factors that affect competitiveness. It particularly in federal states and large of the broader business environment, does not, for example, measure security, economies, differ across the country. And and a broader perspective on policy chal- macroeconomic stability, corruption, of course the challenges and opportuni- lenges, requires combining insights from the labor skills of the population, the ties of the largest business city—whether Doing Business with data from other underlying strength of institutions Mumbai or São Paulo, Nuku’alofa or sources, such as the World Bank Enter- or the quality of infrastructure.4 Nor Nassau—vary greatly across countries. prise Surveys.7 does it focus on regulations specific to Recognizing governments’ interest in foreign investment. such variation, Doing Business has com- WHY THIS FOCUS Doing Business does not assess the plemented its global indicators with sub- strength of the financial system or national studies in such countries as Bra- Doing Business functions as a kind of financial market regulations, both zil, China, Colombia, the Arab Republic cholesterol test for the regulatory envi- important factors in understanding of Egypt, India, Kenya, Mexico, Morocco, ronment for domestic businesses. A cho- some of the underlying causes of the Nigeria and the Philippines.5 lesterol test does not tell us everything global financial crisis. In areas where regulation is complex about the state of our health. But it does Doing Business does not cover all and highly differentiated, the standard- measure something important for our regulations, or all regulatory goals, ized case used to construct the Doing health. And it puts us on watch to change in any economy. As economies and Business indicator needs to be carefully behaviors in ways that will improve not technology advance, more areas of defined. Where relevant, the standard- only our cholesterol rating but also our economic activity are being regulated. ized case assumes a limited liability overall health. For example, the European Union’s company. This choice is in part empiri- One way to test whether Doing Busi- body of laws (acquis) has now grown cal: private, limited liability companies ness serves as a proxy for the broader to no fewer than 14,500 rule sets. are the most prevalent business form in business environment and for competi- Doing Business measures just 10 most economies around the world. The tiveness is to look at correlations be- phases of a company’s life cycle, choice also reflects one focus of Doing tween the Doing Business rankings and through 10 specific sets of indicators. Business: expanding opportunities for other major economic benchmarks. The The indicator sets also do not cover entrepreneurship. Investors are encour- indicator set closest to Doing Business all aspects of regulation in a particular aged to venture into business when po- in what it measures is the Organisation area. For example, the indicators tential losses are limited to their capital for Economic Co-operation and Devel- on starting a business or protecting participation. opment’s indicators of product market investors do not cover all aspects of regulation; the correlation here is 0.75. commercial legislation. The employing FOCUSED ON THE FORMAL SECTOR The World Economic Forum’s Global workers indicators do not cover all In constructing the indicators, Doing Competitiveness Index and IMD’s World aspects of labor regulation. Measures Business assumes that entrepreneurs are Competitiveness Yearbook are broader in for regulations addressing safety at knowledgeable about all regulations in scope, but these too are strongly corre- work or right of collective bargaining, place and comply with them. In prac- lated with Doing Business (0.79 and 0.72, for example, are not included in the tice, entrepreneurs may spend consid- respectively). These correlations suggest current indicator set. erable time finding out where to go and that where peace and macroeconomic what documents to submit. Or they stability are present, domestic business BASED ON STANDARDIZED CASE may avoid legally required procedures regulation makes an important differ- SCENARIOS altogether—by not registering for social ence in economic competitiveness. Doing Business indicators are built on the security, for example. A bigger question is whether the basis of standardized case scenarios with Where regulation is particularly issues on which Doing Business focuses specific assumptions, such as the busi- onerous, levels of informality are higher. matter for development and poverty re- ness being located in the largest business Informality comes at a cost: firms in duction. The World Bank study Voices city of the economy. Economic indicators the informal sector typically grow more of the Poor asked 60,000 poor people commonly make limiting assumptions slowly, have poorer access to credit and around the world how they thought they of this kind. Inflation statistics, for ex- employ fewer workers—and their work- might escape poverty.8 The answers were ample, are often based on prices of con- ers remain outside the protections of unequivocal: women and men alike pin ABOUT DOING BUSINESS vii their hopes above all on income from business regulation, can be beneficial for regulations and their way of implement- their own business or wages earned in several reasons. Flexible regulation and ing them, while many poor economies employment. Enabling growth—and en- effective institutions, including efficient still work with regulatory systems dating suring that poor people can participate processes for starting a business and effi- to the late 1800s. in its benefits—requires an environment cient insolvency or bankruptcy systems, where new entrants with drive and good can facilitate reallocation of labor and DOING BUSINESS— ideas, regardless of their gender or ethnic capital. And regulatory institutions and A USER’S GUIDE origin, can get started in business and processes that are streamlined and acces- where good firms can invest and grow, sible can help ensure that, as businesses Quantitative data and benchmarking can generating more jobs. rebuild, barriers between the informal be useful in stimulating debate about Small and medium-size enterprises and formal sectors are lowered, creating policy, both by exposing potential chal- are key drivers of competition, growth more opportunities for the poor. lenges and by identifying where pol- and job creation, particularly in develop- icy makers might look for lessons and ing countries. But in these economies up DOING BUSINESS AS A good practices. These data also provide to 80% of economic activity takes place BENCHMARKING EXERCISE a basis for analyzing how different policy in the informal sector. Firms may be pre- approaches—and different policy re- vented from entering the formal sector Doing Business, in capturing some key forms—contribute to desired outcomes by excessive bureaucracy and regulation. dimensions of regulatory regimes, has such as competitiveness, growth and Where regulation is burdensome been found useful for benchmarking. greater employment and incomes. and competition limited, success tends Any benchmarking—for individuals, Seven years of Doing Business data to depend more on whom you know firms or economies—is necessarily par- have enabled a growing body of research than on what you can do. But where tial: it is valid and useful if it helps on how performance on Doing Busi- regulation is transparent, efficient and sharpen judgment, less so if it substitutes ness indicators—and reforms relevant implemented in a simple way, it becomes for judgment. to those indicators—relate to desired easier for any aspiring entrepreneurs, Doing Business provides 2 takes on social and economic outcomes. Some regardless of their connections, to oper- the data it collects: it presents “absolute� 405 articles have been published in ate within the rule of law and to benefit indicators for each economy for each of peer-reviewed academic journals, and from the opportunities and protections the 10 regulatory topics it addresses, and about 1,143 working papers are available that the law provides. it provides rankings of economies, both through Google Scholar.10 Among the In this sense Doing Business values by indicator and in aggregate. Judgment findings: good rules as a key to social inclusion. It is required in interpreting these mea- Lower barriers to start-up are associ- also provides a basis for studying effects sures for any economy and in determin- ated with a smaller informal sector.11 of regulations and their application. For ing a sensible and politically feasible path Lower costs of entry encourage example, Doing Business 2004 found that for reform. entrepreneurship, enhance firm faster contract enforcement was associ- Reviewing the Doing Business rank- productivity and reduce corruption.12 ated with perceptions of greater judicial ings in isolation may show unexpected Simpler start-up translates into fairness—suggesting that justice delayed results. Some economies may rank un- greater employment opportunities.13 is justice denied.9 expectedly high on some indicators. And In the current global crisis policy some economies that have had rapid How do governments use Doing makers face particular challenges. Both growth or attracted a great deal of invest- Business? A common first reaction is developed and developing economies are ment may rank lower than others that to doubt the quality and relevance of seeing the impact of the financial crisis appear to be less dynamic. the Doing Business data. Yet the debate flowing through to the real economy, But for reform-minded govern- typically proceeds to a deeper discussion with rising unemployment and income ments, how much their indicators im- exploring the relevance of the data to the loss. The foremost challenge for many prove matters more than their absolute economy and areas where reform might governments is to create new jobs and ranking. As economies develop, they make sense. economic opportunities. But many have strengthen and add to regulations to Most reformers start out by seeking limited fiscal space for publicly funded protect investor and property rights. examples, and Doing Business helps in activities such as infrastructure invest- Meanwhile, they find more efficient ways this. For example, Saudi Arabia used the ment or for the provision of publicly to implement existing regulations and company law of France as a model for re- funded safety nets and social services. cut outdated ones. One finding of Doing vising its own. Many countries in Africa Reforms aimed at creating a better in- Business: dynamic and growing econo- look to Mauritius—the region’s stron- vestment climate, including reforms of mies continually reform and update their gest performer on Doing Business indi- viii DOING BUSINESS IN THE ARAB WORLD 2010 cators—as a source of good practices for are lacking) and the time component DEVELOPMENT OF THE METHODOLOGY reform. In the words of Luis Guillermo are based on actual practice rather than The methodology for calculating each Plata, the minister of commerce, indus- the law on the books. This introduces a indicator is transparent, objective and try and tourism of Colombia, degree of subjectivity. The Doing Busi- easily replicable. Leading academics col- ness approach has therefore been to work laborate in the development of the indi- It’s not like baking a cake where you follow with legal practitioners or professionals cators, ensuring academic rigor. Seven the recipe. No. We are all different. But we who regularly undertake the transac- of the background papers underlying can take certain things, certain key les- tions involved. Following the standard the indicators have been published in sons, and apply those lessons and see how methodological approach for time and leading economic journals. One is at an they work in our environment. motion studies, Doing Business breaks advanced stage of publication. down each process or transaction, such Doing Business uses a simple averag- Over the past 7 years there has been as starting and legally operating a busi- ing approach for weighting subindica- much activity by governments in re- ness, into separate steps to ensure a bet- tors and calculating rankings. Other ap- forming the regulatory environment for ter estimate of time. The time estimate proaches were explored, including using domestic businesses. Most reforms relat- for each step is given by practitioners principal components and unobserved ing to Doing Business topics were nested with significant and routine experience components. The principal components in broader programs of reform aimed at in the transaction. and unobserved components approaches enhancing economic competitiveness. In Over the past 7 years more than turn out to yield results nearly identical to structuring their reform programs, gov- 11,000 professionals in 183 economies those of simple averaging. The tests show ernments use multiple data sources and have assisted in providing the data that that each set of indicators provides new indicators. And reformers respond to inform the Doing Business indicators. This information. The simple averaging ap- many stakeholders and interest groups, year’s report draws on the inputs of more proach is therefore robust to such tests. all of whom bring important issues and than 8,000 professionals. The Doing Busi- concerns into the reform debate. ness website indicates the number of re- IMPROVEMENTS TO THE METHODOLOGY AND DATA REVISIONS World Bank support to these reform spondents per economy and per indicator. processes is designed to encourage criti- Respondents are professionals or govern- The methodology has undergone contin- cal use of the data, sharpening judgment ment officials who routinely administer ual improvement over the years. Changes and avoiding a narrow focus on improv- or advise on the legal and regulatory have been made mainly in response to ing Doing Business rankings. requirements covered in each Doing Busi- country suggestions. For enforcing con- ness topic. Because of the focus on legal tracts, for example, the amount of the METHODOLOGY AND DATA and regulatory arrangements, most of the disputed claim in the case study was respondents are lawyers. The credit in- increased from 50% to 200% of income Doing Business covers 183 economies— formation survey is answered by officials per capita after the first year of data col- including small economies and some of of the credit registry or bureau. Freight lection, as it became clear that smaller the poorest countries, for which little or forwarders, accountants, architects and claims were unlikely to go to court. no data are available in other data sets. other professionals answer the surveys Another change relates to starting a The Doing Business data are based on related to trading across borders, taxes business. The minimum capital require- domestic laws and regulations as well and construction permits. ment can be an obstacle for potential as administrative requirements. (For a The Doing Business approach to entrepreneurs. Initially, Doing Business detailed explanation of the methodology, data collection contrasts with that of measured the required minimum capital see the Doing Business website.) enterprise or firm surveys, which capture regardless of whether it had to be paid often one-time perceptions and experi- up front or not. In many economies only INFORMATION SOURCES FOR THE DATA ences of businesses. A corporate lawyer part of the minimum capital has to be Most of the indicators are based on laws registering 100–150 businesses a year paid up front. To reflect the actual po- and regulations. In addition, most of the will be more familiar with the process tential barrier to entry, the paid-in mini- cost indicators are backed by official fee than an entrepreneur, who will register mum capital has been used since 2004. schedules. Doing Business respondents a business only once or maybe twice. A This year’s report includes changes both fill out written surveys and provide bankruptcy judge deciding dozens of in the core methodology for one set of references to the relevant laws, regu- cases a year will have more insight into indicators, those on employing work- lations and fee schedules, aiding data bankruptcy than a company that may ers. The assumption for the standardized checking and quality assurance. undergo the process. case study was changed to refer to a For some indicators part of the small to medium-size company with 60 cost component (where fee schedules employees rather than 201. The scope of ABOUT DOING BUSINESS ix the question on night and weekly holiday PILOT INDICATORS ON GETTING national laws follow the minimum age ELECTRICITY work has been limited to manufacturing threshold for general access to employ- activities in which continuous opera- Where the quality and accessibility of ment (14 or 15 years, depending on the tion is economically necessary. Legally infrastructure services are poor, com- development of the country’s economy mandated wage premiums for night and panies’ productivity and growth suffer. and educational facilities), for hazardous weekly holiday work up to a threshold According to firm surveys in 89 econo- work (18 years) and for light work (12 or are no longer considered a restriction. mies, electricity was one of the big- 13 years, depending on the development In addition, the calculation of the mini- gest constraints to their business.14 The of the country’s economy and educa- mum wage ratio was modified to ensure Doing Business pilot data set on getting tional facilities). that an economy would not benefit in electricity is the first to compare dis- In the future the research will ex- the scoring from lowering the minimum tribution utilities around the world on pand to more economies and to more wage to below $1.25 a day, adjusted for how efficiently they respond to customer areas covered by the core labor stan- purchasing power parity. This level is requests for connections. dards. On the basis of this, Doing Busi- consistent with recent adjustments to The pilot indicators track the process ness plans to develop a worker protection the absolute poverty line. Finally, the cal- a standardized local private business goes indicator, a process that will benefit from culation of the redundancy cost was ad- through in obtaining an electricity con- the advice of a consultative group with justed so that having severance payments nection. By applying its methodology to broad representation of stakeholders. The or unemployment protections below a electricity provision, Doing Business aims ILO, which has leadership on the core certain threshold does not mean a better to illustrate some of the real implications labor standards, will serve as an essential score for an economy. of weak infrastructure services for en- source of guidance in this process. While All changes in methodology are ex- trepreneurs. The indicators complement this process is ongoing, the employing plained on the Doing Business website. In existing data that focus on generation workers indicators have been removed addition, historical data for each indicator capacity, consumption prices and the re- as a guidepost in the World Bank Coun- and economy are available on the website, liability of electricity supply.15 And they try Policy and Institutional Assessment beginning with the first year the indicator allow further investigation of the effects (CPIA) questionnaire and Bank Group or economy was included in the report. of the process of getting an electricity staff have been instructed not to use the To provide a comparable time series for connection on economic outcomes. indicators as a basis for policy advice or research, the data set is back-calculated for evaluating country development pro- to adjust for changes in methodology and WORKER PROTECTION grams or assistance strategies. any revisions in data due to corrections. The ILO core labor standards consist of The website also makes available all origi- freedom of association and recognition nal data sets used for background papers. of the right to collective bargaining, the Information on data corrections is elimination of all forms of forced or 1. The standard cost model is a quantita- tive methodology for determining the provided on the website. A transparent compulsory labor, the abolition of child administrative burdens that regulation complaint procedure allows anyone to labor and equitable treatment in employ- imposes on businesses. The method can challenge the data. If errors are con- ment practices. The Doing Business indi- be used to measure the effect of a single firmed after a data verification process, cators on employing workers are consis- law or of selected areas of legislation or to perform a baseline measurement of they are expeditiously corrected. tent with these core labor standards but all legislation in a country. do not measure compliance with them. 2. This included a review by the World NEW THIS YEAR To complement these indicators, Doing Bank Independent Evaluation Group Business has launched research on the (2008). This year’s Doing Business report pres- adoption of core labor standards in na- 3. De Soto (2000). ents initial findings in 2 new areas: the tional legislation. 4. The indicators related to trading across ease of obtaining an electricity connec- The initial research focuses on the borders and dealing with construction tion and the level of adoption in national national implementation of minimum permits and the pilot indicators on get- ting electricity take into account limited legislation of aspects of the International age provisions included in 2 ILO conven- aspects of an economy’s infrastructure, Labour Organization’s (ILO) core labor tions on child labor: Convention 138, on including the inland transport of goods standards on child labor. Neither of these the minimum age for admission to em- and utility connections for businesses. pilot indicator sets is included in the ployment (1973), and Convention 182, 5. http://subnational.doingbusiness.org. Doing Business rankings. on the worst forms of child labor (1999). 6. Schneider (2005). This year’s report presents initial 7. http://www.enterprisesurveys.org. findings on 102 countries. For each coun- 8. Narayan and others (2000). try Doing Business examined whether x DOING BUSINESS IN THE ARAB WORLD 2010 9. World Bank (2003). 10. http://scholar.google.com. 11. For example, Masatlioglu and Rigolini (2008), Kaplan, Piedra and Seira (2008), Ardagna and Lusagi (2009) and Djankov and others (forthcoming). 12. For example, Alesina and others (2005), Perotti and Volpin (2004), Klapper, Laeven and Rajan (2006), Fisman and Sarria-Allende (2004), Antunes and Cavalcanti (2007), Barseghyan (2008), Djankov and others (forthcoming) and Klapper, Lewin and Quesada Delgado (2009). 13. For example, Freund and Bolaky (2008), Chang, Kaltani and Loayza (2009) and Helpman, Melitz and Rubinstein (2008). 14. According to World Bank Enterprise Survey data for the 89 economies, 15.6% of managers consider electricity the most serious constraint, while a similar share (15.7%) consider access to finance the most serious constraint (http://www .enterprisesurveys.org). 15. See, for example, data of the Interna- tional Energy Agency or the World Bank Enterprise Surveys (http://www .enterprisesurveys.org). STARTING A BUSINESS 1 Overview FIGURE 1.1 Where do Arab economies rank on business-friendly regulations? DB2010 ranking on the ease of doing business (1–183) EACH LINE SHOWS THE RANK AVERAGE OF ONE ECONOMY IN THE REGION 1 RANK 183 OECD high income 30 Eastern Europe & Central Asia 71 East Asia & Pacific 83 Middle East 92 & North Africa Latin America 95 & Caribbean Arab world 103 South Asia 118 Sub-Saharan Africa 139 Source: Doing Business database. The past year was a tough one for doing Business indicators do not assess market DEVELOPING ECONOMIES SET A business. Firms around the world had to regulation or the strength of the financial FAST PACE cope with the effects of a financial crisis infrastructure, both important factors in that started in rich economies but led to understanding some of the underlying Low- and lower-middle-income econo- a global economic downturn. Access to fi- causes of the global financial crisis. Nor mies accounted for two-thirds of re- nance became more difficult. Demand for do they account for other factors im- forms recorded by Doing Business in many products fell in domestic and inter- portant for business at any time, such as 2008/09, continuing a trend that started national markets, and trade slowed glob- macroeconomic conditions, infrastruc- 3 years ago. Indeed, three-quarters of ally. Policy makers and governments also ture, workforce skills or security. such economies covered by Doing Busi- faced big challenges—from stabilizing the But the regulatory environment for ness reformed. And for the first time a financial sector and restoring confidence businesses can influence how well firms Sub-Saharan African economy, Rwanda, and trust to countering rising unemploy- cope with the crisis and are able to seize led the world in Doing Business reforms. ment and providing necessary safety nets opportunities when recovery begins. Such reforms are as timely as ever. as an estimated 50 million people risked Where business regulation is transpar- Many firms in developing economies losing their jobs as a result of the crisis.1 ent and efficient, it is easier for firms to have been affected by lower demand And all this in the face of rising public reorient themselves and for new firms to for their exports and a drop in capital debt as fiscal stimulus packages collided start up. Efficient court and bankruptcy flows and remittances. At the same time with tightening fiscal revenues. procedures help ensure that assets can be businesses in low-income economies on Despite the many challenges, in reallocated quickly. And strong property average still face more than twice the reg- 2008/09 more governments implemented rights and investor protections can help ulatory burden that their counterparts in regulatory reforms aimed at making it establish the basis for trust when inves- high-income economies do when start- easier to do business than in any year tors start investing again. ing a business, transferring property, since 2004, when Doing Business started Recognizing the importance of filing taxes or resolving a commercial to track reforms through its indicators. firms—especially small and medium-size dispute through the courts. Only 2% of Doing Business recorded 287 such re- enterprises—for creating jobs and rev- adults on average have a credit history in forms in 131 economies, including 16 enue, some governments, including those low-income economies, compared with economies in the Arab world, between of China, the Republic of Korea, Ma- 52% of adults in high-income economies. June 2008 and May 2009. Reformers in laysia and the Russian Federation, have Developed economies have on average 10 the Arab world focused on making it included reforms of business regulation times as many newly registered firms per easier to start and operate a business, in their economic recovery plans. But adult as the Middle East—and a busi- deal with construction permits and trade most reforms recorded in 2008/09 were ness density 4 times that in developing across borders and on improving the effi- part of longer-term efforts to increase economies.2 ciency of commercial dispute resolution. competitiveness and encourage firm and Regulatory burdens can push Reforming business regulation on job creation by improving the regulatory firms—and employment—into the in- its own is not a recipe for recovery from environment for businesses. And most formal sector. There, firms are not regis- financial or economic distress. Many took place in developing economies. tered, do not pay taxes and have limited other factors come into play. The Doing access to formal credit and institutions— 2 DOING BUSINESS IN THE ARAB WORLD 2010 TABLE 1.1 Rankings on the ease of doing business AW 2010 AW 2010 AW 2010 RANK RANK ECONOMY RANK RANK ECONOMY RANK RANK ECONOMY 1 Singapore 62 Spain 123 Nepal 2 New Zealand 63 Kazakhstan 124 Paraguay 3 Hong Kong, China 64 Luxembourg 125 Nigeria 4 United States 6 65 Oman 126 Bhutan 5 United Kingdom 66 Namibia 127 Micronesia, Fed. Sts. 6 Denmark 67 Rwanda 12 128 Morocco 7 Ireland 68 Bahamas, The 129 Brazil 8 Canada 7 69 Tunisia 130 Lesotho 9 Australia 70 St. Vincent and the Grenadines 131 Tanzania 10 Norway 71 Montenegro 132 Malawi 11 Georgia 72 Poland 133 India 12 Thailand 73 Turkey 134 Madagascar 1 13 Saudi Arabia 74 Czech Republic 135 Mozambique 14 Iceland 75 Jamaica 13 136 Algeria 15 Japan 76 St. Kitts and Nevis 137 Iran, Islamic Rep. 16 Finland 77 Panama 138 Ecuador 17 Mauritius 78 Italy 14 139 West Bank and Gaza 18 Sweden 79 Kiribati 140 Gambia, The 19 Korea, Rep. 80 Belize 141 Honduras 2 20 Bahrain 81 Trinidad and Tobago 142 Ukraine 21 Switzerland 82 Albania 15 143 Syrian Arab Republic 22 Belgium 83 Dominica 144 Philippines 23 Malaysia 84 El Salvador 145 Cambodia 24 Estonia 85 Pakistan 146 Cape Verde 25 Germany 86 Dominican Republic 147 Burkina Faso 26 Lithuania 87 Maldives 148 Sierra Leone 27 Latvia 88 Serbia 149 Liberia 28 Austria 89 China 150 Uzbekistan 29 Israel 90 Zambia 151 Haiti 30 Netherlands 91 Grenada 152 Tajikistan 31 France 92 Ghana 16 153 Iraq 32 Macedonia, FYR 93 Vietnam 17 154 Sudan 3 33 United Arab Emirates 94 Moldova 155 Suriname 34 South Africa 95 Kenya 156 Mali 35 Puerto Rico 96 Brunei Darussalam 157 Senegal 36 St. Lucia 97 Palau 158 Gabon 37 Colombia 98 Marshall Islands 159 Zimbabwe 38 Azerbaijan 8 99 Yemen, Rep. 160 Afghanistan 4 39 Qatar 9 100 Jordan 161 Bolivia 40 Cyprus 101 Guyana 18 162 Comoros 41 Kyrgyz Republic 102 Papua New Guinea 19 163 Djibouti 42 Slovak Republic 103 Croatia 164 Timor-Leste 43 Armenia 104 Solomon Islands 165 Togo 44 Bulgaria 105 Sri Lanka 20 166 Mauritania 45 Botswana 10 106 Egypt, Arab Rep. 167 Lao PDR 46 Taiwan, China 107 Ethiopia 168 Côte d’Ivoire 47 Hungary 11 108 Lebanon 169 Angola 48 Portugal 109 Greece 170 Equatorial Guinea 49 Chile 110 Guatemala 171 Cameroon 50 Antigua and Barbuda 111 Seychelles 172 Benin 51 Mexico 112 Uganda 173 Guinea 52 Tonga 113 Kosovo 174 Niger 53 Slovenia 114 Uruguay 175 Eritrea 54 Fiji 115 Swaziland 176 Burundi 55 Romania 116 Bosnia and Herzegovina 177 Venezuela, R.B. 56 Peru 117 Nicaragua 178 Chad 57 Samoa 118 Argentina 179 Congo, Rep. 58 Belarus 119 Bangladesh 180 São Tomé and Principe 59 Vanuatu 120 Russian Federation 181 Guinea-Bissau 60 Mongolia 121 Costa Rica 182 Congo, Dem. Rep. 5 61 Kuwait 122 Indonesia 183 Central African Republic Note: The rankings for all economies are benchmarked to June 2009. Rankings on the ease of doing business are the average of the economy's rankings on the 10 topics covered in Doing Business 2010. Source: Doing Business database. OVER VIE W 3 and workers do not benefit from the pro- played a part in motivating reforms. TABLE 1.2 How do Arab economies rank on the ease tections that the law provides. The global Sixteen of 20 economies in the Arab of doing business? crisis is expected to further increase world implemented 38 reforms in the Global Arab world informal activity. Almost two-thirds of areas measured, up from 31 reforms Economy rank rank the world’s workers are already estimated in the previous year. The United Arab Saudi Arabia 13 1 to be employed in the informal sec- Emirates and the Arab Republic of Egypt Bahrain 20 2 tor.3 Most are in low- and lower-middle- were among the most active reformers. United Arab Emirates 33 3 income economies. And a disproportion- Both rank among the top 10 global Doing Qatar 39 4 ate share are from already vulnerable Business reformers in 2008/09, Egypt for Kuwait 61 5 groups, such as youth and women.4 the fourth time. Other active reformers Oman 65 6 Most Doing Business reforms in de- include Jordan, the Republic of Yemen Tunisia 69 7 veloping economies still focus on cutting and Algeria. Yemen, Rep. 99 8 red tape and simplifying bureaucratic In recent years economies in the re- Jordan 100 9 formalities. Over the past 6 years 80% gion have increasingly picked up reform Egypt, Arab Rep. 106 10 of reforms in low- and lower-middle- practices from one another. Economies Lebanon 108 11 Morocco 128 12 income economies were aimed at reduc- such as Egypt, Jordan, Morocco, Saudi Algeria 136 13 ing the administrative burden for firms, Arabia, the Syrian Arab Republic and West Bank and Gaza 139 14 mostly by easing business start-up and the Republic of Yemen set broad-based Syrian Arab Republic 143 15 trade. This makes sense and addresses reform targets, often spurred by reform Iraq 153 16 important needs. When informal firms successes in neighboring economies Sudan 154 17 were asked in 2008 about obstacles to and others. One focus of reform: the Comoros 162 18 formally registering their business, 67% minimum capital requirement for start- Djibouti 163 19 in Côte d’Ivoire and 57% in Madagascar ing a limited liability company. Eight Mauritania 166 20 cited registration fees as a major or very economies in the region have reduced Source: Doing Business database. severe obstacle.5 or eliminated the minimum capital re- In easing business start-up and quirement since 2005. Five of these used areas in 2008/09. Six economies simpli- trade, much can be achieved through to have among the highest such require- fied formalities related to construction cost-effective administrative reforms. ments in the world—up to the equivalent permits, more than in the previous 5 The one-stop shop for starting a business of $120,000. The United Arab Emirates years combined. Morocco launched a in Burkina Faso cost $200,000. Azerbai- was among the economies abolishing state-of-the-art private credit bureau. jan’s cost $5 million. And the costs are far the minimum capital requirement in Jordan, Kuwait, Tunisia and the Republic outweighed by the estimated savings for 2008/09, perhaps inspired by the ex- of Yemen reformed customs and im- businesses—estimated at $1.7 million ample of Egypt, Saudi Arabia, Tunisia plemented electronic systems to speed a year in Burkina Faso, $8.4 million in and the Republic of Yemen. trade. Court reforms, an area where the Azerbaijan. Efficient systems also facili- Other barriers to entry were also region has lagged, took place in Algeria, tate enforcement, a particular challenge lowered. One-stop shops are now opera- Egypt and Jordan—and more reforms in many developing economies where re- tional in Egypt, Jordan, Morocco, Saudi are under way in Saudi Arabia and the sources are scarce. Risk-based inspection Arabia, Tunisia, the United Arab Emir- United Arab Emirates. systems at customs or in the construc- ates and the Republic of Yemen. And the tion sector allow public officials to focus results show. In Egypt in 2005, starting WHAT CONSISTENT REFORMERS DO their resources and attention where they a limited liability company took 13 pro- are most needed. cedures, more than a month and paid-in As Doing Business has tracked regula- minimum capital of 8 times income per tory reforms over the past 6 years, some INSPIRED BY NEIGHBORS, capita. Today it takes a week, with no patterns have started to emerge. Regula- REFORMERS PICK UP THE PACE minimum capital requirement. Reforms tory reform tends to pick up when pres- in Egypt, Saudi Arabia and the Republic sure rises. One reason can be increasing In 2008/09 Doing Business reforms picked of Yemen were followed by an increase in competition as economies join a com- up around the world, with at least 60% of the number of registered limited liabil- mon market or trade agreement, such as economies reforming in every region. ity companies. In Egypt limited liability the European Union or the U.S.–Central Reformers were particularly active in 2 companies accounted for 30% of the American Free Trade Agreement. Finan- regions, Eastern Europe and Central Asia companies registered in 2008, up from cial crisis and economic downturn are and the Middle East and North Africa. less than 19% just 2 years before. another strong motivation for reform. In both, competition among neighbors Reforms also intensified in other So is the need to rebuild an economy FIGURE 1.2 287 reforms in 2008/09 made it easier to do business—27 made it more difficult 61 Afghanistan Albania Argentina Armenia Bangladesh Belarus Botswana Brazil Bulgaria Burkina Faso Cameroon Cape Verde Central African Republic Colombia Egypt, Arab Rep. Ethiopia Germany Reforms Ghana making it Guinea-Bissau easier to Guyana do business Honduras Hong Kong, China Hungary Indonesia Iran, Islamic Rep. Jordan 34 Kazakhstan Korea, Rep. Afghanistan Kyrgyz Republic Algeria 31 Angola Lebanon Liberia Algeria Belarus Luxembourg Bahrain Belgium Macedonia, FYR Belarus Bulgaria 27 Madagascar Bosnia and Herzegovina Burkina Faso Malaysia Burkina Faso Colombia Afghanistan Mali Colombia Czech Republic Armenia Mexico Croatia Estonia Azerbaijan Moldova Czech Republic Ethiopia Colombia Montenegro Egypt, Arab Rep. France Egypt, Arab Rep. Mozambique Georgia Guatemala Greece Niger Guatemala Hong Kong, China Guatemala Oman Honduras Indonesia Haiti Pakistan Hong Kong, China Ireland Honduras Peru Iran, Islamic Rep. Jamaica Kenya Poland Jordan Jordan Kyrgyz Republic Rwanda Kazakhstan Kyrgyz Republic Latvia Samoa Kyrgyz Republic Latvia Macedonia, FYR Saudi Arabia Liberia Macedonia, FYR Mauritius Serbia Macedonia, FYR Mauritius Morocco Sierra Leone Mali Moldova Nigeria Singapore Montenegro Nepal Philippines Slovenia Netherlands Panama Poland St. Lucia Panama 7 Peru Rwanda St. Vincent and the Grenadines Portugal Portugal Serbia Syrian Arab Republic Saudi Arabia Belarus Romania Sierra Leone Taiwan, China Singapore Kyrgyz Republic Russian Federation Sri Lanka Tajikistan Slovenia Macedonia, FYR Rwanda Tajikistan Thailand Tajikistan Mauritius Singapore Turkey Togo United Arab Emirates Montenegro United Kingdom Vanuatu United Arab Emirates United Kingdom Peru West Bank and Gaza Yemen, Rep. Yemen, Rep. Uzbekistan Rwanda Zimbabwe Zambia Starting Dealing with Employing Registering Getting a business construction permits workers property credit West Bank and Gaza Kenya Honduras Argentina Cape Verde Reforms New Zealand Luxembourg Botswana making it Romania Maldives Madagascar more difficult Solomon Islands Portugal Sierra Leone to do business Sri Lanka Suriname Tanzania Tajikistan Uruguay Source: Doing Business database. OVER VIE W 5 45 Algeria Angola Bangladesh Belarus Belgium Benin 38 Brunei Darussalam Cameroon Albania Cape Verde Angola Colombia Armenia Czech Republic Azerbaijan Djibouti Bangladesh Fiji Belarus Finland Benin Guatemala Burkina Faso Iceland Cameroon Iran, Islamic Rep. China Israel Colombia Jordan Congo, Dem. Rep. Kazakhstan Georgia Korea, Rep. Grenada Kosovo Guyana Kyrgyz Republic Haiti Lao PDR Iran, Islamic Rep. Lebanon Jordan Macedonia, FYR Kuwait 18 Mexico Kyrgyz Republic Moldova Liberia Albania 16 Montenegro Malawi Colombia Oman Mali Algeria Estonia Peru Mauritius Botswana France Philippines Mozambique Burkina Faso Germany Poland Paraguay Costa Rica India Russian Federation Peru Egypt, Arab Rep. Kuwait 10 Lithuania Sierra Leone Portugal Ethiopia Colombia South Africa Rwanda Grenada Malawi Dominican Republic Spain Senegal Jordan Mauritius Indonesia St. Vincent and the Grenadines Slovak Republic Malaysia Philippines Macedonia, FYR Sudan St. Kitts and Nevis Mali Poland Mali Taiwan, China Sudan Mauritius Russian Federation Rwanda Timor-Leste Tunisia Norway Rwanda Sierra Leone Togo Uganda Papua New Guinea Samoa Tajikistan Tonga United Arab Emirates Peru Sierra Leone Tunisia Uzbekistan Vietnam Portugal Tajikistan Ukraine Vietnam Yemen, Rep. West Bank and Gaza Uruguay Protecting Paying Trading Enforcing Closing investors taxes across borders contracts a business Cambodia Sierra Leone Romania Congo, Dem. Rep. Lithuania Romania Tunisia Venezuela, R.B. 6 DOING BUSINESS IN THE ARAB WORLD 2010 following conflict, as in Liberia, Rwanda FIGURE 1.3 Reforming business regulations in Arab economies and Sierra Leone. Whatever the motivation, govern- Number of reforms by economy Number of reforms by Doing Business topic ments that succeed in sustaining reform Jordan Starting a business programs, as measured by Doing Busi- Algeria ness, tend to have common features. To Egypt, Arab Rep. Paying taxes begin with, they follow a longer-term United Arab Emirates Dealing with Yemen, Rep. construction permits agenda aimed at increasing the com- Kuwait Trading across borders petitiveness of their firms and economy. Colombia, Egypt, Malaysia and Rwanda Lebanon Enforcing contracts are all examples of economies incorpo- Oman Registering property Saudi Arabia rating business regulation reforms into a Sudan Getting credit broader competitiveness agenda. Tunisia Such reformers continually push Closing a business West Bank and Gaza forward and stay proactive. Singapore Bahrain Protecting investors and Hong Kong (China) rank among Djibouti the top economies on the ease of doing Morocco business and are also some of the most Syrian Arab Republic consistent reformers. Saudi Arabia’s con- sistent reform program propelled it to a Reforms making it more Reforms making it Reforms making it more Reforms making it difficult to do business easier to do business difficult to do business easier to do business ranking of 13 among 183 economies on Source: Doing Business database. the overall ease of doing business. Successful Doing Business reformers and keeping a steady course of reform ects. It lowered the cost of transferring are comprehensive. Over the past 5 years might help economies recover from property and reduced the corporate in- Colombia, Egypt, Georgia, the former shocks, including the current global come tax rate for some sectors from 25% Yugoslav Republic of Macedonia, Mau- financial and economic crisis. In the to 19%. It also made it easier to enforce ritius and Rwanda each implemented at words of Egyptian Minister of Invest- contracts by adopting a new code of civil least 19 reforms, covering 8 or more of ment Mahmoud Mohieldin, procedure and increasing the efficiency the 10 areas measured by Doing Busi- of the courts. ness. This broad approach increases the It is not just a crisis of the economy. It is chances of success and impact. Recent a crisis of economic thinking. It is a crisis Bahrain further consolidated prelimi- research suggests that reforms in differ- that is confusing many reformers . . . nary approvals for building permits in ent areas tend to be complementary. One [but] whatever crisis you are facing, you the one-stop shop, reducing the time study showed that when economies open need to make life easier for those who are required to obtain a permit. up their product markets to international endeavoring and working hard to create competition, the benefits are greater if opportunities for jobs, and this is the least Djibouti eased the tax burden on busi- the cost of entry is lower. Lower barriers that we can be doing. nesses by replacing the consumption tax to entry allow firms to move more easily with a 7% value added tax on the supply toward industries that most benefit from WHO REFORMED IN THE ARAB of goods and services. trade openness.6 WORLD IN 2008/09? Consistent reformers are inclusive. Egypt was among the world’s 10 most They involve all relevant public agen- Doing business is becoming easier in the active reformers for the fourth time in cies and private sector representatives Arab world. In the past year 16 econo- 2008/09. It moved up in the global rank- and institutionalize reform at the highest mies implemented 40 reforms, 38 mak- ings on the ease of doing business from level. More than 20 economies, includ- ing it easier to do business and 2 making 116 to 106 among 183 economies. Egypt ing Burkina Faso, Colombia, India, Syria it more difficult. The United Arab Emir- made business start-up less costly and and Vietnam, have formed committees ates, Egypt and Jordan were among the accelerated the construction permitting at the ministerial level. Reforms in Egypt most active reformers. process by eliminating most preapprov- involved 32 government agencies sup- als. It expanded the range of information ported by the parliament. Algeria introduced new regulations to available from the private credit bureau. Successful reformers stay focused improve the administration of construc- And it created commercial courts to speed thanks to a long-term vision supported tion permits and help ensure the safe and up the resolution of contract disputes. by specific goals. Setting long-term goals timely completion of construction proj- OVER VIE W 7 center for business registration and a Jordan had 6 reforms making it easier faster process for construction permits. West Bank and Gaza made contract to do business. It eased business start-up A new permitting procedure allows enforcement faster. New judges have by offering a single counter for company builders to begin construction with a been recruited and trained, and courts registration at the company registrar. It temporary building permit after just 1 now have case management software and made dealing with construction permits day and obtain a final building permit an enforcement judge in charge of the ex- easier by extending the services of its after just 1 week. ecution of judgments. The completion of new one-stop shop to midsize commer- a major project to computerize records at cial construction projects. Major court Sudan speeded up trade through im- the land registry speeded up the process reforms, including setting up a commer- provements at customs. It made it easier of registering property. But West Bank cial court division, improved contract for traders to file customs declarations and Gaza made it more difficult to start enforcement. Simpler filing forms and online, connected 10 more customs of- a business by increasing the minimum an online filing and payment system fices to the electronic customs system capital requirement. made paying taxes easier for businesses. and added 2 new scanners at the Port of Property transfer fees were reduced from Sudan. In addition, a new tax law reduced The Republic of Yemen, the world’s 10% of the property value to 7.5%. And the tax burden on business by lowering fastest reformer in starting a business trading became faster. The implementa- the corporate income tax rate by an aver- in 2007/08, continued to ease business tion of a risk-based inspection regime age of 15 percentage points and the capi- start-up. It also enhanced access to credit and a system allowing online submission tal gains tax by 5 percentage points. information by removing the minimum of customs declarations reduced the cus- threshold for loans included in the da- toms clearance time for exports by 2 days Syria eased business start-up by re- tabase and guaranteeing the right of and for imports by 3. ducing the paid-in minimum capi- borrowers to view their credit reports. tal requirement and putting stan- And it expedited trade through a new Kuwait established a new legal proce- dard incorporation forms online. electronic document submission system dure enabling companies on the verge of and implementation of a risk-based in- insolvency to restructure. Improvements Tunisia strengthened investor protec- spection system. in customs administration and human tions by introducing requirements for resource training have helped reduce the greater corporate disclosure. Expansion time to clear goods. of the electronic single window for trade transactions made it possible for Tu- 1. Based on estimates by the International Lebanon made it easier to pay taxes nisian traders to quickly file online all Labour Organization. This year Doing Business improved the methodology for by introducing electronic payment and documents required to clear their cargo, the employing workers indicators to eliminating the requirement for busi- reducing processing delays by 2 days. ensure that the existence of safety nets is nesses to obtain permission to use ac- Tunisia also increased the tax cost of taken into account in the current mea- celerated depreciation. It eased business employment by raising social security sures of flexibility. start-up by ending the requirement to contribution rates. 2. Klapper, Lewin and Quesada Delgado (2009). Business density is defined as the have company books stamped. number of businesses as a percentage of The United Arab Emirates moved the working-age population (ages 18–65). Morocco expanded access to credit up in the global rankings from 47 to 3. OECD Development Centre (2009). with a new private credit bureau that 33 and became one of the world’s 10 4. Ardagna and Lusagi (2009). started operations in March 2009. most active reformers for the first time, 5. World Bank Enterprise Surveys (http:// with reforms in 3 areas. The country www.enterprisesurveys.org). Oman adopted a new tax law to mod- eased business start-up by abolishing 6. Chang, Kaltani and Loayza (2009), Help- ernize its tax regime and simplify pro- the minimum capital requirement and man, Melitz and Rubinstein (2008) and cedures. It eased business start-up by simplifying registration. It continued to Freund and Bolaky (2008). introducing online company name regis- improve its online system for processing tration and payment at the registry with building permits, speeding up permit a prepaid card. delivery. Trading across borders also be- came faster, thanks to greater capac- Saudi Arabia moved up in the global ity at the container terminal in Dubai, rankings on the ease of doing business elimination of a required document and from 15 to 13—the highest ranking in lower cost for trade finance products. the region—by establishing a one-stop Doing Business topics Starting a FIGURE 2.1 Starting a business: getting a local business limited liability company up and running Rankings are based on 4 subindicators Preregistration, registration As % of income and postregistration per capita, no bribes (in calendar days) included 25% 25% Time Cost 25% 25% Procedures Paid-in minimum capital Procedure is completed when Funds deposited final document in a bank or with a notary is received before registration, as % of income per capita When entrepreneurs draw up a business dures are recorded only where interaction WHO REFORMED IN 2008/09? plan and try to get under way, the first is required with an external party. It is as- hurdles they face are the procedures sumed that the founders complete all pro- Worldwide, 61 economies made it required to incorporate and register the cedures themselves unless professional easier to start a business in 2008/09. new firm before they can legally operate. services (such as by a notary or lawyer) Sub-Saharan Africa and Eastern Europe Economies differ greatly in how they are required by law. Voluntary procedures and Central Asia had the most reforms. regulate the entry of new businesses. In are not counted, nor are industry-specific The Arab world saw 8 reforms mak- some the process is straightforward and requirements and utility hookups. Lawful ing start-up easier—in Egypt, Jordan, affordable. In others the procedures are shortcuts are counted. Lebanon, Oman, Saudi Arabia, Syria, the so burdensome that entrepreneurs may It is assumed that all information United Arab Emirates and the Republic have to bribe officials to speed up the is readily available to the entrepreneur, of Yemen. process or may decide to run their busi- that there has been no prior contact with ness informally. officials and that all government and Egypt eliminated the minimum capital The data on starting a business are nongovernment entities involved in the requirement for limited liability com- based on a survey and research inves- process function without corruption. panies. tigating the procedures that a standard To make the data comparable across small to medium-size company needs economies, detailed assumptions about Jordan streamlined procedures at the to complete to start operations legally. the business are used. The business is one-stop shop. Since February 2009 en- These include obtaining all necessary a limited liability company conducting trepreneurs have been able to file all reg- permits and licenses and completing all general commercial activities, is located istration documents and obtain the reg- required inscriptions, verifications and in the largest business city and is 100% istration certificate at a single counter. notifications with authorities to enable domestically owned. It has a start-up the company to formally operate. Proce- capital of 10 times income per capita, a Lebanon abolished the requirement to TABLE 2.1 turnover of at least 100 times income per have company books stamped at the Where is it easy to start a business—and capita and between 10 and 50 employees. commercial registry. In addition, it now where not? The business does not qualify for any allows company books and records to be Easiest GLOBAL Most difficult GLOBAL special benefits and does not own real maintained electronically. But the im- (AW RANK 1–5) RANK (AW RANK 16–20) RANK estate. provements were partially offset by the Saudi Arabia 13 Mauritania 149 Analysis shows that burdensome reversal of an earlier reform that had Egypt, Arab Rep. 24 Comoros 168 entry regulations do not increase the streamlined registration procedures by United Arab 44 Iraq 175 Emirates quality of products, make work safer or combining tax and company registra- West Bank 176 Tunisia 47 and Gaza reduce pollution. Instead, they constrain tion at branches of the postal service, Yemen, Rep. 53 Djibouti 177 private investment, push more people LibanPost. Note: Rankings are the average of the economy’s rankings on the into the informal economy, increase con- procedures, time, cost and paid-in minimum capital for starting sumer prices and fuel corruption. Oman simplified company name verifi- a business. Source: Doing Business database. cation. Now entrepreneurs can check the availability of company names online, DOING BUSINESS TOPICS 11 FIGURE 2.2 It also put registration forms online. in legal journals of a notice of company How Arab economies rank on But higher publication and incorpora- establishment. Such notices can more the ease of starting a business tion fees almost doubled the total cost of easily be published electronically, as in Global ranking (1–183) starting a business. Germany, or at the registry, as in Burkina NEW Faso. ZEALAND EASIEST (1) The United Arab Emirates abolished Saudi Arabia CUTTING MINIMUM CAPITAL the minimum capital requirement as well 20 Egypt, Arab Rep. United Arab Emirates as the requirement to show proof of deposit Minimum capital requirements can be a Tunisia of capital for registration. It also simpli- big obstacle for entrepreneurs. They are 40 Yemen, Rep. fied procedures by eliminating the require- often justified as a way to protect inves- Oman ments to hire auditors, obtain an auditors’ tors or prevent unscrupulous entrepre- 60 Bahrain certificate and submit a director certificate. neurs from registering. But this makes Qatar little sense in practice. Fixed amounts 80 Morocco West Bank and Gaza made it more of capital do not take into account dif- Lebanon Sudan difficult to start a business. Amendments ferences in commercial risks. And the 100 Jordan to its company law in October 2008 TABLE 2.2 Syrian Arab Republic increased the minimum capital require- 120 Who makes starting a business easy— Kuwait ment 5-fold. and who does not? Algeria 140 Procedures (number) Mauritania The Republic of Yemen eased business Comoros Fewest Most start-up by dropping the requirement to 160 Iraq Saudi Arabia 4 Djibouti 11 obtain a bank account certificate before West Bank and Gaza Lebanon 5 Iraq 11 Djibouti registering a company. Oman 5 West Bank 11 183 Egypt, Arab Rep. 6 and Gaza TOWARD SMART REGULATION Yemen, Rep. 6 Kuwait 13 Algeria 14 and name approval takes only a few Making business start-up easier has been Time (days) hours. Paying registration fees is also the most popular of the Doing Business Fastest Slowest easier now. With a prepaid card issued reforms in the Arab world. Twelve Arab for use only for making government economies have implemented 32 such Saudi Arabia 5 Kuwait 35 Qatar 6 Sudan 36 payments, applicants can pay the fees reforms since 2004. Egypt, Arab Rep. 7 Djibouti 37 at the company registry at the time of Starting a business need not be Bahrain 9 West Bank 49 registration. complicated. Two procedures—notifica- Lebanon 9 and Gaza tion of a company’s existence and tax Iraq 77 Saudi Arabia streamlined registration registration—suffice. More economies Cost (% of income per capita) procedures. Now entrepreneurs can are finding creative ways to ensure that Least Most complete registration in 1 procedure good rules are implemented in the most Bahrain 0.5 Iraq 75.9 and 1 day at the new one-stop shop efficient way, often learning from one Kuwait 1.0 Lebanon 78.2 in Riyadh. The one-stop shop includes another. Egypt took Ireland’s registration Oman 2.2 Yemen, Rep. 83.0 representatives from several government system as a model. Tunisia 5.7 Comoros 182.1 departments, the chamber of commerce, In reforms worldwide, several fea- United Arab 6.2 Djibouti 195.1 a private bank and the notary public. tures have emerged as the most popular Emirates Moreover, Saudi Arabia eliminated the and effective. Successful reformers often Paid-in minimum capital (% of income per capita) requirement to publish summary articles began by reviewing the need for existing Most of association in the local newspaper. requirements. Instead, they need be published only Comoros 262 GETTING UP TO DATE Oman 274 in the official gazette, at a cost of just Mauritania 450 1,500–3,000 riyals. Creating or improving a one-stop shop Djibouti 500 has been the most popular reform feature Syrian Arab 1,013 Syria reduced the paid-in minimum since 2004. But combining or expediting Republic capital requirement from more than 40 procedures that are antiquated or do Note: Six Arab economies have no paid-in minimum capital times income per capita to about 10 not fulfill their intended purpose makes requirement. times—still the highest in the world. little sense. One example is publication Source: Doing Business database. 12 DOING BUSINESS IN THE ARAB WORLD 2010 CENTRALIZING REGISTRATIONS BOX 2.1 Making it easier to start a business Legally, a company is formed once incor- Many reforms making it easier to start a business in the Arab world since 2004 have porated. In most economies the process reduced or eliminated the minimum capital requirement, the amount that an entre- ends with company registration. But en- preneur has to deposit in a bank account or with a notary before registration of a new trepreneurs usually must also complete company. other procedures, involving multiple Those who continue to believe in the need for this requirement justify it on such agencies. Centralizing registrations— grounds as that it provides protection to creditors and safeguards the company against such as in a one-stop shop—can help. insolvency. But for businesses, the requirement is more than just an additional admin- Such reforms often go hand-in-hand istrative hassle. It means that a small to medium-size company must freeze part of its with introducing a unified registration capital in a bank account. So entrepreneurs do not have all available funding at their form or single company identification disposal, making it more difficult to set up their offices, hire employees, market new number. products and otherwise get their business under way. Since 2004, 6 Arab economies have abolished their minimum capital requirement MAKING SERVICES ELECTRONIC (Egypt, Saudi Arabia, Sudan, Tunisia, the United Arab Emirates and the Republic of Making registration records electronic Yemen) and 2 have reduced it (Morocco and Syria). Five of these 8 countries used to have among the highest minimum capital requirements in the world. Until 2007 Saudi improves data safety, aids transparency Arabia’s was $120,000. and information sharing and makes Despite ongoing reforms, Arab economies have more to do in encouraging new it easier to introduce new online ser- businesses and creating more job opportunities. Despite mixed reforms over the past vices. Online name verification is now few years, Syria still has the highest paid-in minimum capital requirement in the world, common not only among OECD high- at 1,013% of income per capita ($70,660). Besides Syria, 13 other Arab economies still income economies but also increasingly have a minimum capital requirement. Looking to experience in neighboring countries so in Eastern Europe and Central Asia that implemented reforms cutting or eliminating such requirements might be the way and Latin America and the Caribbean. forward. Around 40 economies offer electronic registration services. Implementation varies. In India, Norway and Singapore capital is often withdrawn immediately MAKING REGISTRATION registration is fully electronic. ADMINISTRATIVE after registration—hardly of value in in- solvency. Better securities laws and more Company registration is an administra- efficient courts might offer more protec- tive process. Yet in many economies tion for investors. courts are involved. This takes time and Thirty-five economies have reduced expertise away from resolving commer- or eliminated their minimum capital cial disputes. In a few economies even requirement since 2004. Many of these higher-level approval is needed. As a reformers are in the Arab world. High result, the start-up process takes several minimum capital requirements can dis- months. courage companies from registering. In Egypt in 2006, limited liability compa- STANDARDIZING DOCUMENTS nies accounted for only 19% of registered A more efficient way to ensure that in- firms. In 2008, after reforms, this share corporation documents are legitimate is rose to 30%. to standardize them. The United King- dom did so in 1856. Standardizing in- corporation documents can especially benefit small businesses, because it frees them from the need to consult a lawyer. And simpler documents mean fewer er- rors and omissions—saving hassle for registries and entrepreneurs alike. Dealing with FIGURE 3.1 Dealing with construction permits: construction building a warehouse Rankings are based on 3 subindicators permits Days to build a warehouse As % of income per capita, no bribes included in main city 33.3% 33.3% Time Cost 33.3% Procedures Procedure is completed when final document is received; construction permits, inspections and utility connections included Once entrepreneurs have registered a necessary inspections. They also include will take 30 weeks to construct (exclud- business, what regulations do they face in procedures for obtaining utility con- ing all delays due to administrative and operating it? To measure such regulation, nections, such as electricity, telephone, regulatory requirements). Doing Business focuses on the construc- water and sewerage. The time and cost to In many economies, especially poor tion sector. Construction companies are complete each procedure under normal ones, complying with building regula- under constant pressure: from govern- circumstances are calculated. All official tions is so costly in time and money that ment to comply with inspections and with fees associated with legally completing many builders opt out. Builders may pay licensing and safety regulations and from the procedures are included. Time is bribes to pass inspections or simply build customers to be quick and cost-effective. recorded in calendar days. The survey illegally, leading to hazardous construc- These conflicting pressures point to the assumes that the business is aware of all tion. Where the regulatory burden is trade-off in building regulation—that be- existing regulations and does not use an large, entrepreneurs may tend to move tween protecting people (construction intermediary to complete the procedures their activity into the informal economy. workers, tenants, passersby) and keeping unless required to do so by law. There they operate with less concern for the cost of building affordable. To make the data comparable across safety, leaving everyone worse off. In The indicators on dealing with con- economies, the survey case study includes other economies compliance is simple, struction permits record all procedures detailed assumptions about the business straightforward and inexpensive, yield- officially required for a business in the and the warehouse. The business is a small ing better results. construction industry to build a ware- to medium-size limited liability company house. These include submitting project operating in the construction industry WHO REFORMED IN 2008/09? documents (building plans, site maps) and located in the largest business city. It to the authorities, obtaining all neces- is domestically owned and operated and The Arab world saw its first big surge in sary licenses and permits, completing all has 20 qualified employees. reforms in 2008/09, with 6 economies required notifications and receiving all The warehouse to be built is a new making it easier to deal with construc- TABLE 3.1 construction (there was no previous con- tion permits—Algeria, Bahrain, Egypt, Where is dealing with construction struction on the land) and has complete Jordan, Saudi Arabia and the United permits easy—and where not? architectural and technical plans pre- Arab Emirates. Easiest GLOBAL Most difficult GLOBAL pared by a licensed architect. It will be (AW RANK 1–5) RANK (AW RANK 16–20) RANK connected to electricity, water, sewer- Algeria introduced a new building code Bahrain 14 Syrian Arab 132 age (sewage system, septic tank or their addressing illegal construction in Algiers United Arab 27 Republic equivalent) and one land phone line. The and strengthening enforcement. The new Emirates Sudan 139 connection to each utility network will law requires all construction projects to Qatar 28 Mauritania 154 Saudi Arabia 33 Egypt, Arab Rep. 156 be 32 feet, 10 inches (10 meters) long. have a building permit before work be- Yemen, Rep. 50 West Bank 157 The warehouse will be used for general gins. Violators risk severe penalties. The and Gaza storage, such as of books or stationery. It law also addresses incomplete construc- Note: Rankings are the average of the economy’s rankings on the will not be used for any goods requiring tion projects and noncompliance with procedures, time and cost to comply with formalities to build special conditions, such as food, chemi- existing building regulations. It requires a warehouse. Source: Doing Business database. cals or pharmaceuticals. The warehouse new construction projects to begin within 14 DOING BUSINESS IN THE ARAB WORLD 2010 FIGURE 3.2 port. Thanks to the improvements, the How Arab economies rank on the ease time to obtain a building permit fell from The United Arab Emirates focused on of dealing with construction permits 21 days to 14. improving the online system for approvals Global ranking (1–183) of commercial building permits. Builders HONG KONG, CHINA EASIEST (1) Egypt issued a new construction law in Dubai can now apply for “no objection� that abolished requirements for most certificates, building permits and com- Bahrain United Arab Emirates preapprovals of construction plans before pletion certificates online. The continual 20 Qatar submission of construction permit appli- streamlining has cut 4 procedures and Saudi Arabia cations. This eliminated 3 procedures: 33 days from the process of dealing with 40 Yemen, Rep. obtaining cadastral documents from the construction-related approvals. Comoros survey department, receiving an inspec- 60 Kuwait tion and obtaining project clearance TOWARD SMART REGULATION Jordan from civil defense and obtaining project 80 Iraq clearance from the water authority. Construction regulation should pro- Morocco Djibouti vide incentives for compliance, even 100 Jordan started operating a one-stop when times are hard. Good regulation Tunisia Algeria shop for building permits at the Greater ensures that safety standards are met 120 Lebanon Amman Municipality. In 2008 the one- while encouraging businesses to oper- Oman stop shop began handling building per- ate formally. Builders are more likely to 140 Syrian Arab Republic mit applications for projects in high- comply with regulations when time lim- Sudan density, mixed-use areas, in intensive its are respected, clear guidelines exist Mauritania 160 Egypt, Arab Rep. development corridors and in industrial and authorities are held accountable. West Bank and Gaza zones. In 2009 it also began accepting When regulation is predictable, compa- 183 permit applications for simpler commer- nies spend fewer resources on chasing cial construction projects in commercial TABLE 3.2 1 year of the date of the building per- zones. The one-stop shop has eliminated Who makes dealing with construction mit and introduces fines for construction the need for separate approvals from the permits easy—and who does not? projects not completed within the time water authority, the electricity company Procedures (number) specified by the permit. In the first few and the Ministry of Telecommunica- Fewest Most months after the new law entered into tions. The streamlined procedures have Bahrain 13 Algeria 22 force in July 2008, the Algerian authori- cut 20 days from the time required for Djibouti 14 Egypt, Arab Rep. 25 ties recorded 12,607 infractions related to dealing with construction permits. Iraq 14 Kuwait 25 unlawful construction. Yemen, Rep. 15 Mauritania 25 Saudi Arabia also centralized approvals Oman 16 Syrian Arab 26 Republic Bahrain streamlined procedures at its in a one-stop shop. The Riyadh Munici- municipal one-stop shop. The prelimi- pality consolidated and streamlined the Time (days) nary building approval and the approval permitting procedures for simple struc- Fastest Slowest from the electricity authority were con- tures such as residential villas, ware- Bahrain 43 Iraq 215 solidated, eliminating 1 procedure. A sin- houses and workshops. Requirements United Arab 64 Egypt, Arab Rep. 218 gle application form for building permits for separate letters and preapprovals Emirates Algeria 240 replaced 9 separate application forms have been consolidated into a single Qatar 76 Oman 242 and 15 pieces of supporting documenta- procedure that can be completed in a Tunisia 84 Sudan 271 tion. Applicants can fill out this single day. Builders submit their application Jordan 87 form online and upload all their docu- in person and can pay building permit Cost (% of income per capita) ments and plans. Their application file fees online. If all documents are in order Least Most is forwarded to different departments, and fees are paid, applicants can receive Qatar 0.6 Syrian Arab 540.3 which review it in parallel. More sophis- a temporary building permit in 1 day— United Arab 30.7 Republic ticated monitoring of internal processes and begin building immediately. A more Emirates Jordan 697.1 was also implemented. Daily monitoring thorough review of the application files Saudi Arabia 32.8 Djibouti 948.3 reports are posted on the intranet for takes place after construction has already Algeria 39.6 Tunisia 998.3 review by top management. Engineers started. The final building permit is is- Bahrain 54.6 West Bank 1,110.6 and Gaza who fail to meet internal deadlines are sued within a week. either sanctioned or offered more sup- Source: Doing Business database. DOING BUSINESS TOPICS 15 BOX 3.1 COMMUNICATING WITH STAKEHOLDERS Efficient construction permitting to attract investment Successful reformers involve all relevant Some economies in the Arab world have recently taken steps to make construction actors from the beginning. In Colombia, permitting procedures more efficient and transparent. Egypt, Kuwait, Morocco and the for example, the central government, the Republic of Yemen have all undertaken such reforms in the past 5 years, recognizing that municipality of Bogotá and the private these procedures matter for the growth and expansion of businesses. urban curators in charge of issuing the Yet reform in the region could go further. New reforms would help attract invest- construction permits all needed to be on ment and reduce the development of illegal and unsafe buildings, which can account for board before a new risk-based approval up to 80% of new construction in large cities of the region. Four steps could help ensure scheme could be approved in May 2009. solid, sustainable results. Once the new system is implemented, all Decentralize construction permitting procedures. Local authorities understand parties—from the implementing officials local development needs better than central agencies and can move faster. Economies to the users of the system—must be kept with good practices have fairly decentralized systems, with municipalities or local entities informed of changes or improvements. in charge of enforcing regulations. Several economies in the region could do more in this area. Lebanon’s centralized process for review of permit applications is long, costly and PILOTING REFORMS complex. The Republic of Yemen is taking steps to train building officials in local districts, to allow the gradual transfer to them of the review of applications and building plans. Governments that make construction Shift from public enforcement to practitioner-focused enforcement. The rapid permitting easy are increasingly adopt- pace of urban development in the region has left agencies with a growing backlog of ing risk-based approval mechanisms. building permit applications. The results are apparent: delays, higher costs for investors Many start by piloting reforms to as- and greater opportunities for rent seeking. Facing similar challenges, most OECD econo- sess their effectiveness before full-scale mies have chosen to rely on private engineers and architects, qualified under carefully implementation. designed accreditation systems, to carry out technical reviews and inspections. Learning Some economies pilot reforms in from this experience, Egypt has created a role for private engineers. Pilot initiatives in specific zones to isolate any potential the Republic of Yemen (Sana’a) and Morocco (Fes) should also offer useful lessons. damage. Egypt began piloting one-stop Continue to simplify procedures. Once new building codes define a transparent, shops in 3 districts of Cairo in 2007. comprehensive set of technical requirements, reforms can introduce shorter, clearer pro- The early trial of the one-stop shops cedures. Fast-track procedures for projects posing no risks to the community and better helped pave the way for the new building information and processing tools for applicants can do much to help reduce informal code passed the following year and the construction and attract investment. streamlining of procedures in 2009. Embed construction permitting reforms in a broader land reform initiative. Others pilot new building approval Reforms in construction permitting will have limited effects if not supported by the processes by focusing only on certain modernization of land titling and cadastral systems. But land reforms in the region have types of projects. In Jordan the Greater proceeded slowly. Bringing transparency and clarity to land issues is critical to guaran- Amman Municipality began by process- teeing efficient construction permitting at a minimal cost for investors. ing larger, more complex applications, reasoning that larger companies that had suffered the most from burdensome applications and paying bribes and more IDENTIFYING AREAS OF OVERLAP regulations could provide the best input AMONG AGENCIES on meeting project deadlines and obtain- for improving the system. Conversely, ing financing. Dealing with construction permits in- Saudi Arabia adopted the 1-day permit- Since 2004 Doing Business has re- volves multiple agencies and levels of ting procedure first for low-risk residen- corded 11 reforms making it easier to approval—more than in any other area of tial villas before extending the system to deal with construction permits in the regulation studied by Doing Business. To riskier projects such as warehouses and Arab world, implemented by 9 econo- obtain all construction-related approvals workshops. mies. Worldwide, governments that reg- and connect to utilities, builders around ulate construction efficiently often take the world deal with 9 different agencies USING INTERNAL MONITORING TO a systematic approach in their reforms. on average. Understanding how these MATCH DEMAND They identify areas of overlap among agencies interact with one another and Implementing reforms requires flex- agencies, consult widely with stakehold- identifying areas of overlap is often the ibility and continual monitoring of new ers, opt for risk-based approval systems first step toward speeding up approvals systems. and introduce internal monitoring sys- while maintaining quality control. Monitoring the entire process allows tems in their agencies. building authorities to identify bottle- necks, ensure better quality and allocate resources more efficiently. In Bahrain 16 DOING BUSINESS IN THE ARAB WORLD 2010 the municipal one-stop shop’s technical support team prepares daily monitoring reports and posts them on the internal server for review by top management. If a permit is delayed because there are too few structural engineers, for example, managers can assign more to the task. Diligent monitoring of reforms gives policy makers the information they need to match their capacity to the demands of applicants. And it ensures that their reform efforts continue to have impact for years to come. Employing FIGURE 4.1 Employing workers: rules on hiring, workers work schedules and redundancy Rankings are based on 4 subindicators Fixed-term contracts, Nonstandard work minimum wage schedules, paid regulations vacation days 25% 25% Difficulty Rigidity of hiring of hours index index 25% 25% Difficulty of Redundancy redundancy cost index As weeks Mandatory legal of salary; includes requirements on dismissals notice period and for economic reasons severance payments Economies worldwide have established measures. No economy can achieve a bet- sures the cost of advance notice require- systems of laws and institutions intended ter score by failing to comply with these ments, severance payments and penal- to protect workers and guarantee a mini- conventions. ties due when terminating a redundant mum standard of living for the popula- Two measures are presented: a rigid- worker, expressed in weeks of salary. tion. These systems generally encompass ity of employment index and a redundancy To make the data comparable across 4 bodies of law: employment, industrial cost measure. The rigidity of employment economies, a range of assumptions about relations, social security and occupa- index is the average of 3 subindices: the worker and the company are used. The tional health and safety laws. company is a limited liability corporation Employment laws are needed to Difficulty of hiring index, which mea- that operates in the manufacturing sector, allow efficient contracting between em- sures the flexibility of contracts and is located in the largest business city, is ployers and workers and to protect work- the ratio of the minimum wage to the 100% domestically owned and has 60 em- ers from discriminatory or unfair treat- value added per worker. ployees. The company is subject to collec- ment. Doing Business, in its indicators on Rigidity of hours index, which covers tive bargaining agreements in economies employing workers, focuses on one area restrictions on weekend and night in which such agreements cover more of employment regulation. The indicators work, requirements relating to work- than half the manufacturing sector and measure flexibility in the regulation of ing time and the workweek—taking apply even to firms not party to them. hiring, working hours and redundancy in into account legal provisions that Governments all over the world a manner consistent with the conventions refer specifically to small to medium- face the challenge of finding the right of the International Labour Organization size companies in manufacturing ac- balance between worker protection and (ILO). An economy can have the most tivities in which continuous operation labor market flexibility. But in developing flexible labor regulations as measured is economically necessary—and man- economies especially, regulators often err by Doing Business while ratifying and dated days of annual leave with pay. to one extreme, pushing employers and complying with all conventions directly Difficulty of redundancy index, which workers into the informal sector. Analysis relevant to the areas that Doing Business covers workers’ legal protections across economies shows that while em- TABLE 4.1 against redundancy dismissal, includ- ployment regulation generally increases Where is it easy to employ workers— ing the grounds permitted for redun- the tenure and wages of incumbent work- and where not? dancy dismissal and procedures for ers, overly rigid regulations may have Easiest Most difficult GLOBAL GLOBAL redundancy dismissal (individual and undesirable side effects. These include (AW RANK 1–5) RANK (AW RANK 16–20) RANK collective)—notification and approval less job creation, smaller company size, Bahrain 13 West Bank 135 requirements, retraining or reassign- less investment in research and develop- Oman 21 and Gaza Djibouti 151 ment obligations and priority rules ment, and longer spells of unemployment Kuwait 24 United Arab 50 Sudan 153 for redundancies and reemployment. and thus the obsolescence of skills, all of Emirates Comoros 164 which may reduce productivity growth. Jordan 51 Morocco 176 Each index takes values between 0 and With the global financial and eco- Note: Rankings are the average of the economy’s rankings on the 100, with higher values indicating more nomic crisis, unemployment has risen difficulty of hiring, rigidity of hours, difficulty of redundancy and redundancy cost indices. rigid regulation. sharply around the world. This makes the Source: Doing Business database. The redundancy cost indicator mea- need for governments to adopt policies 18 DOING BUSINESS IN THE ARAB WORLD 2010 FIGURE 4.2 the Arab world, in Djibouti. TABLE 4.2 How Arab economies rank on In searching for the right balance Who makes employing workers easy— the ease of employing workers and who does not? between flexibility and protection, re- Global ranking (1–183) Rigidity of employment index (0–100) formers can look to the experience of economies around the world. The follow- Least Most AUSTRALIA EASIEST (1) Bahrain ing measures are examples of reforms Kuwait 0 Comoros 40 aimed at increasing flexibility without United Arab 7 Tunisia 40 Oman Emirates 20 Algeria 41 Kuwait compromising protection. Bahrain 10 Djibouti 46 United Arab Emirates 40 Oman 13 Morocco 60 Jordan ALLOWING FLEXIBLE WORK HOURS Qatar 13 Iraq Laws restricting working hours were cre- 60 Lebanon Redundancy cost (weeks of salary) ated to protect employees. But they also Qatar Least Most Saudi Arabia limit the ability of firms to adjust for fluc- 80 Yemen, Rep. tuations in seasonal demand—and can Iraq 0 Morocco 85 Syrian Arab Republic take work away from willing workers. Bahrain 4 West Bank 91 100 Oman 4 and Gaza Tunisia To mitigate this risk, most economies Egypt, Arab Rep. Jordan 4 Comoros 100 permit greater flexibility in activities in 120 Algeria Yemen, Rep. 17 Sudan 118 which continuous operation is economi- Egypt, Arab Rep. 132 Mauritania cally necessary. More than half the econ- 140 West Bank and Gaza Note: The rigidity of employment index is the average of the omies in the Doing Business sample allow difficulty of hiring index, rigidity of hours index and difficulty of Djibouti Sudan the averaging of hours. redundancy index. Source: Doing Business database. 160 Comoros Morocco PROMOTING YOUTH EMPLOYMENT tween jobs with well-established unem- 183 Young people are disproportionately af- ployment assistance programs. Denmark fected by rigid employment regulation. and New Zealand combine flexible labor that stimulate job creation even more Lack of training and experience is already regulations with unemployment protec- pressing. At the same time, adequate an obstacle to finding a first job; burden- tion schemes. safety nets have to be in place to protect some regulation and high redundancy Things can be different in develop- workers from sudden job loss, help them costs can further deter potential employ- ing economies. Many lack the financial in the transition between jobs and pre- ers. One measure used to encourage the resources and administrative capacity to vent people from slipping into poverty. hiring of young people is to introduce provide comprehensive unemployment This year Doing Business has intro- apprentice wages. These allow businesses insurance. Not surprisingly, mandatory duced changes to the employing work- to hire first-time employees for a portion severance payments remain the preva- ers indicators to take account of the —typically 75%—of the mandatory mini- lent form of insurance against unemploy- existence of safety nets—whether in the mum wage for a short period. ment. But many developing economies form of unemployment benefits or sever- Apprentice contracts and trial pe- may err on the side of excessive rigidity. ance pay—for both permanent and tem- riods are also used to promote the hir- Severance pay in cases of redundancy porary workers in cases of redundancy ing of young people. First-time workers sometimes even exceeds the typical un- for economic reasons.1 without experience get an opportunity employment benefits in rich economies. to receive training while earning an in- In addition, many impose strict pro- WHO REFORMED IN 2008/09? come. Having invested in training these cedural requirements for redundancy workers, employers have a greater in- of one or more workers for economic No major reforms in employment regula- centive to hire them. Allowing the use reasons—such as prior approval by the tion were recorded in the Arab world in of fixed-term contracts for permanent labor authority, as in the Republic of 2008/09. tasks can provide another point of entry Congo, Gabon and Nepal. and an incentive for employers to create Such requirements are created with TOWARD SMART REGULATION jobs. good intentions—to protect workers from abuse or to provide a safety net Since 2004 Doing Business has recorded SHIFTING FROM SEVERANCE PAY TO in case of sudden job loss. But when it 88 reforms affecting the employing work- UNEMPLOYMENT INSURANCE comes to making employment decisions ers indicators. Of these, 54 made regula- Italy, Norway and Singapore have no for economic reasons, these require- tion more flexible, 34 more rigid. One statutory minimum for severance pay- ments can give the authorities—not em- reform, increasing rigidity, took place in ments and aid workers in transition be- ployers—the discretion. And excessive DOING BUSINESS TOPICS 19 costs can deter employers from hiring workers in the first place. Reducing the complexity and costs of dismissals for economic reasons is a first step toward encouraging formal job creation. 1. The assumption for the standardized case study was changed to refer to a small to medium-size company with 60 employees rather than 201. The scope of the question on night and weekly holiday work has been limited to manufacturing activities in which continuous opera- tion is economically necessary. Legally mandated wage premiums for night and weekly holiday work up to a threshold are no longer considered a restriction. In addition, the calculation of the minimum wage ratio was modified to ensure that an economy would not benefit in the scor- ing from lowering the minimum wage to below $1.25 a day, adjusted for purchas- ing power parity. This level is consistent with recent adjustments to the absolute poverty line. Finally, the calculation of the redundancy cost was adjusted so that having severance payments or unemploy- ment protections below a certain thresh- old does not mean a better score for an economy. Registering FIGURE 5.1 Registering property: transfer of property property between 2 local companies Rankings are based on 3 subindicators Days to transfer property As % of property value, in main city no bribes included 33.3% 33.3% Time Cost 33.3% Procedures Steps to check encumbrances, obtain clearance certificates, prepare deed and transfer title so that the property can be occupied, sold or used as collateral Formal property titles help promote the name. The property of land and building registry, the cadastre or both and is free transfer of land, encourage investment will be transferred in its entirety. The of all disputes. and give entrepreneurs access to formal transaction is considered complete when Efficient property registration re- credit markets. But a large share of prop- the buyer can use the property as collat- duces transactions costs and helps to erty in developing economies is not for- eral for a bank loan. formalize property titles. Simple proce- mally registered. Informal titles cannot Local property lawyers and officials dures to register property are also as- be used as security in obtaining loans, in property registries provide informa- sociated with greater perceived security which limits financing opportunities for tion on required procedures as well as of property rights and less corruption. businesses. Many governments have rec- the time and cost to complete each one. That benefits all entrepreneurs, espe- ognized this and started extensive prop- For most economies the data are based cially women, the young and the poor. erty titling programs. But bringing assets on responses from both. Based on the The rich have few problems protecting into the formal sector is only part of the responses, 3 indicators are constructed: story. The more difficult and costly it is Number of procedures to register FIGURE 5.2 to formally transfer property, the greater property. How Arab economies rank on the chances that formalized titles will Time to register property (in calendar the ease of registering property Global ranking (1–183) quickly become informal again. Elimi- days). nating unnecessary obstacles to register- Official costs to register property (as a SAUDI EASIEST (1) ARABIA ing and transferring property is therefore percentage of the property value). Saudi Arabia important for economic development. To make the data comparable across 20 United Arab Emirates Doing Business records the full se- economies, the survey uses a case study Oman quence of procedures necessary for a with assumptions about the buyer, the Bahrain business (buyer) to purchase a property seller and the property. The buyer and 40 Sudan from another business (seller) and to seller are limited liability companies, Yemen, Rep. transfer the property title to the buyer’s privately owned by nationals (no foreign 60 Iraq ownership) and located in the periurban Qatar TABLE 5.1 Tunisia Where is it easy to register property— area of the largest business city. Both 80 West Bank and Gaza and where not? conduct general commercial activities. Mauritania Easiest GLOBAL Most difficult GLOBAL The property consists of land with 100 Syrian Arab Republic (AW RANK 1–5) RANK (AW RANK 16–20) RANK an area of 557.4 square meters (6,000 Egypt, Arab Rep. Saudi Arabia 1 Jordan 106 square feet) and a 2-story warehouse 120 Kuwait United Arab 7 Lebanon 111 with a total area of 929 square meters Comoros Emirates Morocco 123 Jordan (10,000 square feet). It is located in the 140 Oman 20 Djibouti 140 Lebanon periurban commercial zone of the larg- Bahrain 22 Algeria 160 Morocco Sudan 37 est business city, has a value equal to 50 160 Djibouti times income per capita and has been Algeria Note: Rankings are the average of the economy’s rankings on the procedures, time and cost to register property. owned by the seller for the past 10 years. 183 Source: Doing Business database. The property is registered in the land DOING BUSINESS TOPICS 21 their property rights. They can afford the process is generally more cumber- TABLE 5.2 Who makes property registration easy— to invest in security systems and other some. More steps are required because and who does not? measures to defend their property. But payments must be made to different Procedures (number) small entrepreneurs cannot. Reform can agencies and tax assessments may have change this. to be obtained. Higher costs encourage Fewest Most informal transactions and underreport- United Arab 1 Kuwait 8 Emirates Lebanon 8 WHO REFORMED IN 2008/09? ing of property values. And cumbersome Bahrain 2 Morocco 8 processes can create incentives for the Oman 2 Qatar 10 Three economies in the Arab world had payment of bribes. Saudi Arabia 2 Algeria 11 reforms making it easier to register prop- An alternative approach is to charge Tunisia 4 erty in 2008/09: Algeria, Jordan and West fixed fees, independent of the property Time (days) Bank and Gaza. value. Seventeen economies in the Doing Business sample do so, including Egypt Fastest Slowest Algeria made it less costly to register and Saudi Arabia. Another alternative Saudi Arabia 2 Algeria 47 property, introducing a new notary fee is to lower fees charged as a percentage United Arab 2 Morocco 47 Emirates Mauritania 49 schedule that cut notary fees by 0.4% of of the property value. Many economies Iraq 8 Kuwait 55 the property value. It also eliminated the have done this since 2005. But more than Sudan 9 Egypt, Arab Rep. 72 capital gains tax—and thus the need for 40 economies still have transfer taxes of Oman 16 the tax authority to determine the true more than 6% of the property value. In Cost (% of property value) value of the property for tax purposes. Syria taxes and fees exceed 20% of the That means 3 fewer procedures for regis- property value. Least Most tering property. Reducing taxes and fees removes Saudi Arabia 0.0 Jordan 7.5 some of the incentives to underreport Qatar 0.3 Iraq 7.7 Jordan announced a temporary, property values and promotes formal Kuwait 0.5 Djibouti 13.2 West Bank 0.7 Comoros 20.8 6-month reduction in property transfer registration of transactions. It can also and Gaza Syrian Arab 28.0 fees from 10% of the property value to ease the burden on governments trying Egypt, Arab Rep. 0.9 Republic 7.5% in May 2009. Moreover, it made a to detect cheaters. Switching to lower Source: Doing Business database. temporary exemption from registration or fixed fees makes it faster and easier fees permanent for all apartments of less to transfer property while reducing un- their tax payment verified and obtain than 120 square meters. derreporting of property values. It also clearance from the cadastral office at the means that the capital gains and prop- one-stop shop. They don’t even need to West Bank and Gaza’s land registry erty taxes collected later will be based worry about the notarization require- in Ramallah has been computerizing its on more realistic property values. And ment; representatives of the land registry records with the help of a World Bank reducing taxes does not necessarily mean have the same legal powers as notaries. project for the past 3 years. The project, reducing revenues. Egypt reduced fees completed in December 2008, cut 15 yet saw total revenues stay almost steady EASING ACCESS TO THE REGISTRY days from average processing times at or even rise, thanks to an increase in Easy access to information in the prop- the registry. Property registration now transactions. erty registry helps reduce the time spent takes 47 days. on lengthy and costly due diligence to SIMPLIFYING AND COMBINING verify ownership, encumbrances and TOWARD SMART REGULATION PROCEDURES other required documentation. Where Simple measures such as reducing the the internet is widely available, allow- Since 2004 Doing Business has recorded number of documents can save entre- ing online access to information is an 16 reforms easing property registration preneurs and officials valuable time and effective way to reduce the time and cost in 9 Arab economies. These reformers resources. Establishing one-stop shops to obtain documents. But many econo- join many others worldwide, with the can ease the burden on entrepreneurs mies that have electronic records for en- largest share focusing on reducing taxes by enabling them to deal with multiple cumbrances make the records available and fees. payments and registrations all in one online only to authorized parties such place. After simplifying and combining as notaries or lawyers. Many others, in- SIMPLIFYING AND LOWERING FEES procedures, government agencies can go cluding Tunisia, still require a visit to the Many economies impose multiple taxes a step further by linking their systems to land registry, because certificates can be and fees for property registration. In exchange information. obtained only in person; in some cases these economies not only are costs higher; In Belarus entrepreneurs can get computers are available for searches. 22 DOING BUSINESS IN THE ARAB WORLD 2010 Where a personal visit to the registry is still necessary, decentralizing offices of the land registry or adding new ones can reduce backlogs and facilitate access to the registry. Increasing administra- tive efficiency at the registry is another way to reduce delays for entrepreneurs. Introducing time limits—a necessary benchmark to measure registries’ per- formance—can help. So can hiring more staff. Another option is to establish fast- track procedures at a higher cost. This helps people who need speedier registra- tion and are willing to pay for it—and allows the registry to prioritize its work. COMPUTERIZING THE REGISTRY Transferring property records from paper to a digital system speeds up processing. In economies with computerized regis- tries it takes only half as long to transfer property as it does in those with paper- based systems. Electronic processing can also improve title security, by making it easier to identify errors and overlapping titles. And digital records can be backed up and maintained more easily than paper ones. Going electronic can also in- crease registrations. West Bank and Gaza is among the economies that have started to reap the benefits of years of computer- ization efforts at their registries. Technology is not always the ulti- mate solution. In low-income economies particularly, if paper records are inac- curate, making them electronic will not help. The focus should be first on im- proving the efficiency of current services and the accuracy of the registry. Getting FIGURE 6.1 Getting credit: collateral rules credit and credit information Rankings are based on 2 subindicators Regulations on 62.5% nonpossessory of Strength 33% security interests 33% legal rights index in movable (0–10) property 37.5% 33% Depth of credit information index Scope, quality and (0–6) accessibility of credit information through public and private credit registries Note: Private bureau coverage and public registry coverage are measured but do not count for the rankings. Firms consistently rate access to credit Public registry coverage, which agreements and in registration docu- as among the greatest barriers to their reports the number of individuals ments, so that all types of debts and operation and growth. Doing Business and firms covered by a public credit obligations can be secured by stating constructs 2 sets of indicators of how registry as a percentage of the adult a maximum rather than a specific well credit markets function: one on population. amount between the parties? the sharing of credit information and Private bureau coverage, which Is a collateral registry in operation the other on legal rights of borrowers reports the number of individuals that is unified geographically and by and lenders. Credit registries, institu- and firms covered by a private credit asset type as well as being indexed by tions that collect and distribute credit bureau as a percentage of the adult the name of the grantor of a security information on borrowers, can greatly population. right? expand access to credit. By sharing credit The strength of legal rights index mea- Are secured creditors paid first when information, they help lenders assess risk sures the degree to which collateral and a debtor defaults outside an insol- and allocate credit more efficiently. They bankruptcy laws protect the rights of vency procedure? also free entrepreneurs from having to borrowers and lenders. Ten points relat- Are secured creditors paid first when rely on personal connections alone when ing to nonpossessory security interests in a business is liquidated? trying to obtain credit. movable property are analyzed: Are secured creditors subject to an Three indicators are constructed to Can a business use movable assets as automatic stay or moratorium on en- measure the sharing of credit information: collateral while keeping possession of forcement procedures when a debtor Depth of credit information index, the assets, and can any financial insti- enters a court-supervised reorganiza- which measures rules affecting the tution accept such assets as collateral? tion procedure? scope, quality and accessibility of in- Does the law allow a business to grant Does the law allow parties to agree in formation available through public or a nonpossessory security right in a a collateral agreement that the lender private credit registries. single category of revolving movable may enforce its security right out of TABLE 6.1 assets, without requiring a specific court? Where is getting credit easy— description of the secured assets? To ensure that data measuring legal and where not? Does the law allow a business to grant rights are comparable across economies, Easiest GLOBAL Most difficult GLOBAL a nonpossessory security right in the survey uses a case study with a (AW RANK 1–5) RANK (AW RANK 16–20) RANK substantially all of its assets, without range of assumptions about the debtor Saudi Arabia 61 Comoros 167 requiring a specific description of the and creditor. The debtor is a private, Egypt, Arab Rep. 71 Iraq 167 secured assets? limited liability company that has its United Arab 71 West Bank 167 Emirates and Gaza Can a security right extend to future headquarters and only base of operations Bahrain 87 Djibouti 177 or after-acquired assets and extend in the largest business city and obtains a Kuwait 87 Syrian Arab 181 automatically to the products, pro- loan from a local bank (the creditor) for Republic ceeds or replacements of the original an amount up to 10 times income per Note: Rankings on the ease of getting credit are based on the assets? capita. Both the debtor and the creditor sum of the strength of legal rights index and the depth of credit information index. Is a general description of debts and are 100% domestically owned. Source: Doing Business database. obligations permitted in collateral 24 DOING BUSINESS IN THE ARAB WORLD 2010 WHO REFORMED IN 2008/09? BOX 6.1 Expanding credit information Three economies in the Arab world had The Arab world has an opportunity to develop its credit reporting. In the past 5 years reforms improving their credit informa- almost every economy in the region has established some kind of public or private credit tion system in 2008/09: Egypt, Morocco reporting system. Unlike in other regions, central banks play a major role, either operat- and the Republic of Yemen. ing the credit registry directly or regulating credit reporting. And the consumer credit culture is much less developed than in other regions. Egypt’s private credit bureau expanded Morocco is an interesting case. While granting credit to potential bad payers is the range of information distributed and a crucial mistake for financial institutions, rejecting potential good customers is even worse. But until 2005 that was exactly what was happening in the Moroccan credit added retailers to its database. industry. Credit information was scarce, outdated, incomplete and unreliable, making it impossible for lenders to make sound lending decisions. That led to high rejection rates, Morocco introduced a private credit massive red tape for established customers, poor access to credit for the rest and peren- bureau, Experian Maroc, which replaced nial requirements for collateral. Predictably, and despite the stiff loan approval process, the public registry and expanded cover- nonperforming loans skyrocketed, generating uneasiness in the credit community and age. The credit bureau, which started at the central bank, Bank Al-Maghrib. operations in March 2009, collects But difficult situations can generate visionary reforms. The Moroccan central monthly information from banks and bank undertook a radical revamping of its aged credit registry while deciding to si- other financial institutions through the multaneously establish a private credit reporting system through an approach based on central bank. It collects both positive and delegation. This approach, suggested by IFC, would replicate credit information sharing negative information on individuals and systems operating in such Latin American countries as Bolivia, Ecuador and Peru— firms and has no minimum threshold innovative systems that had proved to be effective and were valued for their operational for loans included in the database. Data simplicity. are preserved for 5 years. By the end In Morocco’s new system all supervised entities (banks, nonbank financial institu- of May 2009 the database had 1.8 mil- tions, microfinance institutions) are required to supply the central bank with full data lion credits registered—and by the end on all loans on a monthly basis. The central bank consolidates the data and provides of June, 3 million. An amendment to a the same information to all licensed credit bureaus. The system avoids information circular guarantees individuals and firms monopolies, which have proved to be deleterious elsewhere. Instead, it ensures the free the right to view their information. flow of information to all lending institutions, regardless of how much information they provide, protecting less powerful lending sectors such as microfinance. It establishes The Republic of Yemen issued circu- clear rights for borrowers as well as clear responsibilities for lenders. lars removing the minimum threshold By delegating the distribution of credit information to the private sector, the central for loans included in the database and bank implicitly recognized that someone else could do the job better—and freed itself to guaranteeing the right of borrowers to focus on its much more important role of supervision. inspect their credit reports. In addition, the country’s central bank now has a CREATING A CREDIT BUREAU credit information system—a gift from credit bureau law or amendments to ex- the central bank of the United Arab Emir- Establishing a credit bureau need not be isting banking and data protection laws. ates, which also contributed to training expensive. Costs range from $500,000 In many economies credit bureaus and helped launch operations. The sys- to $3 million, depending on the systems have the capacity to collect more infor- tem began operating in June 2009 and already in place and the readiness of the mation but lack the legal backing to do now receives credit information from all banking sector. Most of the costs can so. While economies in the Middle East banks operating in the country. be recovered within a couple of years. and North Africa share the same amount But getting started can often take time. of credit information on average as those TOWARD SMART REGULATION According to experts, it takes 12–24 in Latin America and the Caribbean do, months for a credit bureau to begin their coverage rates are lower. One rea- Since 2004 Doing Business has recorded operations—from developing a business son for the difference could be the legal 2 reforms strengthening the legal rights plan to issuing the first reports. structure affecting the credit bureaus of borrowers and lenders in 2 Arab econ- Setting up the credit bureau is only and the information that credit bureaus omies—and 17 reforms improving credit a part of any reform. Reformers need to are allowed to collect and distribute. In information systems in 8 Arab econo- create the regulatory framework that will the Middle East and North Africa only mies. Worldwide, many such reforms allow the sharing of data and foster trust 21% of economies have credit bureaus have created credit bureaus. in the system by both banks and borrow- that share information from utilities and ers. This often requires adopting a new retailers, while in Latin America and the DOING BUSINESS TOPICS 25 FIGURE 6.2 TABLE 6.2 not be costly. Guatemala recently estab- How Arab economies rank on Who has the most credit information lished a paper-based registry that also the ease of getting credit and the most legal rights for borrowers and lenders—and who the least? functions online. The reform process, Global ranking (1–183) Borrowers covered by credit registries which included the adoption of a new (% of adults) secured transactions law, took several MALAYSIA EASIEST (1) Most Least years. The initial budget to operate the Saudi Arabia new registry was $86,500. Egypt, Arab Rep. Bahrain 34.9 Jordan 1.05 20 The total cost of establishing a new United Arab Emirates Kuwait 30.4 Algeria 0.22 Bahrain Tunisia 19.9 Yemen, Rep. 0.22 legal framework with an online collateral 40 Kuwait Saudi Arabia 17.9 Djibouti 0.21 registry—including diagnostic and legal Lebanon Oman 17.0 Mauritania 0.16 review, software, hardware, hosting and 60 Morocco Legal rights for borrowers and lenders maintenance, along with international Tunisia (strength of legal rights index, 0–10) consulting during the entire process— Jordan 80 Most Least can amount to about $350,000 or more. Oman Algeria Sudan 5 Egypt, Arab Rep. 3 Reformers in the Dominican Republic 100 Qatar Bahrain 4 Yemen, Rep. 2 expect a cost of $354,500 for such a com- Sudan Jordan 4 Djibouti 1 prehensive reform. 120 Mauritania Kuwait 4 Syrian Arab 1 Yemen, Rep. Oman 4* Republic Comoros West Bank 0 140 and Gaza Iraq West Bank and Gaza * Saudi Arabia and the United Arab Emirates also score 4 on the 160 strength of legal rights index. Djibouti Note: The rankings on borrower coverage reflected in the table in- Syrian Arab Republic clude only Arab economies with public or private credit registries 183 (15 in total). Another 5 Arab economies have no credit registry and therefore no coverage. Source: Doing Business database. Caribbean 59% do. Including credit information from Economies as diverse as Cambodia, retailers and utility companies such as Guatemala, the Federated States of Mi- electricity providers and mobile phone cronesia and Rwanda have implemented companies is an effective way to increase new legal frameworks in recent years. coverage. But this is among the harder Such legal changes often do not require aspects to reform because these com- large investments. The Dominican Re- panies often are regulated by different public, for example, estimates that it will institutions than financial companies are. spend about $68,500 on evaluating its Worldwide, only 40% of bureaus include existing secured transactions system and information from such sources. Yet posi- developing a new regulatory framework. tive information on payment of electricity Rwanda invested $55,320 in validation and phone bills can help establish a good and translation of its new law as well as credit history for those who need it the in the legislative process, excluding tech- most—women and youth, many of whom nical assistance from donors. have had no contact with the banking The experience of earlier reformers sector. shows that such reform is well worth the effort. Where the law allows movable REFORMING SECURED goods to be used as collateral, companies TRANSACTIONS LAWS take advantage of this possibility. Sound secured transactions laws allow businesses to use their assets—including SETTING UP A COLLATERAL REGISTRY movable assets such as machinery or ac- Where the necessary legal framework is counts receivable—as security to gener- in place, well-functioning collateral reg- ate capital for expansion. The ability to istries are needed so that companies can use such assets is particularly important take advantage of the law and get access for small and medium-size enterprises, to credit. Results can show quickly, and which may not own land or buildings. creating a new collateral registry need Protecting FIGURE 7.1 Protecting investors: minority shareholder investors rights in related-party transactions Rankings are based on 3 subindicators Requirements on approval Liability of CEO and disclosure of and board of directors related-party in a related-party transactions 33.3% transaction 33.3% Extent Extent of of director disclosure liability index index 33.3% Ease of shareholder suits index Type of evidence that can be collected before and during the trial Companies grow by raising capital, ei- a director and the majority shareholder or derivative suits and the ability to ther through a bank loan or by attracting of a public company, proposes that the require Mr. James to pay back his per- equity investors. Selling shares allows company purchase used trucks from an- sonal profits from the transaction. companies to expand without the need other company that he owns. The price Ease of shareholder suits index, which to provide collateral and repay bank is higher than the going price for used covers the availability of documents loans. But investors worry about their trucks. The transaction goes forward. that can be used during trial, the money—and look for laws that protect All required approvals are obtained, and ability of the investor to examine the them. One study finds that the pres- all required disclosures made, though defendant and other witnesses, share- ence of legal and regulatory protections the transaction is prejudicial to the pur- holders’ access to internal documents for investors explains up to 73% of the chasing company. Shareholders sue the of the company, the appointment of an decision to invest. In contrast, company interested parties and the members of inspector to investigate the transaction characteristics explain only between 4% the board of directors. and the standard of proof applicable to and 22%.1 Good protections for minority Several questions arise: Who ap- a civil suit against the directors. shareholders are associated with larger proves the transaction? What informa- These 3 indices are averaged to create the and more active stock markets. Thus tion must be disclosed? What company strength of investor protection index. All both governments and businesses have documents can investors access? What indices range from 0 to 10, with higher an interest in reforms strengthening in- do minority shareholders have to prove values indicating more protections or vestor protections. to get the transaction stopped or to re- greater disclosure. To document some of the protec- ceive compensation from Mr. James? tions that investors have, Doing Busi- On the basis of the answers to these WHO REFORMED IN 2008/09? ness measures how economies regulate and other questions, 3 indices of investor a standard case of self-dealing: use of protection are constructed: Tunisia was the only economy in the corporate assets for personal gain. The Extent of disclosure index, which Arab world to strengthen investor pro- case facts are straightforward. Mr. James, covers approval procedures, require- tections in 2008/09. ments for immediate disclosure to the . TABLE 7.1 public and shareholders of proposed Tunisia aimed to increase the transpar- Where are investors protected—and where not? transactions, requirements for dis- ency of companies’ activities, and the par- Most protected Least protected GLOBAL closure in periodic filings and reports liament amended the company law (Code GLOBAL (AW RANK 1–5) RANK (AW RANK 16–20) RANK and the availability of external review des Sociétés Commerciales) accordingly Saudi Arabia 16 Yemen, Rep. 132 of transactions before they take place. in March 2009. The new provisions re- Kuwait 27 Mauritania 147 Extent of director liability index, quire approval of related-party transac- West Bank 41 Sudan 154 which covers the ability of investors to tions by both the board of directors and a and Gaza Morocco 165 hold Mr. James and the board of direc- shareholders meeting. Interested parties Bahrain 57 Djibouti 178 Algeria 73 tors liable for damages, the ability to are no longer allowed to participate in rescind the transaction, the availability the approval process. In addition, the Note: Rankings are based on the strength of investor protection index. of fines and jail time associated with law requires review of the terms of such Source: Doing Business database. self-dealing, the availability of direct transactions by an independent auditor. DOING BUSINESS TOPICS 27 TOWARD SMART REGULATION disclose the nature and amount of the FIGURE 7.2 transaction, explain the potential conflict How Arab economies rank on protecting investors Since 2004 Doing Business has recorded of interest in detail and provide any other Global ranking (1–183) 5 reforms to strengthen investor protec- relevant information that could help the tions in 3 Arab economies. Economies board or shareholders come to an in- NEW ZEALAND MOST PROTECTED (1) that rank high on the strength of investor formed decision. Saudi Arabia protection index protect minority inves- But reformers need to watch out for Kuwait 20 tors from self-dealing through stronger potential legal loopholes allowing parties West Bank and Gaza disclosure requirements, clear duties for to bypass disclosure requirements. One Bahrain 40 directors and easy access to corporate signal: references in laws to the “ordinary Algeria information. course of business.� Economies such as Egypt, Arab Rep. Examples are New Zealand, Sin- Switzerland require extensive disclosure 60 Tunisia Lebanon gapore and the United Kingdom. These of related-party transactions. But if a 80 Oman economies also have efficient, respon- transaction is conducted as part of the Qatar sive judicial systems—without which company’s “day-to-day activities,� the Iraq good laws would have little impact on disclosure provisions do not apply. Nei- 100 Jordan investor protections. ther legislation nor case law adequately Syrian Arab Republic But many economies still offer mi- defines the “ordinary course of business.� 120 United Arab Emirates nority investors only partial protections Often, any transaction could fit the ex- Comoros 140 Yemen, Rep. through the laws or the judicial system. ception, so disclosure requirements are Mauritania While economies such as Bulgaria have of little use. Sudan extensive disclosure and approval re- 160 Morocco quirements, for example, they lack clear SPELLING OUT APPROVAL PROCESSES Djibouti rules regulating the liability of directors. Reformers who want to require approval 183 And while economies like the United of related-party transactions have 2 op- Arab Emirates have clear, rigorous rules tions: approval by the board of directors regulating the liability of directors, they (or supervisory board) or by the share- rules and duties because they are fi- lack such rules for regulating the disclo- holders. Either way, interested directors duciaries. If they manage the business sure of related-party transactions and should not be allowed to participate in properly, they are rewarded. If they fail access to internal corporate information. the process—or should not have their to do so, they are responsible for the How do economies fill the gaps? votes counted. consequences. Reforms worldwide over the past 5 years In economies with large corpora- When regulating directors’ duties, show some common patterns. tions, modern legal systems and good governments generally follow 1 of 2 communications infrastructure, such as paths. Either they set out in the law a BROADENING DISCLOSURE France and Singapore, shareholder ap- detailed catalogue of rights and duties REQUIREMENTS proval is the preferred route. But in econ- for company directors. Or they create a Reforms aimed at increasing market omies with smaller companies and fewer special regime of liability for directors in transparency have focused on both inter- shareholders, the tendency is to create case of prejudicial related-party transac- nal and external disclosure requirements. thresholds for approval of transactions. tions. In both approaches directors found Requirements for internal disclosure of In Albania and Rwanda, if a related-party liable must compensate the company for related-party transactions call for notify- transaction—or a group of such trans- damages and repay profits made from ing the company’s board of directors (or actions—represents less than 5% of the the transaction. supervisory board) and its shareholders. company’s assets, it must be approved Many laws have only transparency Those for external disclosure include dis- by the board of directors. If it represents provisions without making directors li- closure of the transaction to the stock ex- more than 5% of the assets, it must be able for prejudicial related-party transac- change or market regulator within 24–72 approved at a shareholders meeting. This tions. As long as interested parties com- hours after the transaction and disclosure model allows the company flexibility in ply with the requirements for approval in the company’s annual report. conducting its day-to-day activities while and disclosure of a related-party transac- Reforming governments have both ensuring that minority investors are in- tion, they are not liable for any damages broadened the scope and improved the volved in major decisions. caused. This deprives minority investors quality of the information that must be of an important tool for protecting their disclosed. In Indonesia and the Kyrgyz BEING CLEAR ABOUT LIABILITY own interests and those of the company Republic, for example, directors must Company directors are subject to strict they invest in. 28 DOING BUSINESS IN THE ARAB WORLD 2010 TABLE 7.2 EASING ACCESS TO EVIDENCE Who provides strong minority investor protections—and who does not? Minority investors are protected when they can bring a case before the court Extent of disclosure index (0–10) and expect the court to rule in a reason- Most Least able time. But to make their case, they Lebanon 9 Djibouti 5 need access to evidence before and dur- Saudi Arabia 9 Mauritania 5 ing the trial. Bahrain 8 Iraq 4 Reformers have made it easier for Egypt, Arab Rep. 8 United Arab 4 Emirates minority investors to gain access to in- Oman 8 Sudan 0 ternal corporate information before the trial—either directly or through a gov- Extent of director liability index (0–10) ernment inspector. Indonesia and Japan Most Least offer both options. Mozambique and Saudi Arabia 8 Mauritania 3 Rwanda allow shareholders access to any Kuwait 7 Djibouti 2 internal corporate documents except cor- United Arab 7 Morocco 2 porate secrets. And if the management Emirates Comoros 1 Algeria 6 fails to provide sufficient information, Lebanon 1 Qatar 6 shareholders can ask the court to appoint a government inspector with full powers Ease of shareholder suits index (0–10) to access all corporate documents. Easiest Most difficult Others have facilitated access to West Bank 7 Oman 2 evidence during the trial. Mali did so by and Gaza Syrian Arab 2 amending its procedural rules. Now law- Tunisia 6 Republic yers representing investors can question Bahrain 5 Yemen, Rep. 2 defendants and witnesses directly, with- Egypt, Arab Rep. 5 Morocco 1 Kuwait 5* Djibouti 0 out needing approval from the judge. * Comoros and Lebanon also score 5 on the ease of shareholder suits index. Source: Doing Business database. 1. Doidge, Karolyi and Stulz (2007). Paying taxes FIGURE 8.1 Paying taxes: tax compliance for a local manufacturing company Rankings are based on 3 subindicators Number of hours Firm tax liability per year to prepare, as % of profits before file returns all taxes borne and pay taxes 33.3% 33.3% Total Time tax rate 33.3% Payments Number of tax payments per year Taxes are essential. Without taxes, there taxes and mandatory contributions the Total tax rate, which measures the would be no money to provide public business must pay and what the process amount of taxes and mandatory con- amenities, infrastructure and services is for doing so. tributions payable by the company crucial for a properly functioning econ- The business starts from the same during the second year of operation. omy. But where the tax burden is large, financial position in each economy. All This amount, expressed as a percent- and the corresponding benefits appear the taxes and mandatory contributions age of commercial profit, is the sum to be small, companies—especially small paid during the second year of opera- of all the different taxes payable after and medium-size ones—may opt out tion are recorded. Taxes and mandatory accounting for various deductions and choose to operate in the informal contributions are measured at all levels and exemptions. sector. One way to enhance tax compli- of government and include corporate ance by businesses is to make the process income tax, turnover tax, all labor taxes WHO REFORMED IN 2008/09? of paying taxes easier and simpler. and contributions paid by the company The Doing Business tax survey re- (including mandatory contributions paid In the Arab world the trend of low- cords the effective tax that a small to to private pension or insurance funds), ering corporate income tax rates and medium-size company must pay and property tax, property transfer tax, div- implementing online systems continued the administrative costs of doing so. The idend tax, capital gains tax, financial in 2008/09. Six economies had reforms survey case study centers on TaxpayerCo, transactions tax, vehicle tax, sales tax making tax compliance easier. a medium-size business that started op- and other small taxes (such as fuel tax, erations last year. Doing Business asks stamp duty and local taxes). A range of Algeria reduced the corporate income tax practitioners in 183 economies to standard deductions and exemptions are tax rate from 25% to 19% for production review TaxpayerCo’s financial statements also recorded. of goods, construction and public works and a standard list of transactions that Three indicators are constructed: and tourism activities. the company completed during the year. Number of tax payments, which takes Respondents are asked how much in into account the method of payment, Djibouti replaced its sales tax with a the frequency of payments and the new value added tax, effective January TABLE 8.1 number of agencies involved in the 2009. The 7% value added tax is levied on Where is it easy to pay taxes—and where not? standardized case study. the supply of goods and services. Easiest Most difficult Time, which measures the number of GLOBAL GLOBAL (AW RANK 1–5) RANK (AW RANK 16–20) RANK hours per year necessary to prepare Jordan simplified income and sales tax Qatar 2 Morocco 125 and file tax returns and to pay the forms and introduced an online filing United Arab 4 Egypt, Arab Rep. 140 corporate income tax, value added and payment system. Legislation was Emirates Yemen, Rep. 148 tax, sales tax or goods and service tax amended to allow electronic payment Saudi Arabia 7 Algeria 168 and labor taxes and mandatory con- transactions, and a media campaign con- Oman 8 Mauritania 175 Kuwait 11 tributions. ducted to increase public awareness of the new payment facility. Note: Rankings are the average of the economy’s rankings on the number of payments, time and total tax rate. Source: Doing Business database. 30 DOING BUSINESS IN THE ARAB WORLD 2010 FIGURE 8.2 BOX 8.1 How Arab economies rank on Simplifying taxes in the Republic of Yemen the ease of paying taxes Creating a business environment that enables firms to grow, invest, create jobs and Global ranking (1–183) increase productivity requires building sound economic policies and regulations and MALDIVES EASIEST (1) effective public sector institutions. In the Republic of Yemen reform of the tax system is Qatar seen as an important part of this. Tax revenue has been relatively low, and the corporate United Arab Emirates tax burden relatively large compared with the individual tax burden. 20 Saudi Arabia The government reduced the number of tax instruments and lowered import du- Oman ties. But the structure of the statutory tax system, with its multiplicity of instruments 40 Kuwait and complex incentive scheme, remained a barrier to investment by firms. In addition, Bahrain the interaction between the tax administration and the private sector was characterized 60 Jordan by mistrust, rent-seeking behavior on both sides and lack of clarity about the implemen- West Bank and Gaza Lebanon tation of tax policies and regulations. 80 Comoros The administration of the tax code was thus a big part of the issue. It imposed a Iraq burden on business, contributed to informal economic behavior and acted as a deterrent 100 Djibouti to investment. Without restructuring and reform of the tax administration, any adjust- Sudan ments to the tax laws would be ineffective. 120 Syrian Arab Republic In July 2007 the World Bank began to assist the government in responding to these Tunisia challenges. It helped design and administer a wide-ranging reform program aimed at 140 Morocco Egypt, Arab Rep. encouraging participation in the tax system by simplifying and rationalizing the system Yemen, Rep. and removing barriers to paying taxes. A big focus was streamlining administrative 160 Algeria procedures and improving the structure and efficiency of the tax authority. Mauritania By July 2009 the reform program had produced clear results. The income tax and 183 goods and services tax instruments had been simplified and strengthened, and new regulations implemented to address underlying problems preventing compliance. Other tax instruments, such as fees, licenses and subnational taxes, had been consolidated Lebanon abolished the requirement to and reduced. A new, integrated tax system had been designed for small and medium- apply for permission to use accelerated size enterprises. Processes had been streamlined to reduce the costs of tax compliance. depreciation. Now businesses need only And the architecture of the tax administration had been redesigned, paving the way for notify the Ministry of Finance of their carrying out streamlined processes effectively. intention to do so. Further easing the process of paying taxes, the government authorized electronic records as well as profit tax rate from 30% to 15% for all lighter for small and medium-size busi- electronic payment at branches of Li- sectors except industry and real estate nesses. Reformers such as Egypt have banPost. (10%) and agriculture (0%). Sudan also underscored the importance of tax re- reduced the capital gains tax from 5% to form in enhancing economic growth and Oman issued a new income tax law in 2% for all fixed assets and from 10% to investment, increasing competitiveness, May 2009 that will completely replace 5% for real estate. combating unemployment and achieving the existing tax law and amendments. good governance. In reforming their tax The new law, effective for accounting Tunisia introduced a requirement, ef- systems they have sought to eliminate periods beginning on or after January fective in 2009, for all companies with a various exemptions, broaden the tax base 1, 2010, is aimed mainly at modernizing turnover equivalent to at least $1.5 mil- and modernize their tax systems. the tax regime and simplifying proce- lion to use the télédeclaration online tax dures. system. However, it raised the rate for so- EASING COMPLIANCE THROUGH cial security contributions by employers BROAD-BASED REFORMS Sudan enacted a new tax law in 2007 from 16% to 17.07% in January 2008. Many tax reforms are aimed at simpli- that took effect in January 2008. Aimed fying the tax law and making it easier at making tax compliance easier for busi- TOWARD SMART REGULATION for firms to comply with regulations. nesses, the new law includes revised A bold step in this direction involves tax rates, provisions on tax assessments Since 2004 Doing Business has recorded eliminating tax exemptions, tax holidays and appeals and dedicated tax payment 18 reforms in paying taxes in 13 Arab and other special treatment for differ- facilities for large and medium-size tax- economies—reforms aimed at making ent types of businesses, to achieve equal payers. The law reduced the corporate tax compliance easier and the tax burden treatment for all businesses. Eliminating DOING BUSINESS TOPICS 31 TABLE 8.2 use of technology to ease the paying of Who makes paying taxes easy and who does not—and where is the total tax rate taxes—and with good reason. If prop- highest and lowest? erly implemented, and adopted by busi- Payments (number per year) nesses, electronic tax systems speed up processing, improve data collection and Fewest Most reduce error rates. In many developing Qatar 1 Algeria 34 economies access to the internet remains Iraq 13 Djibouti 35 an obstacle. But adoption of new systems Oman 14 Mauritania 38 Saudi Arabia 14 Sudan 42 can be slow for reasons that cut across United Arab 14 Yemen, Rep. 44 economies at all levels of development. Emirates Most critically, taxpayers need to Time (hours per year) trust the payment system. This requires Fastest Slowest high-quality security systems to protect data. Also required are laws addressing United Arab 12 Syrian Arab 336 Emirates Republic data protection and privacy concerns and Bahrain 36 Morocco 358 allowing electronic signatures. Electronic Qatar 36 Algeria 451 payment can be implemented in several Oman 62 Egypt, Arab Rep. 480 ways, including through the internet. Saudi Arabia 79 Mauritania 696 Another way is through automatic bank Total tax rate (% of profit) transfer, popular across all regions and Lowest Highest income levels, mainly because taxpayers Qatar 11.3 Egypt, Arab Rep. 43.0 perceive it as less prone to security risks. United Arab 14.1 Yemen, Rep. 47.8 In Lebanon taxpayers can make Emirates Tunisia 62.8 electronic payments at any post office. In Saudi Arabia 14.5 Algeria 72.0 Tunisia the government initially intro- Bahrain 15.0 Mauritania 86.1 duced an intermediate option allowing Kuwait 15.5 online filers to print a receipt number Source: Doing Business database. and make their payment in any tax of- fice. The past year’s reform consolidated tax exemptions can be difficult, because electronic payment and filing through they are often used as tax incentives with the télédeclaration online system. specific objectives. Reform experience in Egypt shows that it takes political will and buy-in from stakeholders to succeed. MAKING SYSTEMS ELECTRONIC Many economies covered by Doing Busi- ness offer electronic tax filing and pay- ment options to businesses. In 56 econo- mies the electronic systems are used by a significant share of businesses. Not surprisingly, among OECD high-income economies all but one permit firms to file and pay taxes electronically. But the trend is also picking up among develop- ing economies. In the past 5 years 31 have introduced fairly comprehensive electronic systems. Another 14 are in- troducing electronic filing or payment or have just done so and are encouraging wider use by taxpayers. Many economies are eager to make Trading FIGURE 9.1 Trading across borders: exporting and across importing by ocean transport Rankings are based on 3 subindicators borders All documents required by customs and other agencies Document preparation, customs clearance and technical control, port and terminal handling, inland transport 33.3% 33.3% and handling Documents Time to to export export and import and import 33.3% Cost to export and import US$ per 20-foot container, no bribes or tariffs included The benefits of trade are well docu- between the 2 parties and ending with such as costs for documents, administra- mented. So are the obstacles to trade. delivery of the goods. For importing the tive fees for customs clearance and tech- Tariffs, quotas and distance from large goods, the procedures measured range nical control, terminal handling charges markets greatly increase the cost of from the vessel’s arrival at the port of and inland transport. The cost measure goods or prevent trading altogether. But entry to the shipment’s delivery at the does not include tariffs or duties. with bigger ships and faster planes, the importer’s warehouse. For exporting the Economies that have efficient cus- world is shrinking. Global and regional goods, the procedures measured range toms, good transport networks and trade agreements have reduced trade from the packing of the goods at the fac- fewer document requirements, making barriers. Yet Africa’s share of global trade tory to their departure from the port of compliance with export and import pro- is smaller today than it was 25 years ago. exit. Payment is by letter of credit, and cedures faster and cheaper, are more So is the Middle East’s, excluding oil ex- the time and cost for issuing or securing competitive globally. That can lead to ports. Many entrepreneurs face numer- a letter of credit are taken into account. more exports, and exports are associated ous hurdles in exporting or importing To make the data comparable across with faster growth and more jobs. Con- goods, including delays at the border. economies, several assumptions about versely, a need to file many documents They often give up. Others never try. the business and the traded goods are is associated with more corruption in Indeed, the potential gains from trade used. The business is of medium size, customs. Faced with long delays and fre- facilitation may be greater than those employs 60 people and is located in the quent demands for bribes, many traders arising from tariff reductions alone. periurban area of the economy’s larg- may avoid customs altogether. Instead, Doing Business compiles procedural est business city. It is a private, limited they smuggle goods across the border. requirements for trading a standard ship- liability company, domestically owned, This defeats the very purpose in having ment of goods by ocean transport. Every formally registered and operating under border control of trade: to levy taxes and procedure—along with the associated commercial laws and regulations of the ensure high quality of goods. documents, time and cost—for import- economy. The traded goods are ordinary, ing and exporting the goods is recorded, legally manufactured products trans- WHO REFORMED IN 2008/09? starting with the contractual agreement ported in a dry-cargo, 20-foot FCL (full TABLE 9.1 container load) container. Six economies in the Arab world imple- Where is trading easy—and where not? Documents recorded include port mented reforms making it easier to trade Easiest GLOBAL Most difficult GLOBAL filing documents, customs declaration in 2008/09: Jordan, Kuwait, Sudan, Tu- (AW RANK 1–5) RANK (AW RANK 16–20) RANK and clearance documents as well as of- nisia, the United Arab Emirates and the United Arab 5 Oman 123 ficial documents exchanged between the Republic of Yemen. Emirates Comoros 133 parties to the transaction. Time is re- Saudi Arabia 23 Sudan 142 Egypt, Arab Rep. 29 corded in calendar days, from the begin- Jordan continued reform efforts, initi- Mauritania 163 Bahrain 32 ning to the end of each procedure. Cost ated in 2006, to improve the customs Iraq 180 Djibouti 34 includes the fees levied on a 20-foot con- authority’s risk management program. tainer in U.S. dollars. All the fees associ- By May 2009 only 30% of the goods Note: Rankings are the average of the economy’s rankings on the documents, time and cost required to export and import. ated with completing the procedures to passing through the Port of Aqaba were Source: Doing Business database. export or import the goods are included, being physically inspected. Thanks to the DOING BUSINESS TOPICS 33 FIGURE 9.2 TABLE 9.2 How Arab economies rank on Who makes exporting easy—and who Who makes importing easy—and who the ease of trading across borders does not? does not? Global ranking (1–183) Documents (number) Documents (number) SINGAPORE EASIEST (1) Fewest Most Fewest Most United Arab Emirates United Arab 4 Syrian Arab 8 United Arab 5 Oman 10 Saudi Arabia Emirates Republic Emirates Kuwait 10 20 Qatar 5 Oman 10 Saudi Arabia 5 Egypt, Arab Rep. Comoros 10 Bahrain Saudi Arabia 5 Comoros 10 Djibouti 5 Iraq 10 40 Djibouti Tunisia 5 Iraq 10 Egypt, Arab Rep. 6 Mauritania 11 Tunisia Djibouti 5 Mauritania 11 West Bank 6 60 Qatar and Gaza Jordan Time (days) Time (days) 80 Morocco West Bank and Gaza Fastest Slowest Fastest Slowest Lebanon United Arab 8 Yemen, Rep. 27 United Arab 9 Lebanon 35 100 Emirates Emirates Kuwait Comoros 30 West Bank 40 Syrian Arab Republic Bahrain 14 Sudan 32 Egypt, Arab Rep. 15 and Gaza 120 Yemen, Rep. Egypt, Arab Rep. 14 Mauritania 39 Bahrain 15 Mauritania 42 Algeria Morocco 14 Iraq 102 Morocco 17 Sudan 46 Oman Tunisia 15 Saudi Arabia 18 Iraq 101 140 Comoros Cost (US$ per container) Cost (US$ per container) Sudan 160 Least Most Least Most Mauritania Iraq United Arab 593 Syrian Arab 1,190 United Arab 579 Yemen, Rep. 1,475 183 Emirates Republic Emirates Mauritania 1,523 Saudi Arabia 681 Algeria 1,248 Qatar 657 Syrian Arab 1,625 Morocco 700 Mauritania 1,520 Saudi Arabia 678 Republic prearrival declaration system, companies Jordan 730 Sudan 2,050 Egypt, Arab Rep. 823 Sudan 2,900 whose supply chain system has been Qatar 735 Iraq 3,900 Tunisia 858 Iraq 3,900 audited by customs (today, 4 of the larg- Source: Doing Business database. est importers) can avoid inspection for their containers. Full implementation of the automated customs administration clear goods can be transferred electroni- TOWARD SMART REGULATION system ASYCUDA World, which allows cally. But traders still must bring the origi- 24-hour online access, also helped ac- nal documents to customs for verification. Since 2004 Doing Business has recorded celerate clearance. 21 trade facilitation reforms in 12 Arab The United Arab Emirates continued economies. The most active reformers Kuwait automated customs, and mani- to improve both hard and soft infra- in the Arab world have been Egypt and fests can now be submitted electron- structure. Container Terminal 2 in Dubai Morocco. Here are some of the most ef- ically. This change, along with better now has 29 tandem lift cranes and 60 fective reform features that have been coordination between customs and the rail-mounted gantry cranes, significantly implemented worldwide over the years. port authority, has reduced the time to reducing the time to load vessels. Im- export and import. provements in processing and lower ad- GOING ELECTRONIC ministrative costs at several banks have Across economies, regardless of income Sudan made it easier for traders to file helped reduce the cost of trade finance level, installing electronic data inter- customs declarations online and con- products. And thanks to greater use of change systems for submitting and pro- nected 10 additional customs offices to technology at the Jebel Alin container cessing documents remains a popular and the customs system, simplifying clear- terminal, the terminal handling receipt effective way to reduce delays in the trad- ance procedures. It also introduced 2 is no longer required. ing process. The cost of implementation additional scanners at the Port of Sudan, varies, depending in part on the system’s speeding up the inspection process. The Republic of Yemen implemented complexity. Off-the-shelf systems tend to ASYCUDA++, allowing electronic sub- be less expensive than customized ones— Tunisia expanded its TradeNet electronic mission of customs documents. It also though customized systems may be better single-window system for trade transac- introduced a risk-based inspection re- tailored to addressing the specificities of tions. Now most documents required to gime, reducing the time for clearance. an economy’s trade procedures. 34 DOING BUSINESS IN THE ARAB WORLD 2010 BOX 9.1 printing, paper delivery, storage and in- Reforms to facilitate trade are picking up ventory costs are estimated at about $2 In the Middle East and North Africa an uncompetitive trading environment has ham- billion a year. pered participation in global supply chains. In 1975 the region’s share of manufactured Reforms do not always go smoothly. exports was 0.82%. By 2008 this share had grown only to 1.06%. Meanwhile, Latin Because a single window brings together America and the Caribbean saw its share of manufactured exports rise from 1.25% to several parties, some of which may have 4.16%, and East Asia and the Pacific expanded its share from 1.71% to 20%. Indeed, the to cede some control, it requires strong Middle East and North Africa fell behind all other regions except Sub-Saharan Africa. political support to succeed. In Korea As one study points out, the benefits of improved market access have been curtailed by the single window succeeded thanks to cumbersome trading procedures.1 the priority accorded to trade facilitation In the Middle East and North Africa exporters can expect to spend an average of reforms at high levels of government. 23 days to complete all export formalities—12 days more than the average in OECD economies. Why? There are several reasons. In many leading trading economies, completing a trade transaction requires only EASING PRIVATE PARTICIPATION IN TRADE SERVICES 4 documents. In the Middle East and North Africa it requires 7 on average. The trading process requires frequent interactions with multiple officials and agencies rather than Customs formalities are not the only simple electronic submission of documents. Moreover, traders often complain about the factor affecting the time and cost for need to make facilitation payments to get cargo cleared speedily. trading across borders. Private provid- A large share of traded goods are subject to physical inspection at the borders. ers of trade services—such as customs Doing Business data show that in many economies in the region, more than 50% of goods brokers, trucking companies and port crossing borders undergo physical inspection (in some economies, 100%). In leading service providers—all play an important trading nations the share is only about 10%. role. The quality of their services and the The market for critical trade services such as trucking, customs brokerage and con- fees they charge inevitably affect trade tainer terminal services remains uncompetitive in many of the region’s economies, often competitiveness. By removing overly as a result of government regulations and cartelization.2 Traders pay the price through burdensome restrictions on their op- higher costs and lower quality of service. erations, governments can help increase The good news is that reformers seeking ways to create an environment more competition and thus improve the qual- conducive to trade need not look far. Trade facilitation reforms have been picking up in ity and lower the cost of service. the region. The United Arab Emirates has created an electronic portal linking ports and In several developing economies, customs. Now traders can complete transactions mostly online, and the country ranks despite lower wage levels, traders must among the top 10 on the ease of trading across borders. Jordan has set an example by pay higher fees to customs brokers than adopting risk-based inspections. Now physical inspections are limited to the riskiest their counterparts in developed econo- cargo. And both Jordan and Egypt have introduced postclearance audits for some of mies. Customs brokers are often regu- the largest importers, allowing fast-track clearance for companies with a good track lated by government agencies. But caps record. on the number of brokers, high license 1. Dennis (2006). fees, onerous eligibility requirements and 2. Devlin and Yee (2005). infrequent training opportunities restrict entry, limit competition and contribute Technology is no magic wand. The For electronic data interchange re- to higher brokerage fees. benefits of electronic data interchange forms to succeed, all these concerns need Greater competition makes a dif- systems can be undercut by many factors. to be addressed. ference. After Algeria accelerated the Traders in several African economies approval of license applications for bro- that have developed automated customs CREATING A SINGLE WINDOW kers, customs clearance fees dropped by systems—such as Ghana—complain Implementing a single window for trade 40–50%. Yet in some economies the high about lack of access to uninterrupted transactions is another way to make service fees reflect the facilitation pay- power supply and high-speed internet it faster and easier to trade. In Korea ments brokers must pay to navigate the connections. a comprehensive single-window project maze of trade procedures. These should Lack of legislation on electronic sig- completed in July 2008 made it possible be tackled first. natures and transactions can also cause for traders, government agencies and Competition is just as critical in problems and lead to duplications in private sector participants—including trucking. And access to competitive, ef- the clearance system. In Tunisia, for ex- banks, customs brokers, insurance com- ficient ports can provide a big boost ample, traders still have to file paper panies and freight forwarders—to ex- to an economy’s trade prospects. Low- documents even though an electronic change information in real time, speed- income economies generally face higher system is in place. ing up approvals. Firms’ savings in labor, port costs, in part because of poorer DOING BUSINESS TOPICS 35 infrastructure. And port infrastructure is costly. The development of an economy’s port competitiveness can be hindered by many issues, one of which is unfavorable regulations. In many economies regulations re- strict or discourage private participation in the provision of port services. And without the right regulatory regime and incentive structure, an inefficient pub- lic service provider could simply be re- placed by an inefficient private monopoly service provider. Good contractual and regulatory design and oversight—em- bodied in favorable pricing policies, labor regulations and contract duration—can help translate private participation into competitive port services. Recent years have seen a turnaround in performance at the port of Djibouti and the Jordanian port of Aqaba. This is thanks in part to favorable contractual and regulatory design encouraging in- vestments by some of the world’s leading private container terminal operators. Enforcing FIGURE 10.1 Enforcing contracts: resolving contracts a commercial dispute through the courts Rankings are based on 3 subindicators Days to resolve Attorney, court and commercial sale dispute enforcement costs before the court as % of claim value 33.3% 33.3% Time Cost 33.3% Procedures Steps to file claim, obtain judgment and enforce it Where contract enforcement is efficient, sales agreement (200% of the economy’s justice is out of reach. In the absence of businesses are more likely to engage income per capita). The claim is filed efficient courts, firms undertake fewer with new borrowers or customers. Doing before a court in the economy’s largest investments or business transactions. Business tracks the efficiency of the ju- business city with jurisdiction over com- And they prefer to involve only a small dicial system in resolving a commer- mercial cases worth 200% of income per group of people who know one another cial dispute, following the step-by-step capita and is disputed on the merits. The from previous dealings. evolution of a commercial sale dispute judgment is 100% in favor of the Seller before local courts. The data are collected and is not appealed. The Seller enforces WHO REFORMED IN 2008/09? through study of the codes of civil proce- the judgment and the money is success- dure and other court regulations as well fully collected through a public sale of In the Arab world 4 economies had as through surveys completed by local the Buyer’s assets. reforms making it easier to enforce con- litigation lawyers (and, in a quarter of the Rankings on enforcing contracts are tracts in 2008/09: Algeria, Egypt, Jordan economies, by judges as well). based on 3 subindicators: and West Bank and Gaza. The dispute concerns a contract for Number of procedures, which are the sale of goods between 2 businesses defined as any interaction between Algeria introduced a new code of (the Seller and the Buyer), both located the parties or between them and the civil procedure and is computerizing its in the economy’s largest business city. judge or court officer. This includes courts. The new code formalizes and The Seller sells and delivers goods, worth steps to file the case, steps for trial details procedures and sets strict time 200% of the economy’s income per cap- and judgment and steps necessary to limits, making the judge responsible for ita, to the Buyer. The Buyer refuses to enforce the judgment. enforcing them. The law limits the num- pay on the grounds that the goods are not Time, which counts the number of cal- ber of hearings to dispose of a case to of adequate quality. The Seller sues the endar days from the moment the Seller 5 unless there are exceptional circum- Buyer to recover the amount under the files the lawsuit in court until payment stances. And it requires judges to offer is received. This includes both the days the parties to a lawsuit an opportunity TABLE 10.1 Where is enforcing contracts easy—and on which actions take place and the to seek mediation. The new code also where not? waiting periods in between. requires that all documents be produced Easiest GLOBAL Most difficult GLOBAL Cost, which is recorded as a percent- in Arabic, the official language of Algeria. (AW RANK 1–5) RANK (AW RANK 16–20) RANK age of the claim (assumed to be The courts are being fully computerized, Yemen, Rep. 35 Sudan 146 equivalent to 200% of income per including with an electronic case register Tunisia 77 Egypt, Arab Rep. 148 capita). Three types of costs are re- and case management software. Mauritania 83 Comoros 153 corded: court costs (including expert Qatar 95 Djibouti 161 fees), enforcement costs (including Egypt began operating its new commer- Oman 106 Syrian Arab 176 Republic costs for a public sale of the Buyer’s cial courts in October 2008. assets) and attorney fees. Note: Rankings are the average of the economy’s rankings on the procedures, time and cost to resolve a commercial dispute Justice delayed is often justice denied. Jordan implemented an extensive court through the courts. And in many economies only the rich reform. With the aim of better distribut- Source: Doing Business database. can afford to go to court. For the rest, ing the caseload, it raised the threshold DOING BUSINESS TOPICS 37 for cases heard by its lowest first-instance courts, it can make sense to establish FIGURE 10.2 civil court, the “conciliation court,� from new commercial courts. Where a limited How Arab economies rank on the ease of enforcing contracts 3,000 Jordanian dinars to 7,000 (about number of commercial cases need to Global ranking (1–183) $10,000). Specialized commercial divi- be handled, specialized commercial sec- sions were established at the level of tions provide a less expensive alternative. LUXEMBOURG EASIEST (1) both the first-instance courts and con- In Cairo a one-step filing procedure was Yemen, Rep. ciliation courts. Jordan also introduced a introduced in the busiest first-instance Tunisia 20 computerized case management system, court to increase efficiency and reduce Mauritania Mizan II, an improved version of the opportunities for bribes. The initiative, Qatar 40 Oman original used in neighboring West Bank including relocation and training of staff, and Gaza. The system adds such features the creation of new forms and even Morocco 60 West Bank and Gaza as text message notification of attorneys, building renovations, cost less than $1 Kuwait online access to court records for autho- million. Bahrain 80 rized users and the possibility to consult Lebanon electronic copies of each case file. UPDATING CLAIM THRESHOLDS Algeria 100 Most economies redistribute the respon- Jordan West Bank and Gaza is piloting Mizan sibilities of first-instance courts to ensure United Arab Emirates 120 Iraq II while implementing wide-ranging more efficient processing of cases. The Saudi Arabia court reform. New judges have been vast majority of the economies covered 140 Sudan recruited and trained. A legal provision by Doing Business operate a 2-tiered Egypt, Arab Rep. authorizing a settlement judge to hear civil court system. Depending on the Comoros conciliation court cases (those involving litigation value of the claim and, in some 160 Djibouti values less than 10,000 Jordanian dinars) cases, the subject matter, first-instance Syrian Arab Republic entered into force. Courts with a sub- cases go either to a lower court—often 183 stantial caseload, such as the Ramallah the magistrate’s court, city court or jus- magistrates’ court, have been assigned an tice of the peace—or to the higher court. oral proceedings and limits on types enforcement judge responsible solely for Some economies further divide lower of evidence and on cross-examination. handling issues arising from the execu- and higher jurisdictions. Small claims courts also oblige judges to tion of judgments. The changes reduced Where economies draw the line be- issue a decision shortly after concluding the average time to resolve a commercial tween their lower and higher courts dif- a hearing. dispute from 700 days to 600. fers starkly. The thresholds range from Small claims courts deal with claims $240 in Guyana to $45,000 in Australia. ranging from as little as $200 in India TOWARD SMART REGULATION Globally, higher courts deal with cases to as much as $21,000 in Korea. Most above 126% of income per capita on economies with small claims courts fix Since 2004 Doing Business has recorded 5 average. the threshold at 20% or less of income reforms in enforcing contracts in 5 Arab Regardless of the level, monetary per capita. economies. Policy makers often assume thresholds have to be updated regularly Small and medium-size businesses that judicial reform takes years and costs to ensure that the workload is distrib- can especially benefit from small claims millions of dollars. Saudi Arabia, for uted as initially intended. With economic courts. Recognizing this, in January example, plans to spend almost $2 bil- growth and inflation, thresholds can 2009 the European Union issued a new lion to upgrade its court system over the quickly become outdated, and higher ju- regulation to create a small claims pro- coming years. risdictions overburdened. Some econo- cedure for cross-border cases of less But court efficiency can often be mies have recently adjusted thresholds. than €2,000. The measure is aimed at improved through simple, targeted mea- In 2009 Jordan more than doubled the tackling inefficient debt enforcement, sures. An initial analysis of the entire threshold for its lower court. which was seen as a major threat to the process of taking a commercial case survival of businesses, particularly small through the court system, along with RELYING ON SMALL CLAIMS COURTS and medium-size ones. collection of court statistics, helps focus Simple commercial disputes can often be reform efforts. Related consultancy fees resolved in small claims courts, lessening USING BENCHMARKS AS A GUIDE range from $80,000 to $500,000, depend- the burden on higher-instance courts. A global comparison of the number of ing on the size of the judicial system and Simplified procedural rules help speed judges involved in the standardized case the quality of the data. up trial and judgment. These include used by Doing Business is informative. In Depending on the caseload of the the use of standard forms to file claims, most economies just 1 judge would be 38 DOING BUSINESS IN THE ARAB WORLD 2010 TABLE 10.2 assigned to this simple commercial case. Who makes enforcing contracts easy— and who does not? But in roughly 10% of economies, mainly in the Middle East and North Africa, the Procedures (number of steps) law requires 3 judges to hear the case. Fewest Most While additional judges can add value to Yemen, Rep. 36 Kuwait 50 the decision-making process, many com- Lebanon 37 Iraq 51 mercial cases, particularly routine ones, Jordan 38 Oman 51 can be handled by a single judge. Tunisia 39 Sudan 53 Morocco 40 Syrian Arab 55 MAKING LEGAL INFORMATION PUBLIC Republic Most economies make legal texts and re- Time (days) cent court judgments publicly available. Fastest Slowest Making information readily available on Mauritania 370 Lebanon 721 the law, and on the courts’ interpreta- Comoros 506 Sudan 810 tion of the law, benefits both the general Iraq 520 Syrian Arab 872 public and the courts. Public information Republic Yemen, Rep. 520 makes the law more predictable. It also United Arab 537 Egypt, Arab Rep. 1,010 helps potential parties to a lawsuit more Emirates Djibouti 1,225 easily find an out-of-court solution—and Cost (% of claim) that helps reduce the workload of the Least Most courts. Oman 13.5 Syrian Arab 29.3 Bahrain 14.7 Republic Yemen, Rep. 16.5 Lebanon 30.8 Kuwait 18.8 Jordan 31.2 Sudan 19.8 Djibouti 34.0 Comoros 89.4 Source: Doing Business database. Closing a FIGURE 11.1 Closing a business: time, cost and business outcome of bankruptcy of a local company Rankings are based on 1 subindicator Recovery rate is a function of time, cost and other factors such as lending rate and the likelihood of the company continuing to operate 100% Recovery rate Note: Time and cost do not count separately for the ranking. The economic crises of the 1990s in developed using a standard set of case do so through an efficient process, puts emerging markets—from East Asia to assumptions to track a company going people and capital to their most effective Latin America, from the Russian Federa- through the step-by-step procedures of use. The result is more productive busi- tion to Mexico—raised concerns about the bankruptcy process. It is assumed nesses and more jobs. the design of bankruptcy systems and that the company is a domestically the ability of such systems to help reor- owned, limited liability corporation op- WHO REFORMED IN 2008/09? ganize viable companies and close down erating a hotel in the economy’s larg- nonviable ones. Where bankruptcy is est business city. The company has 201 Kuwait was the only economy in the inefficient, nonviable businesses linger employees, 1 main secured creditor and Arab world with a reform making it for years, keeping assets and human 50 unsecured creditors. Assumptions are easier to close a business in 2008/09. capital from being reallocated to more also made about the future cash flows. productive uses. The case is designed so that the company Kuwait introduced a new legal proce- The Doing Business indicators iden- has a higher value as a going concern— dure allowing companies that face finan- tify weaknesses in the bankruptcy law as that is, the efficient outcome is either cial difficulties but are not yet insolvent well as the main procedural and admin- reorganization or sale as a going concern, to reorganize themselves, restructure istrative bottlenecks in the bankruptcy not piecemeal liquidation. The data are their debt and apply other measures to process. In many developing economies derived from questionnaires answered restore their financial health and profit- bankruptcy is so inefficient that creditors by attorneys at private law firms. ability. Only companies still paying their hardly ever use it. In economies such as Three measures are constructed debt obligations can file a petition with these, reform would best focus on im- from the survey responses: the time to the appeals court for a restructuring proving contract enforcement outside go through the insolvency process, the plan. The central bank can also file a bankruptcy. cost to go through the process and the petition for restructuring. If the petition The data on closing a business are recovery rate—how much of the insol- is accepted by the court, no secured or vency estate is recovered by stakeholders, unsecured creditors can file proceedings TABLE 11.1 taking into account the time, the cost, the against the company. Once the court has Where is it easy to close a business— depreciation of assets and the outcome of reviewed and accepted the petition, the and where not? the insolvency proceeding. central bank asks a consulting company Easiest Most difficult (AW RANK 1–5) GLOBAL RANK (AW RANK 16–20) GLOBAL RANK Bottlenecks in bankruptcy cut into to analyze the company’s financial situa- the amount claimants can recover. In tion and provide a report with detailed Bahrain 26 Mauritania 150 economies where bankruptcy laws are recommendations for avoiding bank- Qatar 33 Comoros 183 Tunisia 34 Iraq 183 inefficient, this is a strong deterrent to ruptcy. Once this is submitted, the court Algeria 51 Sudan 183 investment. Access to credit shrinks, decides on the duration of the restructur- Saudi Arabia 60 West Bank 183 and nonperforming loans and financial ing procedure. and Gaza risk grow because creditors cannot re- Note: Rankings are based on the recovery rate: how many cents cover overdue loans. Conversely, efficient on the dollar claimants (creditors, tax authorities and employees) recover from the insolvent firm. bankruptcy laws can encourage entre- Source: Doing Business database. preneurs. The freedom to fail, and to 40 DOING BUSINESS IN THE ARAB WORLD 2010 FIGURE 11.2 BOX 11.1 How Arab economies rank on Modernizing bankruptcy the ease of closing a business Every economy needs an efficient and effective regime for corporate insolvency—to Global ranking (1–183) channel companies that cannot be saved to swift liquidation, so that their assets can be JAPAN EASIEST (1) sold to more efficient entities, and permit viable companies an opportunity to reorga- nize. The continuation of a business, through reorganization or en masse liquidation, is Bahrain often the most desirable outcome. Qatar 20 The Middle East and North Africa, with its divergent economies, generally ranks Tunisia Algeria among the weakest regions when it comes to the effectiveness of insolvency regimes. 40 Recovery rates are often less than 30 cents on the dollar. This can be attributed in part Saudi Arabia Oman to many of the same structural weaknesses that plague many insolvency regimes around 60 the world: courts that are unable to handle cases swiftly and predictably; a predisposition Morocco Kuwait by lenders to attempt swift, piecemeal liquidation rather than work through a difficult 80 Syrian Arab Republic turnaround; and inadequate legislation that leads disproportionately to business failure Yemen, Rep. rather than rescue. 100 Jordan Some unique factors are also at play. The region has some of the largest family- Lebanon owned businesses in the world and a disproportionate number of privately held busi- 120 Egypt, Arab Rep. nesses. Such companies are unlikely to want to undergo a formal bankruptcy process, Djibouti 140 which, under most bankruptcy laws in the region, would result in a loss of control of the United Arab Emirates Mauritania business. Moreover, an understanding of corporate distress as a natural outgrowth of 160 Comoros risk-taking is still developing. These factors help explain why insolvency reforms appear Iraq to have been a relatively low priority in the region. 183 Sudan Yet some of the factors that have held the region back may now serve as a catalyst West Bank and Gaza for future reforms. Several economies in the region are exploring the possibility of in- troducing out-of-court workout (or “London�) rules to encourage debtors and creditors to deal with one another in a nonadversarial environment outside the court system and without the debtor ceding control of the company. Such rules, which would likely be TOWARD SMART REGULATION nonbinding, could help induce the parties to begin the difficult work of turning around a troubled company before it is too late to save it. In times of crisis, overburdened courts, Also promising was a recent meeting in Abu Dhabi, organized by the Hawkamah unqualified liquidators and rigid laws Institute of Dubai and bringing together 11 governments from the region. Participants become even bigger obstacles to the or- adopted a declaration calling for, among other things, the modernization of insolvency derly exit of nonviable businesses. And regimes around the region. This first broad public recognition of the need to improve the reorganizing viable firms to preserve region’s insolvency regimes may mark the beginning of a new era of reform. jobs becomes more important than ever. Governments can help by encouraging getting debtors to face reality early on. ity before it is too late. firms to seek preinsolvency solutions, One way policy makers can encour- Creating a framework for prepack- improving the efficiency of courts and age businesses to seek timely solutions is aged reorganizations can help keep com- training receivers and liquidators to do to expand the grounds on which compa- panies operating as a going concern. a good job in administering distressed nies suffering financial problems can file Italy and Korea introduced prepackaged companies and selling their assets ef- for reorganization. The law should allow reorganizations in 2006/07. Now a firm ficiently. Since 2004 Doing Business has debtors to file for reorganization when can negotiate a reorganization plan with recorded 3 reforms making it easier to facing financial distress rather than its creditors before filing for bankruptcy. close a business in 3 Arab economies. requiring that they wait for the much Once it reaches an agreement with the worse situation of insolvency. In 2008/09 required majority of creditors, the firm FACING REALITY EARLY ON Kuwait was among the reformers that files for bankruptcy and asks the court Debtors should not wait until it is too implemented rescue statutes introducing to approve its reorganization plan. Once late to save the company. In economies or promoting the use of preinsolvency the court approves, it imposes the agree- where reorganization functions well, procedures. Requiring debtors to file for ment on the creditors still holding out. such as Finland and Norway, companies insolvency as soon as they default or as The advance negotiations with creditors typically file for bankruptcy a couple of soon as default is imminent is another clear the way for quickly scheduling a weeks after default. Many economies, way to encourage companies to face real- court hearing, allowing a rapid exit from particularly those with old bankruptcy bankruptcy. regimes, could save more companies by DOING BUSINESS TOPICS 41 TABLE 11.2 TRAINING ADMINISTRATORS Who makes it easy to close a business— Receivers and liquidators play essential and who does not? roles in insolvency procedures. Receivers Time (years) take part in managing debtor companies Fastest Slowest —either replacing management or coad- Tunisia 1.3 Egypt, Arab Rep. 4.2 ministering with it. Liquidators are in Saudi Arabia 1.5 Jordan 4.3 charge of selling the assets of nonvi- Morocco 1.8 Djibouti 5.0 able companies. Many economies have Algeria 2.5 United Arab 5.1 Bahrain 2.5 Emirates launched reforms to ensure that both Mauritania 8.0 professions have adequate business and educational qualifications and are being Cost (% of estate) well supervised. In recent years such Least Most economies as Bulgaria, Canada, Chile, Kuwait 1 Egypt, Arab Rep. 22 China, Poland, Romania, the United Oman 4 Lebanon 22 Kingdom and the United States have in- Algeria 7 Qatar 22 troduced qualification standards. The aim Tunisia 7 Saudi Arabia 22 Yemen, Rep. 8 United Arab 30 is to encourage trustees to sell distressed Emirates assets quickly, maximizing returns. Recovery rate (cents on the dollar) Highest Lowest Bahrain 63.2 Lebanon 19.0 1. Djankov (2009). Qatar 52.7 Egypt, Arab Rep. 16.8 Tunisia 52.3 Djibouti 15.9 Algeria 41.7 United Arab 10.2 Saudi Arabia 37.5 Emirates Mauritania 6.7 Note: The rankings reflected in the table include only Arab economies with a practice of bankruptcy (16 in total). Another 4 have no practice. Source: Doing Business database. SPEEDING UP COURT PROCEDURES Once an insolvency case is brought be- fore the court, a timely resolution be- comes essential, especially if the aim is to save the company. Proceedings that end with an efficient outcome—the firm continuing to operate or being sold as a going concern—go through the insol- vency process in less than 2 years. The court systems in many econo- mies lack the infrastructure, training and technical expertise to resolve com- mercial disputes in a timely way.1 In the coming years growth in the num- ber of bankruptcy filings could further strain the capacity of courts, increasing their risk of becoming overwhelmed. But some economies in recent years have in- troduced specialized bankruptcy courts to deal more efficiently with insolvency procedures. Ease of doing stronger protection of property rights. The simple average of Iceland’s percentile formed in 3 or more of the 10 Doing Business topics. This year 38 economies business rankings on all topics is 25%. When all economies are ordered by their average met this criterion: Afghanistan, Albania, Algeria, Angola, Armenia, Bangladesh, percentile rank, Iceland is in 14th place. Belarus, Burkina Faso, Cameroon, Co- More complex aggregation methods lombia, the Czech Republic, Egypt, Ethi- —such as principal components and un- opia, Guatemala, Honduras, Hong Kong observed components—yield a nearly (China), Indonesia, the Islamic Republic identical ranking.1 The choice of aggre- of Iran, Jordan, Kazakhstan, the Kyrgyz gation method has little influence on the Republic, Liberia, FYR Macedonia, Mali, rankings because the 10 sets of indicators Mauritius, Moldova, Montenegro, Peru, in Doing Business provide sufficiently the Philippines, Poland, Portugal, Rus- broad coverage across topics. So Doing sia, Rwanda, Sierra Leone, Singapore, Business uses the simplest method. Tajikistan, the United Arab Emirates and The ease of doing business index is the Republic of Yemen. Second, Doing limited in scope. It does not account for Business ranks these economies on the The ease of doing business index ranks an economy’s proximity to large markets, increase in their ranking on the ease of economies from 1 to 183. For each econ- the quality of its infrastructure services doing business from the previous year omy the index is calculated as the rank- (other than services related to trading using comparable rankings. ing on the simple average of its percentile across borders), the strength of the fi- rankings on each of the 10 topics covered nancial system, the security of property in Doing Business 2010, that is, exclusive from theft and looting, macroeconomic of the electricity pilot data. The ranking conditions or the strength of underlying 1. See Djankov and others (2005). on each topic is the simple average of the institutions. There remains a large unfin- percentile rankings on its component ished agenda for research into what regu- indicators (table 12.1). lation constitutes binding constraints, If an economy has no laws or reg- what package of reforms is most effective ulations covering a specific area—for and how these issues are shaped by the example, bankruptcy—it receives a “no context of an economy. The Doing Busi- practice� mark. Similarly, an economy ness indicators provide a new empirical receives a “no practice� or “not possible� data set that may improve understanding mark if regulation exists but is never of these issues. used in practice or if a competing regula- Doing Business also uses a simple tion prohibits such practice. Either way, a method to calculate the top reformers. “no practice� mark puts the economy at First, it selects the economies that re- the bottom of the ranking on the relevant TABLE 12.1 indicator. Which indicators make up the ranking? Here is one example of how the Starting a business Protecting investors ranking is constructed. In Iceland it takes Procedures, time, cost and paid-in minimum Strength of investor protection index: extent of 5 procedures, 5 days and 3% of annual capital to open a new business disclosure index, extent of director liability index income per capita in fees to open a and ease of shareholder suits index business. The minimum capital required Dealing with construction permits Paying taxes amounts to 15.8% of income per capita. Procedures, time and cost to obtain construction Number of tax payments, time to prepare and file permits, inspections and utility connections tax returns and to pay taxes, total taxes as a share On these 4 indicators Iceland ranks in of profit before all taxes borne the 14th, 4th, 19th and 67th percentiles. Employing workers Trading across borders So on average Iceland ranks in the 26th Difficulty of hiring index, rigidity of hours index, Documents, time and cost to export and import percentile on the ease of starting a busi- difficulty of redundancy index, redundancy cost ness. It ranks in the 50th percentile on Registering property Enforcing contracts protecting investors, 38th percentile on Procedures, time and cost to transfer commercial Procedures, time and cost to resolve a trading across borders, 8th percentile real estate commercial dispute on enforcing contracts, 8th percentile Getting credit Closing a business on closing a business and so on. Higher Strength of legal rights index, depth of credit Recovery rate in bankruptcy rankings indicate simpler regulation and information index References Alesina, Alberto, Silvia Ardagna, Giuseppe Djankov, Simeon, Darshini Manraj, Caralee Klapper, Leora, Anat Lewin and Juan Manuel Nicoletti and Fabio Schiantarelli. 2005. McLiesh and Rita Ramalho. 2005. “Doing Quesada Delgado. 2009. “The Impact of “Regulation and Investment.� Journal of Business Indicators: Why Aggregate, and the Business Environment on the Busi- the European Economic Association 3 (4): How to Do It.� World Bank, Washington, ness Creation Process.� Policy Research 791–825. DC. Working Paper 4937, World Bank, Wash- Antunes, Antonio, and Tiago Cavalcanti. Djankov, Simeon, Tim Ganser, Caralee ington, DC. 2007. “Start Up Costs, Limited Enforce- McLiesh, Rita Ramalho and Andrei Masatlioglu, Yusufcan, and Jamele Rigolini. ment, and the Hidden Economy.� Euro- Shleifer. Forthcoming. “Effect of Corpo- 2008. “Informality Traps.� Department of pean Economic Review 51 (1): 203–24. rate Taxes on Investment and Entrepre- Economics, University of Michigan, Ann Ardagna, Silvia, and Annamaria Lusagi. neurship.� American Economic Journal: Arbor. 2009. Where Does Regulation Hurt? Macroeconomics. Narayan, Deepa, Robert Chambers, Meera Evidence from New Businesses across Doidge, Craig, Andrew Karolyi and René M. Kaul Shah and Patti Petesh. 2000. Voices Countries. NBER Working Paper 14747. Stulz. 2007. “Why Do Countries Matter So of the Poor: Crying Out for Change. Wash- Cambridge, MA: National Bureau of Eco- Much for Corporate Governance?� Jour- ington, DC: World Bank. nomic Research. nal of Financial Economics 86: 1–39. OECD Development Centre. 2009. Is Infor- Barseghyan, Levon. 2008. “Entry Costs and Fisman, Raymond, and Virginia Sarria- mal Normal? Towards More and Better Cross-Country Differences in Productivity Allende. 2004. Regulation of Entry and Jobs in Developing Countries. Paris: OECD. and Output.� Journal of Economic Growth the Distortion of Industrial Organization. Perotti, Enrico, and Paolo Volpin. 2004. 13 (2): 145–67. NBER Working Paper 10929. Cambridge, “Lobbying on Entry.� CEPR Discussion Chang, Roberto, Linda Kaltani and Norman MA: National Bureau of Economic Re- Paper 4519, Centre for Economic Policy Loayza. 2009. “Openness Can Be Good for search. Research, London. Growth: The Role of Policy Complemen- Freund, Caroline, and Bineswaree Bolaky. Schneider, Friedrich. 2005. “The Informal tarities.� Journal of Development Econom- 2008. “Trade, Regulation and Income.� Sector in 145 Countries.� Department of ics 90: 33–49. Journal of Development Economics 87: Economics, University Linz. Dennis, Allen. 2006. “The Impact of Regional 309–21. World Bank. 2003. Doing Business in 2004: Trade Agreements and Trade Facilita- Helpman, Elhanan, Marc Melitz and Yona Understanding Regulation. Washington, tion in the Middle East and North Africa Rubinstein. 2008. “Estimating Trade DC: World Bank Group. Region.� Policy Research Working Paper Flows: Trading Partners and Trading 3837, World Bank, Washington, DC. Volumes.� Quarterly Journal of Economics World Bank Independent Evaluation Group. 123 (2): 441–87. 2008. Doing Business: An Independent de Soto, Hernando. 2000. The Mystery of Evaluation—Taking the Measure of the Capital: Why Capitalism Triumphs in Kaplan, David, Eduardo Piedra and Enrique World Bank–IFC Doing Business Indica- the West and Fails Everywhere Else. New Seira. 2008. “Entry Regulation and Busi- tors. Washington, DC: World Bank Group. York: Basic Books. ness Start-Ups: Evidence from Mexico.� Devlin, Julia, and Peter Yee. 2005. “Trade Lo- Working Paper, Enterprise Analysis Unit, gistics in Developing Countries: The Case World Bank, Washington, DC. of the Middle East and North Africa.� Klapper, Leora, Luc Laeven and Raghuram World Economy 28: 435–56. Rajan. 2006. “Entry Regulation as a Bar- Djankov, Simeon. 2009. “Briefing Note on rier to Entrepreneurship.� Journal of Fi- Corporate Debt Burden, Insolvency, and nancial Economics 82 (3): 591–629. World Bank Group Response.� World Bank, Washington, DC. Doing Business indicators 46 DOING BUSINESS IN THE ARAB WORLD 2010 Algeria Bahrain Comoros Djibouti Egypt, Arab Rep. Iraq Jordan Ease of doing business (Arab world rank) 13 2 18 19 10 16 9 Ease of doing business (global rank) 136 20 162 163 106 153 100 STARTING A BUSINESS (ARAB WORLD RANK) 15 7 17 20 2 18 12 Procedures (number) 14 7 11 11 6 11 8 Time (days) 24 9 24 37 7 77 13 Cost (% of income per capita) 12.1 0.5 182.1 195.1 16.1 75.9 49.5 Min. capital (% of income per capita) 31 195.2 261.8 500.5 0 30.3 19.9 DEALING WITH CONSTRUCTION PERMITS (ARAB WORLD RANK) 13 1 6 11 19 9 8 Procedures (number) 22 13 18 14 25 14 19 Time (days) 240 43 164 195 218 215 87 Cost (% of income per capita) 39.6 54.6 72.6 948.3 331.6 397.9 697.1 EMPLOYING WORKERS (ARAB WORLD RANK) 14 1 19 17 13 6 5 Difficulty of hiring index (0-100) 44 0 39 67 0 33 11 Rigidity of hours index (0-100) 40 0 40 40 20 20 0 Difficulty of redundancy index (0-100) 40 30 40 30 60 20 60 Rigidity of employment index (0-100) 41 10 40 46 27 24 24 Redundancy cost (weeks of salary) 17 4 100 56 132 0 4 REGISTERING PROPERTY (ARAB WORLD RANK) 20 4 15 19 13 7 16 Procedures (number) 11 2 5 7 7 5 7 Time (days) 47 31 24 40 72 8 21 Cost (% of property value) 7.1 0.9 20.8 13.2 0.9 7.7 7.5 GETTING CREDIT (ARAB WORLD RANK) 11 4 16 19 2 16 9 Strength of legal rights index (0-10) 3 4 3 1 3 3 4 Depth of credit information index (0-6) 2 4 0 1 6 0 2 Public registry coverage (% of adults) 0.2 0.0 0.0 0.2 2.5 0.0 1.0 Private bureau coverage (% of adults) 0.0 34.9 0.0 0.0 8.2 0.0 0.0 PROTECTING INVESTORS (ARAB WORLD RANK) 5 4 15 20 5 11 11 Extent of disclosure index (0-10) 6 8 6 5 8 4 5 Extent of director liability index (0-10) 6 4 1 2 3 5 4 Ease of shareholder suits index (0-10) 4 5 5 0 5 4 4 Strength of investor protection index (0-10) 5.3 5.7 4 2.3 5.3 4.3 4.3 PAYING TAXES (ARAB WORLD RANK) 19 6 10 12 17 11 7 Payments (number per year) 34 25 20 35 29 13 26 Time (hours per year) 451 36 100 114 480 312 101 Total tax rate (% of profit) 72 15 41.1 38.7 43 28.4 31.1 TRADING ACROSS BORDERS (ARAB WORLD RANK) 15 4 17 5 3 20 8 Documents to export (number) 8 5 10 5 6 10 7 Time to export (days) 17 14 30 19 14 102 17 Cost to export (US$ per container) 1,248 955 1,073 836 737 3,900 730 Documents to import (number) 9 6 10 5 6 10 7 Time to import (days) 23 15 21 18 15 101 19 Cost to import (US$ per container) 1,428 995 1,057 911 823 3,900 1,290 ENFORCING CONTRACTS (ARAB WORLD RANK) 11 9 18 19 17 14 12 Procedures (number) 46 48 43 40 41 51 38 Time (days) 630 635 506 1,225 1,010 520 689 Cost (% of claim) 21.9 14.7 89.4 34 26.2 27.3 31.2 CLOSING A BUSINESS (ARAB WORLD RANK) 4 1 20 14 13 20 11 Time (years) 2.5 2.5 NO PRACTICE 5.0 4.2 NO PRACTICE 4.3 Cost (% of estate) 7 10 NO PRACTICE 18 22 NO PRACTICE 9 Recovery rate (cents on the dollar) 41.7 63.2 0.0 15.9 16.8 0.0 27.3 DOING BUSINESS INDICATORS 47 Kuwait Lebanon Mauritania Morocco Oman Qatar Saudi Arabia Ease of doing business (Arab world rank) 5 11 20 12 6 4 1 Ease of doing business (global rank) 61 108 166 128 65 39 13 STARTING A BUSINESS (ARAB WORLD RANK) 14 10 16 9 6 8 1 Procedures (number) 13 5 9 6 5 6 4 Time (days) 35 9 19 12 12 6 5 Cost (% of income per capita) 1 78.2 34.7 16.1 2.2 7.1 7.7 Min. capital (% of income per capita) 59.2 51 450.4 11.8 273.6 59 0 DEALING WITH CONSTRUCTION PERMITS (ARAB WORLD RANK) 7 14 18 10 15 3 4 Procedures (number) 25 20 25 19 16 19 17 Time (days) 104 211 201 163 242 76 94 Cost (% of income per capita) 124.1 194.8 506.3 263.7 427.9 0.6 32.8 EMPLOYING WORKERS (ARAB WORLD RANK) 3 7 15 20 2 8 9 Difficulty of hiring index (0-100) 0 44 56 89 33 0 0 Rigidity of hours index (0-100) 0 0 20 40 40 20 40 Difficulty of redundancy index (0-100) 0 30 40 50 0 20 0 Rigidity of employment index (0-100) 0 25 39 60 13 13 13 Redundancy cost (weeks of salary) 78 17 31 85 4 69 80 REGISTERING PROPERTY (ARAB WORLD RANK) 14 17 11 18 3 8 1 Procedures (number) 8 8 4 8 2 10 2 Time (days) 55 25 49 47 16 16 2 Cost (% of property value) 0.5 5.8 5.2 4.9 3.0 0.3 0.0 GETTING CREDIT (ARAB WORLD RANK) 4 4 14 4 9 11 1 Strength of legal rights index (0-10) 4 3 3 3 4 3 4 Depth of credit information index (0-6) 4 5 1 5 2 2 6 Public registry coverage (% of adults) 0.0 8.3 0.2 0.0 17.0 0.0 0.0 Private bureau coverage (% of adults) 30.4 0.0 0.0 14.0 0.0 0.0 17.9 PROTECTING INVESTORS (ARAB WORLD RANK) 2 8 17 19 8 8 1 Extent of disclosure index (0-10) 7 9 5 6 8 5 9 Extent of director liability index (0-10) 7 1 3 2 5 6 8 Ease of shareholder suits index (0-10) 5 5 3 1 2 4 4 Strength of investor protection index (0-10) 6.33 5 3.67 3 5 5 7 PAYING TAXES (ARAB WORLD RANK) 5 9 20 16 4 1 3 Payments (number per year) 15 19 38 28 14 1 14 Time (hours per year) 118 180 696 358 62 36 79 Total tax rate (% of profit) 15.5 30.2 86.1 41.7 21.6 11.3 14.5 TRADING ACROSS BORDERS (ARAB WORLD RANK) 12 11 19 9 16 7 2 Documents to export (number) 8 5 11 7 10 5 5 Time to export (days) 17 26 39 14 22 21 17 Cost to export (US$ per container) 1,060 1,002 1,520 700 821 735 681 Documents to import (number) 10 7 11 10 10 7 5 Time to import (days) 19 35 42 17 26 20 18 Cost to import (US$ per container) 1,217 1,203 1,523 1,000 1,037 657 678 ENFORCING CONTRACTS (ARAB WORLD RANK) 8 10 3 6 5 4 15 Procedures (number) 50 37 46 40 51 43 43 Time (days) 566 721 370 615 598 570 635 Cost (% of claim) 18.8 30.8 23.2 25.2 13.5 21.6 27.5 CLOSING A BUSINESS (ARAB WORLD RANK) 8 12 16 7 6 2 5 Time (years) 4.2 4.0 8.0 1.8 4.0 2.8 1.5 Cost (% of estate) 1 22 9 18 4 22 22 Recovery rate (cents on the dollar) 34.5 19.0 6.7 35.1 35.1 52.7 37.5 48 DOING BUSINESS IN THE ARAB WORLD 2010 Syrian Arab United Arab West Bank and Sudan Republic Tunisia Emirates Gaza Yemen, Rep. Ease of doing business (Arab world rank) 17 15 7 3 14 8 Ease of doing business (global rank) 154 143 69 33 139 99 STARTING A BUSINESS (ARAB WORLD RANK) 11 13 4 3 19 5 Procedures (number) 10 7 10 8 11 6 Time (days) 36 17 11 15 49 12 Cost (% of income per capita) 36 27.8 5.7 6.2 55 83 Min. capital (% of income per capita) 0 1012.5 0 0 220.4 0 DEALING WITH CONSTRUCTION PERMITS (ARAB WORLD RANK) 17 16 12 2 20 5 Procedures (number) 19 26 20 17 21 15 Time (days) 271 128 84 64 199 107 Cost (% of income per capita) 206.5 540.3 998.3 30.7 1,110.6 144.1 EMPLOYING WORKERS (ARAB WORLD RANK) 18 11 12 4 16 10 Difficulty of hiring index (0-100) 39 11 28 0 33 22 Rigidity of hours index (0-100) 20 0 13 20 40 20 Difficulty of redundancy index (0-100) 50 50 80 0 20 30 Rigidity of employment index (0-100) 36 20 40 7 31 24 Redundancy cost (weeks of salary) 118 80 17 84 91 17 REGISTERING PROPERTY (ARAB WORLD RANK) 5 12 9 2 10 6 Procedures (number) 6 4 4 1 7 6 Time (days) 9 19 39 2 47 19 Cost (% of property value) 3.0 28.0 6.1 2.0 0.7 3.8 GETTING CREDIT (ARAB WORLD RANK) 11 20 4 2 16 14 Strength of legal rights index (0-10) 5 1 3 4 0 2 Depth of credit information index (0-6) 0 0 5 5 3 2 Public registry coverage (% of adults) 0.0 0.0 19.9 7.3 6.5 0.2 Private bureau coverage (% of adults) 0.0 0.0 0.0 12.6 0.0 0.0 PROTECTING INVESTORS (ARAB WORLD RANK) 18 11 5 11 3 15 Extent of disclosure index (0-10) 0 6 5 4 6 6 Extent of director liability index (0-10) 6 5 5 7 5 4 Ease of shareholder suits index (0-10) 4 2 6 2 7 2 Strength of investor protection index (0-10) 3.33 4.33 5.33 4.33 6 4 PAYING TAXES (ARAB WORLD RANK) 13 14 15 2 8 18 Payments (number per year) 42 20 22 14 27 44 Time (hours per year) 180 336 228 12 154 248 Total tax rate (% of profit) 36.1 42.9 62.8 14.1 16.8 47.8 TRADING ACROSS BORDERS (ARAB WORLD RANK) 18 13 6 1 10 14 Documents to export (number) 6 8 5 4 6 6 Time to export (days) 32 15 15 8 25 27 Cost to export (US$ per container) 2,050 1,190 783 593 835 1,129 Documents to import (number) 6 9 7 5 6 9 Time to import (days) 46 21 21 9 40 25 Cost to import (US$ per container) 2,900 1,625 858 579 1,225 1,475 ENFORCING CONTRACTS (ARAB WORLD RANK) 16 20 2 13 7 1 Procedures (number) 53 55 39 49 44 36 Time (days) 810 872 565 537 600 520 Cost (% of claim) 19.8 29.3 21.8 26.2 21.2 16.5 CLOSING A BUSINESS (ARAB WORLD RANK) 20 9 3 15 20 10 Time (years) NO PRACTICE 4.1 1.3 5.1 NO PRACTICE 3.0 Cost (% of estate) NO PRACTICE 9 7 30 NO PRACTICE 8 Recovery rate (cents on the dollar) 0.0 29.5 52.3 10.2 0.0 28.6 Country tables 50 DOING BUSINESS IN THE ARAB WORLD 2010 COUNTRY PROFILE Algeria Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 51 73 110 122 122 136 123 135 148 Most difficult 160 (183) 168 Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders ALGERIA Ease of doing business (rank) 136 (AW 13) Middle East & North Africa GNI per capita (US$) 4,260 Upper middle income Population (m) 34.4 Starting a business (rank) 148 (AW 15) Protecting investors (rank) 73 (AW 5) Procedures (number) 14 Extent of disclosure index (0-10) 6 Time (days) 24 Extent of director liability index (0-10) 6 Cost (% of income per capita) 12.1 Ease of shareholder suits index (0-10) 4 Minimum capital (% of income per capita) 31 Strength of investor protection index (0-10) 5.3 Dealing with construction permits (rank) 110 (AW 13) Paying taxes (rank) 168 (AW 19) Procedures (number) 22 Payments (number per year) 34 Time (days) 240 Time (hours per year) 451 Cost (% of income per capita) 39.6 Total tax rate (% of profit) 72 Employing workers (rank) 122 (AW 14) Trading across borders (rank) 122 (AW 15) Difficulty of hiring index (0-100) 44 Documents to export (number) 8 Rigidity of hours index (0-100) 40 Time to export (days) 17 Difficulty of redundancy index (0-100) 40 Cost to export (US$ per container) 1,248 Rigidity of employment index (0-100) 41 Documents to import (number) 9 Redundancy cost (weeks of salary) 17 Time to import (days) 23 Cost to import (US$ per container) 1,428 Registering property (rank) 160 (AW 20) Procedures (number) 11 Enforcing contracts (rank) 123 (AW 11) Time (days) 47 Procedures (number) 46 Cost (% of property value) 7.1 Time (days) 630 Cost (% of claim) 21.9 Getting credit (rank) 135 (AW 11) Strength of legal rights index (0-10) 3 Closing a business (rank) 51 (AW 4) Depth of credit information index (0-6) 2 Time (years) 2.5 Public registry coverage (% of adults) 0.2 Cost (% of estate) 7 Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 41.7 COUNTRY TABLES 51 COUNTRY PROFILE Bahrain Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 20 14 13 22 13 32 26 63 57 87 117 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders BAHRAIN Ease of doing business (rank) 20 (AW 2) Middle East & North Africa GNI per capita (US$) 27,248 High income Population (m) 0.8 Starting a business (rank) 63 (AW 7) Protecting investors (rank) 57 (AW 4) Procedures (number) 7 Extent of disclosure index (0-10) 8 Time (days) 9 Extent of director liability index (0-10) 4 Cost (% of income per capita) 0.5 Ease of shareholder suits index (0-10) 5 Minimum capital (% of income per capita) 195.2 Strength of investor protection index (0-10) 5.7 Dealing with construction permits (rank) 14 (AW 1) Paying taxes (rank) 13 (AW 6) Procedures (number) 13 Payments (number per year) 25 Time (days) 43 Time (hours per year) 36 Cost (% of income per capita) 54.61 Total tax rate (% of profit) 15 Employing workers (rank) 13 (AW 1) Trading across borders (rank) 32 (AW 4) Difficulty of hiring index (0-100) 0 Documents to export (number) 5 Rigidity of hours index (0-100) 0 Time to export (days) 14 Difficulty of redundancy index (0-100) 30 Cost to export (US$ per container) 955 Rigidity of employment index (0-100) 10 Documents to import (number) 6 Redundancy cost (weeks of salary) 4 Time to import (days) 15 Cost to import (US$ per container) 995 Registering property (rank) 22 (AW 4) Procedures (number) 2 Enforcing contracts (rank) 117 (AW 9) Time (days) 31 Procedures (number) 48 Cost (% of property value) 0.9 Time (days) 635 Cost (% of claim) 14.7 Getting credit (rank) 87 (AW 4) Strength of legal rights index (0-10) 4 Closing a business (rank) 26 (AW 1) Depth of credit information index (0-6) 4 Time (years) 2.5 Public registry coverage (% of adults) 0.0 Cost (% of estate) 10 Private bureau coverage (% of adults) 34.9 Recovery rate (cents on the dollar) 63.2 52 DOING BUSINESS IN THE ARAB WORLD 2010 COUNTRY PROFILE Comoros Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 41 66 96 133 132 162 153 Most difficult 168 164 167 183 (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders COMOROS Ease of doing business (rank) 162 (AW 18) Sub-Saharan Africa GNI per capita (US$) 751 Low income Population (m) 0.6 Starting a business (rank) 168 (AW 17) Protecting investors (rank) 132 (AW 15) Procedures (number) 11 Extent of disclosure index (0-10) 6 Time (days) 24 Extent of director liability index (0-10) 1 Cost (% of income per capita) 182.1 Ease of shareholder suits index (0-10) 5 Minimum capital (% of income per capita) 261.8 Strength of investor protection index (0-10) 4 Dealing with construction permits (rank) 66 (AW 6) Paying taxes (rank) 41 (AW 10) Procedures (number) 18 Payments (number per year) 20 Time (days) 164 Time (hours per year) 100 Cost (% of income per capita) 72.6 Total tax rate (% of profit) 41.1 Employing workers (rank) 164 (AW 19) Trading across borders (rank) 133 (AW 17) Difficulty of hiring index (0-100) 39 Documents to export (number) 10 Rigidity of hours index (0-100) 40 Time to export (days) 30 Difficulty of redundancy index (0-100) 40 Cost to export (US$ per container) 1,073 Rigidity of employment index (0-100) 40 Documents to import (number) 10 Redundancy cost (weeks of salary) 100 Time to import (days) 21 Cost to import (US$ per container) 1,057 Registering property (rank) 96 (AW 15) Procedures (number) 5 Enforcing contracts (rank) 153 (AW 18) Time (days) 24 Procedures (number) 43 Cost (% of property value) 20.8 Time (days) 506 Cost (% of claim) 89.4 Getting credit (rank) 167 (AW 16) Strength of legal rights index (0-10) 3 Closing a business (rank) 183 (AW 20) Depth of credit information index (0-6) 0 Time (years) NO PRACTICE Public registry coverage (% of adults) 0.0 Cost (% of estate) NO PRACTICE Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 0.0 COUNTRY TABLES 53 COUNTRY PROFILE Djibouti Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 34 65 102 140 135 163 151 177 Most difficult 177 178 161 (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders DJIBOUTI Ease of doing business (rank) 163 (AW 19) Middle East & North Africa GNI per capita (US$) 1,130 Lower middle income Population (m) 0.8 Starting a business (rank) 177 (AW 20) Protecting investors (rank) 178 (AW 20) Procedures (number) 11 Extent of disclosure index (0-10) 5 Time (days) 37 Extent of director liability index (0-10) 2 Cost (% of income per capita) 195.1 Ease of shareholder suits index (0-10) 0 Minimum capital (% of income per capita) 500.5 Strength of investor protection index (0-10) 2.3 Dealing with construction permits (rank) 102 (AW 11) Paying taxes (rank) 65 (AW 12) Procedures (number) 14 Payments (number per year) 35 Time (days) 195 Time (hours per year) 114 Cost (% of income per capita) 948.3 Total tax rate (% of profit) 38.7 Employing workers (rank) 151 (AW 17) Trading across borders (rank) 34 (AW 5) Difficulty of hiring index (0-100) 67 Documents to export (number) 5 Rigidity of hours index (0-100) 40 Time to export (days) 19 Difficulty of redundancy index (0-100) 30 Cost to export (US$ per container) 836 Rigidity of employment index (0-100) 46 Documents to import (number) 5 Redundancy cost (weeks of salary) 56 Time to import (days) 18 Cost to import (US$ per container) 911 Registering property (rank) 140 (AW 19) Procedures (number) 7 Enforcing contracts (rank) 161 (AW 19) Time (days) 40 Procedures (number) 40 Cost (% of property value) 13.2 Time (days) 1,225 Cost (% of claim) 34 Getting credit (rank) 177 (AW 19) Strength of legal rights index (0-10) 1 Closing a business (rank) 135 (AW 14) Depth of credit information index (0-6) 1 Time (years) 5.0 Public registry coverage (% of adults) 0.2 Cost (% of estate) 18 Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 15.9 54 DOING BUSINESS IN THE ARAB WORLD 2010 COUNTRY PROFILE Egypt, Arab Rep. Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 24 29 71 73 87 106 120 132 140 156 148 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders EGYPT, ARAB REP. Ease of doing business (rank) 106 (AW 10) Middle East & North Africa GNI per capita (US$) 1,801 Lower middle income Population (m) 81.5 Starting a business (rank) 24 (AW 2) Protecting investors (rank) 73 (AW 5) Procedures (number) 6 Extent of disclosure index (0-10) 8 Time (days) 7 Extent of director liability index (0-10) 3 Cost (% of income per capita) 16.1 Ease of shareholder suits index (0-10) 5 Minimum capital (% of income per capita) 0 Strength of investor protection index (0-10) 5.3 Dealing with construction permits (rank) 156 (AW 19) Paying taxes (rank) 140 (AW 17) Procedures (number) 25 Payments (number per year) 29 Time (days) 218 Time (hours per year) 480 Cost (% of income per capita) 331.6 Total tax rate (% of profit) 43 Employing workers (rank) 120 (AW 13) Trading across borders (rank) 29 (AW 3) Difficulty of hiring index (0-100) 0 Documents to export (number) 6 Rigidity of hours index (0-100) 20 Time to export (days) 14 Difficulty of redundancy index (0-100) 60 Cost to export (US$ per container) 737 Rigidity of employment index (0-100) 27 Documents to import (number) 6 Redundancy cost (weeks of salary) 132 Time to import (days) 15 Cost to import (US$ per container) 823 Registering property (rank) 87 (AW 13) Procedures (number) 7 Enforcing contracts (rank) 148 (AW 17) Time (days) 72 Procedures (number) 41 Cost (% of property value) 0.9 Time (days) 1,010 Cost (% of claim) 26.2 Getting credit (rank) 71 (AW 2) Strength of legal rights index (0-10) 3 Closing a business (rank) 132 (AW 13) Depth of credit information index (0-6) 6 Time (years) 4.2 Public registry coverage (% of adults) 2.5 Cost (% of estate) 22 Private bureau coverage (% of adults) 8.2 Recovery rate (cents on the dollar) 16.8 COUNTRY TABLES 55 COUNTRY PROFILE Iraq Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 53 53 59 96 119 139 153 Most difficult 175 167 180 (183) 183 Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders IRAQ Ease of doing business (rank) 153 (AW 16) Middle East & North Africa GNI per capita (US$) 2,815 Lower middle income Population (m) 30.1 Starting a business (rank) 175 (AW 18) Protecting investors (rank) 119 (AW 11) Procedures (number) 11 Extent of disclosure index (0-10) 4 Time (days) 77 Extent of director liability index (0-10) 5 Cost (% of income per capita) 75.9 Ease of shareholder suits index (0-10) 4 Minimum capital (% of income per capita) 30.3 Strength of investor protection index (0-10) 4.3 Dealing with construction permits (rank) 94 (AW 9) Paying taxes (rank) 53 (AW 11) Procedures (number) 14 Payments (number per year) 13 Time (days) 215 Time (hours per year) 312 Cost (% of income per capita) 397.9 Total tax rate (% of profit) 28.4 Employing workers (rank) 59 (AW 6) Trading across borders (rank) 180 (AW 20) Difficulty of hiring index (0-100) 33 Documents to export (number) 10 Rigidity of hours index (0-100) 20 Time to export (days) 102 Difficulty of redundancy index (0-100) 20 Cost to export (US$ per container) 3,900 Rigidity of employment index (0-100) 24 Documents to import (number) 10 Redundancy cost (weeks of salary) 0 Time to import (days) 101 Cost to import (US$ per container) 3,900 Registering property (rank) 53 (AW 7) Procedures (number) 5 Enforcing contracts (rank) 139 (AW 14) Time (days) 8 Procedures (number) 51 Cost (% of property value) 7.7 Time (days) 520 Cost (% of claim) 27.3 Getting credit (rank) 167 (AW 16) Strength of legal rights index (0-10) 3 Closing a business (rank) 183 (AW 20) Depth of credit information index (0-6) 0 Time (years) NO PRACTICE Public registry coverage (% of adults) 0.0 Cost (% of estate) NO PRACTICE Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 0.0 56 DOING BUSINESS IN THE ARAB WORLD 2010 COUNTRY PROFILE Jordan Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 26 51 71 100 92 106 96 119 125 127 124 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders JORDAN Ease of doing business (rank) 100 (AW 9) Middle East & North Africa GNI per capita (US$) 3,306 Lower middle income Population (m) 5.9 Starting a business (rank) 125 (AW 12) Protecting investors (rank) 119 (AW 11) Procedures (number) 8 Extent of disclosure index (0-10) 5 Time (days) 13 Extent of director liability index (0-10) 4 Cost (% of income per capita) 49.5 Ease of shareholder suits index (0-10) 4 Minimum capital (% of income per capita) 19.9 Strength of investor protection index (0-10) 4.3 Dealing with construction permits (rank) 92 (AW 8) Paying taxes (rank) 26 (AW 7) Procedures (number) 19 Payments (number per year) 26 Time (days) 87 Time (hours per year) 101 Cost (% of income per capita) 697.1 Total tax rate (% of profit) 31.1 Employing workers (rank) 51 (AW 5) Trading across borders (rank) 71 (AW 8) Difficulty of hiring index (0-100) 11 Documents to export (number) 7 Rigidity of hours index (0-100) 0 Time to export (days) 17 Difficulty of redundancy index (0-100) 60 Cost to export (US$ per container) 730 Rigidity of employment index (0-100) 24 Documents to import (number) 7 Redundancy cost (weeks of salary) 4 Time to import (days) 19 Cost to import (US$ per container) 1,290 Registering property (rank) 106 (AW 16) Procedures (number) 7 Enforcing contracts (rank) 124 (AW 12) Time (days) 21 Procedures (number) 38 Cost (% of property value) 7.5 Time (days) 689 Cost (% of claim) 31.2 Getting credit (rank) 127 (AW 9) Strength of legal rights index (0-10) 4 Closing a business (rank) 96 (AW 11) Depth of credit information index (0-6) 2 Time (years) 4.3 Public registry coverage (% of adults) 1.0 Cost (% of estate) 9 Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 27.3 COUNTRY TABLES 57 COUNTRY PROFILE Kuwait Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 11 24 27 61 89 69 81 87 109 113 137 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders KUWAIT Ease of doing business (rank) 61 (AW 5) Middle East & North Africa GNI per capita (US$) 45,920 High income Population (m) 2.7 Starting a business (rank) 137 (AW 14) Protecting investors (rank) 27 (AW 2) Procedures (number) 13 Extent of disclosure index (0-10) 7 Time (days) 35 Extent of director liability index (0-10) 7 Cost (% of income per capita) 1 Ease of shareholder suits index (0-10) 5 Minimum capital (% of income per capita) 59.2 Strength of investor protection index (0-10) 6.3 Dealing with construction permits (rank) 81 (AW 7) Paying taxes (rank) 11 (AW 5) Procedures (number) 25 Payments (number per year) 15 Time (days) 104 Time (hours per year) 118 Cost (% of income per capita) 124.1 Total tax rate (% of profit) 15.5 Employing workers (rank) 24 (AW 3) Trading across borders (rank) 109 (AW 12) Difficulty of hiring index (0-100) 0 Documents to export (number) 8 Rigidity of hours index (0-100) 0 Time to export (days) 17 Difficulty of redundancy index (0-100) 0 Cost to export (US$ per container) 1,060 Rigidity of employment index (0-100) 0 Documents to import (number) 10 Redundancy cost (weeks of salary) 78 Time to import (days) 19 Cost to import (US$ per container) 1,217 Registering property (rank) 89 (AW 14) Procedures (number) 8 Enforcing contracts (rank) 113 (AW 8) Time (days) 55 Procedures (number) 50 Cost (% of property value) 0.5 Time (days) 566 Cost (% of claim) 18.8 Getting credit (rank) 87 (AW 4) Strength of legal rights index (0-10) 4 Closing a business (rank) 69 (AW 8) Depth of credit information index (0-6) 4 Time (years) 4.2 Public registry coverage (% of adults) 0.0 Cost (% of estate) 1 Private bureau coverage (% of adults) 30.4 Recovery rate (cents on the dollar) 34.5 58 DOING BUSINESS IN THE ARAB WORLD 2010 COUNTRY PROFILE Lebanon Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 34 66 87 95 108 108 93 111 121 125 124 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders LEBANON Ease of doing business (rank) 108 (AW 11) Middle East & North Africa GNI per capita (US$) 6,353 Upper middle income Population (m) 4.1 Starting a business (rank) 108 (AW 10) Protecting investors (rank) 93 (AW 8) Procedures (number) 5 Extent of disclosure index (0-10) 9 Time (days) 9 Extent of director liability index (0-10) 1 Cost (% of income per capita) 78.2 Ease of shareholder suits index (0-10) 5 Minimum capital (% of income per capita) 51 Strength of investor protection index (0-10) 5 Dealing with construction permits (rank) 125 (AW 14) Paying taxes (rank) 34 (AW 9) Procedures (number) 20 Payments (number per year) 19 Time (days) 211 Time (hours per year) 180 Cost (% of income per capita) 194.8 Total tax rate (% of profit) 30.2 Employing workers (rank) 66 (AW 7) Trading across borders (rank) 95 (AW 11) Difficulty of hiring index (0-100) 44 Documents to export (number) 5 Rigidity of hours index (0-100) 0 Time to export (days) 26 Difficulty of redundancy index (0-100) 30 Cost to export (US$ per container) 1,002 Rigidity of employment index (0-100) 25 Documents to import (number) 7 Redundancy cost (weeks of salary) 17 Time to import (days) 35 Cost to import (US$ per container) 1,203 Registering property (rank) 111 (AW 17) Procedures (number) 8 Enforcing contracts (rank) 121 (AW 10) Time (days) 25 Procedures (number) 37 Cost (% of property value) 5.8 Time (days) 721 Cost (% of claim) 30.8 Getting credit (rank) 87 (AW 4) Strength of legal rights index (0-10) 3 Closing a business (rank) 124 (AW 12) Depth of credit information index (0-6) 5 Time (years) 4.0 Public registry coverage (% of adults) 8.3 Cost (% of estate) 22 Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 19.0 COUNTRY TABLES 59 COUNTRY PROFILE Mauritania Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 74 83 125 149 150 147 154 150 175 Most difficult 166 163 (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders MAURITANIA Ease of doing business (rank) 166 (AW 20) Sub-Saharan Africa GNI per capita (US$) 906 Low income Population (m) 3.2 Starting a business (rank) 149 (AW 16) Protecting investors (rank) 147 (AW 17) Procedures (number) 9 Extent of disclosure index (0-10) 5 Time (days) 19 Extent of director liability index (0-10) 3 Cost (% of income per capita) 34.7 Ease of shareholder suits index (0-10) 3 Minimum capital (% of income per capita) 450.4 Strength of investor protection index (0-10) 3.7 Dealing with construction permits (rank) 154 (AW 18) Paying taxes (rank) 175 (AW 20) Procedures (number) 25 Payments (number per year) 38 Time (days) 201 Time (hours per year) 696 Cost (% of income per capita) 506.3 Total tax rate (% of profit) 86.1 Employing workers (rank) 125 (AW 15) Trading across borders (rank) 163 (AW 19) Difficulty of hiring index (0-100) 56 Documents to export (number) 11 Rigidity of hours index (0-100) 20 Time to export (days) 39 Difficulty of redundancy index (0-100) 40 Cost to export (US$ per container) 1,520 Rigidity of employment index (0-100) 39 Documents to import (number) 11 Redundancy cost (weeks of salary) 31 Time to import (days) 42 Cost to import (US$ per container) 1,523 Registering property (rank) 74 (AW 11) Procedures (number) 4 Enforcing contracts (rank) 83 (AW 3) Time (days) 49 Procedures (number) 46 Cost (% of property value) 5.2 Time (days) 370 Cost (% of claim) 23.2 Getting credit (rank) 150 (AW 14) Strength of legal rights index (0-10) 3 Closing a business (rank) 150 (AW 16) Depth of credit information index (0-6) 1 Time (years) 8.0 Public registry coverage (% of adults) 0.2 Cost (% of estate) 9 Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 6.7 60 DOING BUSINESS IN THE ARAB WORLD 2010 COUNTRY PROFILE Morocco Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 76 72 67 87 99 108 123 125 128 Most difficult 165 (183) 176 Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders MOROCCO Ease of doing business (rank) 128 (AW 12) Middle East & North Africa GNI per capita (US$) 2,579 Lower middle income Population (m) 31.2 Starting a business (rank) 76 (AW 9) Protecting investors (rank) 165 (AW 19) Procedures (number) 6 Extent of disclosure index (0-10) 6 Time (days) 12 Extent of director liability index (0-10) 2 Cost (% of income per capita) 16.1 Ease of shareholder suits index (0-10) 1 Minimum capital (% of income per capita) 11.8 Strength of investor protection index (0-10) 3 Dealing with construction permits (rank) 99 (AW 10) Paying taxes (rank) 125 (AW 16) Procedures (number) 19 Payments (number per year) 28 Time (days) 163 Time (hours per year) 358 Cost (% of income per capita) 263.7 Total tax rate (% of profit) 41.7 Employing workers (rank) 176 (AW 20) Trading across borders (rank) 72 (AW 9) Difficulty of hiring index (0-100) 89 Documents to export (number) 7 Rigidity of hours index (0-100) 40 Time to export (days) 14 Difficulty of redundancy index (0-100) 50 Cost to export (US$ per container) 700 Rigidity of employment index (0-100) 60 Documents to import (number) 10 Redundancy cost (weeks of salary) 85 Time to import (days) 17 Cost to import (US$ per container) 1,000 Registering property (rank) 123 (AW 18) Procedures (number) 8 Enforcing contracts (rank) 108 (AW 6) Time (days) 47 Procedures (number) 40 Cost (% of property value) 4.9 Time (days) 615 Cost (% of claim) 25.2 Getting credit (rank) 87 (AW 4) Strength of legal rights index (0-10) 3 Closing a business (rank) 67 (AW 7) Depth of credit information index (0-6) 5 Time (years) 1.8 Public registry coverage (% of adults) 0.0 Cost (% of estate) 18 Private bureau coverage (% of adults) 14.0 Recovery rate (cents on the dollar) 35.1 COUNTRY TABLES 61 COUNTRY PROFILE Oman Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 8 20 21 65 62 93 66 106 130 127 123 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders OMAN Ease of doing business (rank) 65 (AW 6) Middle East & North Africa GNI per capita (US$) 18,988 High income Population (m) 2.8 Starting a business (rank) 62 (AW 6) Protecting investors (rank) 93 (AW 8) Procedures (number) 5 Extent of disclosure index (0-10) 8 Time (days) 12 Extent of director liability index (0-10) 5 Cost (% of income per capita) 2.2 Ease of shareholder suits index (0-10) 2 Minimum capital (% of income per capita) 273.6 Strength of investor protection index (0-10) 5 Dealing with construction permits (rank) 130 (AW 15) Paying taxes (rank) 8 (AW 4) Procedures (number) 16 Payments (number per year) 14 Time (days) 242 Time (hours per year) 62 Cost (% of income per capita) 427.9 Total tax rate (% of profit) 21.6 Employing workers (rank) 21 (AW 2) Trading across borders (rank) 123 (AW 16) Difficulty of hiring index (0-100) 0 Documents to export (number) 10 Rigidity of hours index (0-100) 40 Time to export (days) 22 Difficulty of redundancy index (0-100) 0 Cost to export (US$ per container) 821 Rigidity of employment index (0-100) 13 Documents to import (number) 10 Redundancy cost (weeks of salary) 4 Time to import (days) 26 Cost to import (US$ per container) 1,037 Registering property (rank) 20 (AW 3) Procedures (number) 2 Enforcing contracts (rank) 106 (AW 5) Time (days) 16 Procedures (number) 51 Cost (% of property value) 3.0 Time (days) 598 Cost (% of claim) 13.5 Getting credit (rank) 127 (AW 9) Strength of legal rights index (0-10) 4 Closing a business (rank) 66 (AW 6) Depth of credit information index (0-6) 2 Time (years) 4.0 Public registry coverage (% of adults) 17.0 Cost (% of estate) 4 Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 35.1 62 DOING BUSINESS IN THE ARAB WORLD 2010 COUNTRY PROFILE Qatar Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 2 28 41 33 39 55 68 68 93 95 135 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders QATAR Ease of doing business (rank) 39 (AW 4) Middle East & North Africa GNI per capita (US$) 93,204 High income Population (m) 1.3 Starting a business (rank) 68 (AW 8) Protecting investors (rank) 93 (AW 8) Procedures (number) 6 Extent of disclosure index (0-10) 5 Time (days) 6 Extent of director liability index (0-10) 6 Cost (% of income per capita) 7.1 Ease of shareholder suits index (0-10) 4 Minimum capital (% of income per capita) 59 Strength of investor protection index (0-10) 5 Dealing with construction permits (rank) 28 (AW 3) Paying taxes (rank) 2 (AW 1) Procedures (number) 19 Payments (number per year) 1 Time (days) 76 Time (hours per year) 36 Cost (% of income per capita) 0.6 Total tax rate (% of profit) 11.3 Employing workers (rank) 68 (AW 8) Trading across borders (rank) 41 (AW 7) Difficulty of hiring index (0-100) 0 Documents to export (number) 5 Rigidity of hours index (0-100) 20 Time to export (days) 21 Difficulty of redundancy index (0-100) 20 Cost to export (US$ per container) 735 Rigidity of employment index (0-100) 13 Documents to import (number) 7 Redundancy cost (weeks of salary) 69 Time to import (days) 20 Cost to import (US$ per container) 657 Registering property (rank) 55 (AW 8) Procedures (number) 10 Enforcing contracts (rank) 95 (AW 4) Time (days) 16 Procedures (number) 43 Cost (% of property value) 0.3 Time (days) 570 Cost (% of claim) 21.6 Getting credit (rank) 135 (AW 11) Strength of legal rights index (0-10) 3 Closing a business (rank) 33 (AW 2) Depth of credit information index (0-6) 2 Time (years) 2.8 Public registry coverage (% of adults) 0.0 Cost (% of estate) 22 Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 52.7 COUNTRY TABLES 63 COUNTRY PROFILE Saudi Arabia Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 1 13 13 16 7 23 33 60 73 61 140 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders SAUDI ARABIA Ease of doing business (rank) 13 (AW 1) Middle East & North Africa GNI per capita (US$) 19,345 High income Population (m) 24.6 Starting a business (rank) 13 (AW 1) Protecting investors (rank) 16 (AW 1) Procedures (number) 4 Extent of disclosure index (0-10) 9 Time (days) 5 Extent of director liability index (0-10) 8 Cost (% of income per capita) 7.7 Ease of shareholder suits index (0-10) 4 Minimum capital (% of income per capita) 0 Strength of investor protection index (0-10) 7 Dealing with construction permits (rank) 33 (AW 4) Paying taxes (rank) 7 (AW 3) Procedures (number) 17 Payments (number per year) 14 Time (days) 94 Time (hours per year) 79 Cost (% of income per capita) 32.8 Total tax rate (% of profit) 14.5 Employing workers (rank) 73 (AW 9) Trading across borders (rank) 23 (AW 2) Difficulty of hiring index (0-100) 0 Documents to export (number) 5 Rigidity of hours index (0-100) 40 Time to export (days) 17 Difficulty of redundancy index (0-100) 0 Cost to export (US$ per container) 681 Rigidity of employment index (0-100) 13 Documents to import (number) 5 Redundancy cost (weeks of salary) 80 Time to import (days) 18 Cost to import (US$ per container) 678 Registering property (rank) 1 (AW 1) Procedures (number) 2 Enforcing contracts (rank) 140 (AW 15) Time (days) 2 Procedures (number) 43 Cost (% of property value) 0.0 Time (days) 635 Cost (% of claim) 27.5 Getting credit (rank) 61 (AW 1) Strength of legal rights index (0-10) 4 Closing a business (rank) 60 (AW 5) Depth of credit information index (0-6) 6 Time (years) 1.5 Public registry coverage (% of adults) 0.0 Cost (% of estate) 22 Private bureau coverage (% of adults) 17.9 Recovery rate (cents on the dollar) 37.5 64 DOING BUSINESS IN THE ARAB WORLD 2010 COUNTRY PROFILE Sudan Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 37 94 118 139 135 142 153 146 154 154 Most difficult (183) 183 Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders SUDAN Ease of doing business (rank) 154 (AW 17) Sub-Saharan Africa GNI per capita (US$) 1,125 Lower middle income Population (m) 41.3 Starting a business (rank) 118 (AW 11) Protecting investors (rank) 154 (AW 18) Procedures (number) 10 Extent of disclosure index (0-10) 0 Time (days) 36 Extent of director liability index (0-10) 6 Cost (% of income per capita) 36 Ease of shareholder suits index (0-10) 4 Minimum capital (% of income per capita) 0 Strength of investor protection index (0-10) 3.3 Dealing with construction permits (rank) 139 (AW 17) Paying taxes (rank) 94 (AW 13) Procedures (number) 19 Payments (number per year) 42 Time (days) 271 Time (hours per year) 180 Cost (% of income per capita) 206.5 Total tax rate (% of profit) 36.1 Employing workers (rank) 153 (AW 18) Trading across borders (rank) 142 (AW 18) Difficulty of hiring index (0-100) 39 Documents to export (number) 6 Rigidity of hours index (0-100) 20 Time to export (days) 32 Difficulty of redundancy index (0-100) 50 Cost to export (US$ per container) 2,050 Rigidity of employment index (0-100) 36 Documents to import (number) 6 Redundancy cost (weeks of salary) 118 Time to import (days) 46 Cost to import (US$ per container) 2,900 Registering property (rank) 37 (AW 5) Procedures (number) 6 Enforcing contracts (rank) 146 (AW 16) Time (days) 9 Procedures (number) 53 Cost (% of property value) 3.0 Time (days) 810 Cost (% of claim) 19.8 Getting credit (rank) 135 (AW 11) Strength of legal rights index (0-10) 5 Closing a business (rank) 183 (AW 20) Depth of credit information index (0-6) 0 Time (years) NO PRACTICE Public registry coverage (% of adults) 0.0 Cost (% of estate) NO PRACTICE Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 0.0 COUNTRY TABLES 65 COUNTRY PROFILE Syrian Arab Republic Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 82 87 91 105 133 118 119 131 143 176 Most difficult 181 (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders SYRIAN ARAB REPUBLIC Ease of doing business (rank) 143 (AW 15) Middle East & North Africa GNI per capita (US$) 2,094 Lower middle income Population (m) 21.2 Starting a business (rank) 133 (AW 13) Protecting investors (rank) 119 (AW 11) Procedures (number) 7 Extent of disclosure index (0-10) 6 Time (days) 17 Extent of director liability index (0-10) 5 Cost (% of income per capita) 27.8 Ease of shareholder suits index (0-10) 2 Minimum capital (% of income per capita) 1012.5 Strength of investor protection index (0-10) 4.3 Dealing with construction permits (rank) 132 (AW 16) Paying taxes (rank) 105 (AW 14) Procedures (number) 26 Payments (number per year) 20 Time (days) 128 Time (hours per year) 336 Cost (% of income per capita) 540.3 Total tax rate (% of profit) 42.9 Employing workers (rank) 91 (AW 11) Trading across borders (rank) 118 (AW 13) Difficulty of hiring index (0-100) 11 Documents to export (number) 8 Rigidity of hours index (0-100) 0 Time to export (days) 15 Difficulty of redundancy index (0-100) 50 Cost to export (US$ per container) 1,190 Rigidity of employment index (0-100) 20 Documents to import (number) 9 Redundancy cost (weeks of salary) 80 Time to import (days) 21 Cost to import (US$ per container) 1,625 Registering property (rank) 82 (AW 12) Procedures (number) 4 Enforcing contracts (rank) 176 (AW 20) Time (days) 19 Procedures (number) 55 Cost (% of property value) 28.0 Time (days) 872 Cost (% of claim) 29.3 Getting credit (rank) 181 (AW 20) Strength of legal rights index (0-10) 1 Closing a business (rank) 87 (AW 9) Depth of credit information index (0-6) 0 Time (years) 4.1 Public registry coverage (% of adults) 0.0 Cost (% of estate) 9 Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 29.5 66 DOING BUSINESS IN THE ARAB WORLD 2010 COUNTRY PROFILE Tunisia Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 40 34 47 59 73 69 77 87 107 108 118 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders TUNISIA Ease of doing business (rank) 69 (AW 7) Middle East & North Africa GNI per capita (US$) 3,292 Lower middle income Population (millions) 10.3 Starting a business (rank) 47 (AW 4) Protecting investors (rank) 73 (AW 5) Procedures (number) 10 Extent of disclosure index (0-10) 5 Time (days) 11 Extent of director liability index (0-10) 5 Cost (% of income per capita) 5.7 Ease of shareholder suits index (0-10) 6 Minimum capital (% of income per capita) 0 Strength of investor protection index (0-10) 5.3 Dealing with construction permits (rank) 107 (AW 12) Paying taxes (rank) 118 (AW 15) Procedures (number) 20 Payments (number per year) 22 Time (days) 84 Time (hours per year) 228 Cost (% of income per capita) 998.3 Total tax rate (% of profit) 62.8 Employing workers (rank) 108 (AW 12) Trading across borders (rank) 40 (AW 6) Difficulty of hiring index (0-100) 28 Documents to export (number) 5 Rigidity of hours index (0-100) 13 Time to export (days) 15 Difficulty of redundancy index (0-100) 80 Cost to export (US$ per container) 783 Rigidity of employment index (0-100) 40 Documents to import (number) 7 Redundancy cost (weeks of salary) 17 Time to import (days) 21 Cost to import (US$ per container) 858 Registering property (rank) 59 (AW 9) Procedures (number) 4 Enforcing contracts (rank) 77 (AW 2) Time (days) 39 Procedures (number) 39 Cost (% of property value) 6.1 Time (days) 565 Cost (% of claim) 21.8 Getting credit (rank) 87 (AW 4) Strength of legal rights index (0-10) 3 Closing a business (rank) 34 (AW 3) Depth of credit information index (0-6) 5 Time (years) 1.3 Public registry coverage (% of adults) 19.9 Cost (% of estate) 7 Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 52.3 COUNTRY TABLES 67 COUNTRY PROFILE United Arab Emirates Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 7 25 4 5 33 44 50 71 119 134 143 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders UNITED ARAB EMIRATES Ease of doing business (rank) 33 (AW 3) Middle East & North Africa GNI per capita (US$) 54,607 High income Population (m) 4.5 Starting a business (rank) 44 (AW 3) Protecting investors (rank) 119 (AW 11) Procedures (number) 8 Extent of disclosure index (0-10) 4 Time (days) 15 Extent of director liability index (0-10) 7 Cost (% of income per capita) 6.2 Ease of shareholder suits index (0-10) 2 Minimum capital (% of income per capita) 0 Strength of investor protection index (0-10) 4.3 Dealing with construction permits (rank) 27 (AW 2) Paying taxes (rank) 4 (AW 2) Procedures (number) 17 Payments (number per year) 14 Time (days) 64 Time (hours per year) 12 Cost (% of income per capita) 30.7 Total tax rate (% of profit) 14.1 Employing workers (rank) 50 (AW 4) Trading across borders (rank) 5 (AW 1) Difficulty of hiring index (0-100) 0 Documents to export (number) 4 Rigidity of hours index (0-100) 20 Time to export (days) 8 Difficulty of redundancy index (0-100) 0 Cost to export (US$ per container) 593 Rigidity of employment index (0-100) 7 Documents to import (number) 5 Redundancy cost (weeks of salary) 84 Time to import (days) 9 Cost to import (US$ per container) 579 Registering property (rank) 7 (AW 2) Procedures (number) 1 Enforcing contracts (rank) 134 (AW 13) Time (days) 2 Procedures (number) 49 Cost (% of property value) 2.0 Time (days) 537 Cost (% of claim) 26.2 Getting credit (rank) 71 (AW 2) Strength of legal rights index (0-10) 4 Closing a business (rank) 143 (AW 15) Depth of credit information index (0-6) 5 Time (years) 5.1 Public registry coverage (% of adults) 7.3 Cost (% of estate) 30 Private bureau coverage (% of adults) 12.6 Recovery rate (cents on the dollar) 10.2 68 DOING BUSINESS IN THE ARAB WORLD 2010 COUNTRY PROFILE West Bank and Gaza Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 28 41 73 92 111 139 135 176 157 Most difficult 167 (183) 183 Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders WEST BANK AND GAZA Ease of doing business (rank) 139 (AW 14) Middle East & North Africa GNI per capita (US$) 1,564 Lower middle income Population (m) 3.8 Starting a business (rank) 176 (AW 19) Protecting investors (rank) 41 (AW 3) Procedures (number) 11 Extent of disclosure index (0-10) 6 Time (days) 49 Extent of director liability index (0-10) 5 Cost (% of income per capita) 55 Ease of shareholder suits index (0-10) 7 Minimum capital (% of income per capita) 220.4 Strength of investor protection index (0-10) 6 Dealing with construction permits (rank) 157 (AW 20) Paying taxes (rank) 28 (AW 8) Procedures (number) 21 Payments (number per year) 27 Time (days) 199 Time (hours per year) 154 Cost (% of income per capita) 1,110.6 Total tax rate (% of profit) 16.8 Employing workers (rank) 135 (AW 16) Trading across borders (rank) 92 (AW 10) Difficulty of hiring index (0-100) 33 Documents to export (number) 6 Rigidity of hours index (0-100) 40 Time to export (days) 25 Difficulty of redundancy index (0-100) 20 Cost to export (US$ per container) 835 Rigidity of employment index (0-100) 31 Documents to import (number) 6 Redundancy cost (weeks of salary) 91 Time to import (days) 40 Cost to import (US$ per container) 1,225 Registering property (rank) 73 (AW 10) Procedures (number) 7 Enforcing contracts (rank) 111 (AW 7) Time (days) 47 Procedures (number) 44 Cost (% of property value) 0.7 Time (days) 600 Cost (% of claim) 21.2 Getting credit (rank) 167 (AW 16) Strength of legal rights index (0-10) 0 Closing a business (rank) 183 (AW 20) Depth of credit information index (0-6) 3 Time (years) NO PRACTICE Public registry coverage (% of adults) 6.5 Cost (% of estate) NO PRACTICE Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 0.0 COUNTRY TABLES 69 COUNTRY PROFILE Yemen, Rep. Ranking NEW HONG KONG SAUDI NEW SINGAPORE ZEALAND CHINA AUSTRALIA ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE LUXEMBOURG JAPAN EASIEST (1) 35 53 51 50 74 89 99 132 120 150 148 Most difficult (183) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business construction workers property credit investors taxes across contracts business business permits borders YEMEN, REP. Ease of doing business (rank) 99 (AW 8) Middle East & North Africa GNI per capita (US$) 870 Low income Population (millions) 22.4 Starting a business (rank) 53 (AW 5) Protecting investors (rank) 132 (AW 15) Procedures (number) 6 Extent of disclosure index (0-10) 6 Time (days) 12 Extent of director liability index (0-10) 4 Cost (% of income per capita) 83 Ease of shareholder suits index (0-10) 2 Minimum capital (% of income per capita) 0 Strength of investor protection index (0-10) 4 Dealing with construction permits (rank) 50 (AW 5) Paying taxes (rank) 148 (AW 18) Procedures (number) 15 Payments (number per year) 44 Time (days) 107 Time (hours per year) 248 Cost (% of income per capita) 144.1 Total tax rate (% of profit) 47.8 Employing workers (rank) 74 (AW 10) Trading across borders (rank) 120 (AW 14) Difficulty of hiring index (0-100) 22 Documents to export (number) 6 Rigidity of hours index (0-100) 20 Time to export (days) 27 Difficulty of redundancy index (0-100) 30 Cost to export (US$ per container) 1,129 Rigidity of employment index (0-100) 24 Documents to import (number) 9 Redundancy cost (weeks of salary) 17 Time to import (days) 25 Cost to import (US$ per container) 1,475 Registering property (rank) 50 (AW 6) Procedures (number) 6 Enforcing contracts (rank) 35 (AW 1) Time (days) 19 Procedures (number) 36 Cost (% of property value) 3.8 Time (days) 520 Cost (% of claim) 16.5 Getting credit (rank) 150 (AW 14) Strength of legal rights index (0-10) 2 Closing a business (rank) 89 (AW 10) Depth of credit information index (0-6) 2 Time (years) 3.0 Public registry coverage (% of adults) 0.2 Cost (% of estate) 8 Private bureau coverage (% of adults) 0.0 Recovery rate (cents on the dollar) 28.6 70 DOING BUSINESS IN THE ARAB WORLD 2010 Acknowledgments Doing Business in the Arab World 2010 Aliyev, Preeti Endlaw, Felipe Iturralde was prepared by a team led by Yara and Graeme Littler. The Doing Business Salem and Dahlia Khalifa. Doing Busi- 2010 report media and marketing strat- ness 2010 was prepared by a team led by egy is managed by Nadine Ghannam. Contact details for local partners Sylvia Solf, Penelope Brook (through May The events and road show strategy is are available on the Doing 2009) and Neil Gregory (from June 2009) managed by Jamile Ramadan. All knowl- under the general direction of Michael edge management and outreach activi- Business website at http://www. Klein (through May 2009) and Penelope ties are under the direction and guidance doingbusiness.org Brook (from June 2009). The team com- of Suzanne Smith. prised Svetlana Bagaudinova, Karim O. We are grateful for valuable com- Belayachi, Mema Beye, Frederic Bustelo, ments provided by colleagues across the César Chaparro Yedro, Maya Choueiri, World Bank Group and for the guidance Santiago Croci Downes, Sarah Cuttaree, of World Bank Group Executive Direc- Marie Delion, Allen Dennis, Jacqueline tors. Oliver Hart and Andrei Shleifer den Otter, Alejandro Espinosa-Wang, provided academic advice on the proj- Kjartan Fjeldsted, Carolin Geginat, Ce- ect. The paying taxes project was con- mile Hacibeyoglu, Sabine Hertveldt, Nan ducted in collaboration with Pricewater- Jiang, Palarp Jumpasut, Dahlia Khalifa, houseCoopers, led by Robert Morris. Jean Michel Lobet, Oliver Lorenz, Val- Alison Strong copyedited the manu- erie Marechal, Andres Martinez, Alex- script. Gerry Quinn designed the report andra Mincu, Joanna Nasr, C. Njemanze, and the graphs, and Alexandra Quinn Dana Omran, Caroline Otonglo, Camille provided desktopping services. Ramos, Yara Salem, Pilar Salgado-Otónel, The report was made possible by Umar Shavurov, Jayashree Srinivasan, Su- the generous contributions of more than sanne Szymanski, Tea Trumbic, Marina 8,000 lawyers, accountants, judges, busi- Turlakova, Caroline van Coppenolle and nesspeople and public officials in 183 Lior Ziv. Sebastian Fitzgerald and Bryan economies. Global and regional con- Welsh assisted in the months prior to tributors are firms that have completed publication. multiple surveys in their various offices The following experts wrote the around the world. boxes in the chapters specified: Yara Quotations in this report are from Salem (Starting a business), Thomas Doing Business partners unless otherwise Moullier (Dealing with construction per- indicated. The names of those wishing to mits), Oscar Madeddu (Getting credit), be acknowledged individually are listed Richard Stern (Paying taxes), Allen Den- below. Contact details are posted on the nis (Trading across borders) and Mahesh Doing Business website at http://www. Uttamchandani (Closing a business). doingbusiness.org. The online service of the Doing Business database is managed by Ramin ACKNOWLEDGMENTS 71 A L G E R IA Michel Lecerf Lim Ming Huey DJ I B O U T I Ahmed Adel Kamel Alleance advisory Maroc PricewaterhouseCoopers Karim Adel Law Office Branka Achari-Djokic Rahma Abdi Abdillahi Banque d’Algérie Abdelmadjid Mahreche Sara Jawahery Banque Centrale de Hazem Ahmed Fathi Direction Generale des Elham Ali Hassan & Djibouti Hassouna & Abou Ali Mohamed Afir Douanes D’Algerie Associates Lefèvre Pelletier & Abdillahi Aidid Farah Rana Al Nahal associés Tahar Melakhessou Ebrahim Karolia Sarwat A. Shahid Law Firm Cabinet Notarial PricewaterhouseCoopers Wabat Daoud L. Aimene Melakhessou Yousef AlAmly Elie Kassis Jean Phillipe Delarue Abu-Ghazaleh Legal - Ministère de la Justice Société Maritime L. Savon Adnane Merad Agility Logistics (TAG-Legal) Mohamed Atbi Etude de Me Kaddour & Ries Etude notariale Mohamed Merad Mubeen Khadir Yasmin Al-Gharbawie Ernst & Young Luc Deruyer Shalakany Law Office, Atbi Société Maritime L. Savon Mohamed Mokrane member of Lex Mundi Khodja Bachir Ministère des Finances, Abdul-Haq Mohammed & Ries SNC Khodja & Co. Direction Generale du Trowers & Hamlins Abd El Wahab Aly Ibrahim Ali Dini Abd El Wahab Sons Domaine National Gautam R. Mundkur Hassan Djamel Belloula Electricité de Djibouti Cabinet Belloula Fares Ouzegdouh Mohamed Salahuddin Tim Armsby Béjaia Mediterranean Consulting Engineering Félix Emok N’Dolo Trowers & Hamlins Tayeb Belloula Terminal Bureau CHD Group Cabinet Belloula Amr Mohamed Mahmoud Ahmed Rahou Najma A. Redha Hasan Mourad Farah Atta Mohammed Tahar Benabid Ministère des Finances, Ministry of Municipalities Karim Adel Law Office Cabinet Mohammed Tahar & Agriculture Affairs. Ibrahim Hamadou Hassan Direction Generale du Banque Pour le Commerce Abdelhamid Attalla Benabid Domaine National Municipal One Stop Shop et LíIndustrie KPMG Samir Benslimane Dib Said Mohamed Salahuddin Cabinet Benslimane Mohamed Salahuddin Fatouma Mahamoud Hassan Khaled Balbaa Banque d’Algérie Cabinet Mahamoud KPMG Consulting Engineering Adnane Bouchaib Aloui Salima Bureau Bouchaib Law Firm Mayank Metha Louis Bishara Law Firm Goussanem & Maersk Sealand Line Bishara Textile & Garment Aloui Thamer Salahuddin Fatima-Zohra Bouchemla Mohamed Salahuddin Manufacturing Co Lefèvre Pelletier & Ibrahim Mohamed Omar SDV Logistics Ltd. Consulting Engineering Associés Cabinet CECA Karim Dabbous Marc Veuillot Bureau Sherif Dabbous, Auditors Mohamed Bourouina Oubah Mohamed Omar & Financial Consultancies, Alleance advisory Maroc Ali Sheikh Cabinet Bourouina Société Maritime L. Savon a member firm of Russell Al Sarraf & Al Ruwayeh & Ries BA H R A I N Bedford International Hamid Djamouh Esmond Hugh Stokes Cabinet Djamouh Jerome Passicos Sherif Dabbous Aysha Abdul Malik Hatim S. Zu’bi & Partners Société Maritime L. Savon Sherif Dabbous, Auditors Souhila Djamouh Chaib Elham Ali Hassan & Robin Watson & Ries & Financial Consultancies, Cabinet Djamouh Associates (EAH Law) The Benefit Company a member firm of Russell Lantosoa Hurfin Ralaiarinosy Asmaa El Ouazzani Khaled Hassan Ajaji Groupement Cosmezz Bedford International Adrian Woodcock Landwell & Associés - Ministry of Justice & Norton Rose Djibouti S.A. Sameh Dahroug PricewaterhouseCoopers Islamic Affairs Ibrachy & Dermarkar Law Legal Services Ivan Zoricic Aicha Youssouf Abdi Nawaf Bin Ebrahim Al Khalifa Cabinet CECA Firm Ernst & Young Malik Elkettas Electricity & Water Ibrahim Hassan Daker Elkettas International Authority Hatim S. Zu’bi E G Y P T, A R A B R E P. Karim Adel Law Office Seema Al- Thawadi Hatim S. Zu’bi & Partners Brahim Embouazza Abdel Aal Aly Said Diab MCDConsulting Ministry of Municipalities Sherif Dabbous, Auditors & Agriculture Affairs. C OM ORO S Afifi World Transport Mohamed Lehbib Goubi & Financial Consultancies, Municipal One Stop Shop Mohamed Abdallah Halifa Naguib Abadir a member firm of Russell Banque d’Algérie Nacita Corporation Al-Twaijri & Partners Law Groupe Hassanati Soilihi - Bedford International Salim Gourine Firm Groupe Hasoil Mohamed Abd El-Sadek Abdallah El Adly Cabinet Djamouh Abu-Ghazaleh Legal - Samer Al-Ajjawi Aboubakar Abdou PricewaterhouseCoopers Nicolas Granier Ernst & Young Conseiller Juridique de (TAG-Legal) Mahmoud El Gharabawy Alleance Advisory Maroc líIle Autonome de la Girgis Abd El-Shahid Haider Alnoaimi Grande Comore Nadoury & Nahas Law Mohamed El-Amine Haddad Mohamed Salahuddin Sarwat A. Shahid Law Firm Offices Avocat Consulting Engineering Harimia Ahmed Ali Sara Abdel Gabbar Mohamed El Gharably Bureau Cabinet Me Harimia Trowers & Hamlins Sakina Haddad Nadoury & Nahas Law Crédit Populaire d’Algerie Shaji Alukkal Hassani Assoumani Ibrahim Mustafa Ibrahim Offices Panalpina World C.V.P.-Biocom Abdel Khalek Mohamed EL Gindy Farid Hatou Transport Sar Dar Pneus Said Ali Said Athouman General Authority for Waad Trade & Maaria Ashraf Union of the Chamber of Investment GAFI Development Co. Goussanem Khaled Hatim S. Zu’bi & Partners Commerce Law Firm Goussanem & Ahmed Abdel Warith Mohamed Refaat El Houshy Aloui Mohammed Mirza A. Hussain Remy Grondin AAW Consulting Engineers The Egyptian Credit Bin Jaffer Vitogaz Comores Mohamed Abdelaal Bureau I-Score Ahmed Khedim Ministry of Municipalities Inspection de Ahamada Mahamoudou Ibrachy & Dermarkar Law Hassan El Maraashly & Agriculture Affairs. Firm l’enregistrement et du Municipal One Stop Shop AAW Consulting Engineers Mohamed Maoulida Timbre Ramez Mounir Abdel-Nour Michael Durgavich Audit et Conseil Amr El Monayer Arezki Khelout International Karim Adel Law Office Ministry of Finance Al Sarraf & Al Ruwayeh Ministère des Finances, Said Ibrahim Mourad Ahmed Abou Ali Mohamed El Sayed Direction Generale du Nicolas Galoppin Hassouna & Abou Ali Domaine National Al Sarraf & Al Ruwayeh Ibrahim A. Mzimba Nadoury & Nahas Law Offices Nadira Laissaoui Akram Hage Cabinet Mzimba Avocats Sameh Abu Zeid Capital Market Authority Hasan El Shafiey Ghellal & Mekerba Abu-Ghazaleh Legal - Daoud Saidali Toihiri (TAG-Legal) Nadoury & Nahas Law Nawel Lammari Ministry of Promotion and Nermin Abulata Offices Employment Ministry of Trade & Ministère de la Justice Abdulwahid A. Janahi Industry Karim Elhelaly The Benefit Company Youssouf Yahaya Karine Lasne Ghada Adel Al-Ahl Firm Landwell & Associés - Jawad Habib Jawad PricewaterhouseCoopers Ashraf Elibrachy PricewaterhouseCoopers BDO Jawad Habib Legal Services Ibrachy Law Firm 72 DOING BUSINESS IN THE ARAB WORLD 2010 Mohamed El-Labboudy South Cairo Electricity Omar Aljazy Amal Abdallah Bassam Darwich Nadoury & Nahas Law Distribution Company Aljazy & Co.Advocates & Al-Saleh & Partners P & G Levant Offices Randa Tharwat Legal Consultants Mahmoud Abdulfattah Michel Doueihy Rana El-Nahal Nacita Corporation Sabri S. Al-Khassib The Law Offices of Mishari Badri and Salim El Sarwat A. Shahid Law Firm Greiss Youssef Amman Chamer of Al-Ghazali Meouchi Law Firm, member Commerce of Interleges Mustafa Elshafei Afifi World Transport Waleed Abdulrahim Ibrachy Law Firm Micheal T. Dabit Abdullah Kh. Al-Ayoub & Electricité du Liban Eman Zakaria Michael T. Dabit & Associates, member of Lex Sherihan Elshal Ministry of Manpower & Associates Mundi Eddy El-Maghariki Abu-Ghazaleh Legal - Migration Attayyar Law Firm in (TAG-Legal) Anwar Elliyan Lina A.K. Adlouni association with Alem & Mona Zobaa Associates The Jordanian Electric Hassan Fahmy Ministry of Investment Power Co. Ltd. (JEPCO) Abdullah Al-Ayoub Ministry of Investment Abdullah Kh. Al-Ayoub & Chadia El Meouchi Mona Zulficar Greater Amman Associates, member of Lex Badri and Salim El Tarek Gadallah Shalakany Law Office, Municipality Mundi Meouchi Law Firm, member Ibrachy Law Firm member of Lex Mundi of Interleges Tariq Hammouri Mishari M. Al-Ghazali Tareq Gadallah I R AQ Hammouri & Partners The Law Offices of Mishari Tarek Farran Ibrachy Law Firm Al-Ghazali Farran Law Firm Hadeel Salih Abboud George Hazboun Ashraf Gamal El-Din Al-Janabi Al-Twaijri & Partners Law Dania George Egyptian Institute of Ra’ied Hiassat Firm (TLF) Mena Associates, PricewaterhouseCoopers Directors Land and Survey member of Amereller Directorate Firas Al-Saifi Samer Ghalayini Ahmed Gawish Rechtsanwälte Abu-Ghazaleh Legal - The Levant Lawyers Ministry of Transport Tayseer Ismail (TAG-Legal) Nisreen Abdul Hadi Al East Echo Co. Abdallah Hayek Karim Adel Kamel Ghobrial Hamirie Abdullah Bin Ali Hayek Group Karim Adel Law Office New Iraq for Legal Zeina Jaradat Packaging and Plastic Practice and Consultancy PricewaterhouseCoopers Industries Co. (KSC) Walid Honein Zeinab Saieed Gohar Badri and Salim El Central Bank of Egypt Salman Al Doushan Basel Karwa Paul Day Meouchi Law Firm, member Abu-Ghazaleh Legal - Kawar Transport and Al Sarraf & Al Ruwayeh of Interleges Maha Hassan (TAG-Legal) Transit- KARGO Afifi World Transport Nazih Abdul Hameed Maher Hoteit Mohammad Al Jabouri Enad Khirfan Al-Saleh & Partners The Levant Lawyers Omneia Helmy Abu-Ghazaleh Legal - Ali Sharif Zu’bi, Advocates Egyptian Center for (TAG-Legal) & Legal Consultants, Sunil Jose Chawkat Houalla Economic Studies member of Lex Mundi Abu-Ghazaleh Legal - Adib & Houalla Law Office Aziz Al Jaff (TAG-Legal) Lobna Mohamed Hilal New Iraq for Legal Rasha Laswi Dany Issa Central Bank of Egypt Practice and Consultancy Zalloum & Laswi Law Firm Mazen A. Khoursheed Moghaizel Law Firm, Packaging and Plastic member of Lex Mundi Mohamed Hussein Hadeel Al Janabi Husam Jamil Madanat Industries Co. (KSC) Abu-Ghazaleh Legal - Mena Associates, Land and Survey Marie-Anne Jabbour (TAG-Legal) member of Amereller Directorate Chirine Krayem Moujaes Badri and Salim El Rechtsanwälte The Law Offices of Mishari Meouchi Law Firm, member Ashraf Ihab Firas Malhas Al-Ghazali of Interleges Shalakany Law Office, Ahmad Al Jannabi International Business member of Lex Mundi Mena Associates, Legal Associates Dany Labaky Fady Jamaleddine member of Amereller The Law Offices of Mishari The Levant Lawyers Mohamed Kamel Amer Mofleh Al-Ghazali Rechtsanwälte Al Kamel Law Office International Business Elie Kachouh Farquad Al-Salman Legal Associates Medhat M. Mubarak ELC Transport Services Ghada Kaptan Al-Saleh & Partners F.H. Al-Salman & Co. SAL Shalakany Law Office, Amer Nabulsi member of Lex Mundi Mustafa Alshawi DLA Piper Anupama Nair Georges Kadige Iraq Center for Economic Abdullah Kh. Al-Ayoub & Kadige & Kadige Law Firm Mohanna Khaled Mustfa Nasserddin Associates, member of Lex Reform BDO, Khaled & Co Abu-Ghazaleh Legal - Mundi Michel Kadige Florian Amereller (TAG-Legal) Kadige & Kadige Law Firm Taha Khaled Amereller Rechtsanwälte L E BA N ON BDO, Khaled & Co Mutasem Nsair Najib Khattar Husam Addin Hatim Khalifeh & Partners Khattar Associates Sally Kotb Wadih Abou Nasr Nadoury & Nahas Law Gezairi Transport Iraqi Osama Y. Sabbagh PricewaterhouseCoopers Georges Mallat Offices Company Ltd. The Jordanian Electric Hyam G. Mallat Law Firm Power Co. Ltd. (JEPCO) Soha Al Masri Mustafa Makram Stephan Jäger Abu-Ghazaleh Legal - Nabil Mallat BDO, Khaled & Co Amereller Rechtsanwälte Mohammad Sawafeen (TAG-Legal) Hyam G. Mallat Law Firm Imad Makki Land and Survey Sherif Mansour Directorate Manal Assir Rachad Medawar PricewaterhouseCoopers Al Qarya Group Co. UNDP Obeid & Medawar Law Firm Mazen Shotar Diaa Mohamed Raed Raghib Maya Atieh Joseph Merhy Department of Lands and Abu-Ghazaleh Legal - New Iraq for Legal Survey Adib & Houalla Law Office Central Bank of Lebanon (TAG-Legal) Practice and Consultancy Stephan Stephan Antoine Baaklini Fadi Moghaizel Mostafa Mostafa Ahmed Salih Al-Janabi BAB International Moghaizel Law Firm, PricewaterhouseCoopers Al Kamel Law Office Mena Associates, member of Lex Mundi member of Amereller Abu Mariam Tarek Tarek Baz Ashraf Nadoury Rechtsanwälte Abu-Ghazaleh Legal - Hyam G. Mallat Law Firm Mario Mohanna Nadoury & Nahas Law (TAG-Legal) Patrimoine Conseil SARL Offices Katia Bou Assi JOR DA N Moghaizel Law Firm, Mirvat Mostafa Azzam Zalloum Ragia Omran Anas Abunameh Zalloum & Laswi Law Firm member of Lex Mundi The Levant Lawyers Shalakany Law Office, member of Lex Mundi Law & Arbitration Centre Kareem Zureikat Rita Bou Habib Rania Mrad Maha Al Abdallat Ali Sharif Zu’bi, Advocates Audit Department - VAT Khattar Associates Tarek Fouad Riad & Legal Consultants, Directorate Kosheri, Rashed & Riad Central Bank of Jordan Toufic Nehme member of Lex Mundi Najib Choucair Eman M. Al-Dabbas Law Office of Albert Mohamed Serry Central Bank of Lebanon Laham Serry Law Office International Business K U WA I T Legal Associates Sanaa Daakour Mireille Richa Safwat Sobhy Arafat Alfayoumi Labeed Abdal The Levant Lawyers Tyan & Zgheib Law Firm PricewaterhouseCoopers The Law Firm of Labeed Central Bank of Jordan Abdal ACKNOWLEDGMENTS 73 Jihane Rizk Khattar Myriam Emmanuelle Bennani OM A N Mansoor Jamal Malik S AU DI A R A B IA Khattar Associates Amin Hajji & Associés Al Busaidy, Mansoor Jamal Association d’Avocats Jehanzeb Afridi & Co. Emad Fareed Abdul Jawad Jihad Rizkallah Al Busaidy, Mansoor Jamal Globe Marine Services Co. Badri and Salim El Richard Cantin & Co. Kapil Mehta Meouchi Law Firm, member Juristructures - Project Maersk Line Ali Abedi of Interleges Management & Legal Syed Nasir Ahmed The Allaince of Abbas Advisory Services LLP Maersk Line Subha Mohan F. Ghazzawi & Co. and Rached Sarkis Curtis Mallet - Prevost, Hammad, Al-Mehdar & Co. Rached Sarkis Office Zineb Chigar Hamad Al Abri Colt & Mosle LLP Cabinet Notarial Houcine Muscat Electricity Asad Abedi Camille C. Sifri Sefrioui Distribution Company Natarajan Narayana Swami The Allaince of Abbas PricewaterhouseCoopers Poly Products L.L.C F. Ghazzawi & Co. and Fatima Zohra Gouttaya Zubaida Fakir Mohamed Al Hammad, Al-Mehdar & Co. Nady Tyan Cabinet Notarial Houcine Balushi Bruce Palmer Tyan & Zgheib Law Firm Sefrioui Central Bank of Oman Curtis Mallet - Prevost, Danya Abulola Colt & Mosle LLP Bafakih & Nassief Patricia Yammine Amin Hajji Fahmy Al Hinai PricewaterhouseCoopers Amin Hajji & Associés Poly Products L.L.C Dali Rahmattala Habboub Anas Akel Association d’Avocats Denton Wilde Sapte Bafakih & Nassief Rania Yazbeck Salem Ben Nasser Al Ismaily Tyan & Zgheib Law Firm Zohra Hasnaoui The Omani Center for Antonia Robinson Naïm Al Chami Hasnaoui Law Firm Investment Promotion Denton Wilde Sapte Abu-Ghazaleh Legal - M AU R I TA N IA & Export Development Muntasir Said Al Sawafi (TAG-Legal) Bahya Ibn Khaldoun (OCIPED) Ishagh Ahmed Miske Université Mohamed V Maersk Line Sheikh Yousef Al Farraj Cabinet Ishagh Miske Mauwiya Ali Suleiman Mark Schmidt Ministry of Justice Naoual Jellouli Al Busaidy, Mansoor Jamal Tidiane Bal Ministère de l’économie et Denton Wilde Sapte Omar Al Saab & Co. BSD & Associés des finances Charles Schofield Law Office of Mohanned Mohammed Alshahri Trowers & Hamlins Bin Saud Al-Rasheed in Youssoupha Diallo Mehdi Kettani Mohammed Aishahri & association with Baker BSD & Associés Kettani Law Office Associates Paul Sheridan Botts LLP Fatoumata Diarra Nadia Kettani Hamad M. Al-Sharji Denton Wilde Sapte Abdullah Fawaz Al Tamimi BSD & Associés Kettani Law Firm Hamad Al-Sharji, Peter Balaji Srinivasan Al Tamimi & Company Mohamed Lemine Bouchraya Bouchaib Labkiri Mansour & Co. Towell Al Zawra Advocates & Legal Lam Globex Maritime Co. Engineering Services Consultants Pradhnesh Bhonsale BSD & Associés Company Karine Lasne Maersk Line Mashuor M. Al Tubaishi Wedou Mohamed Landwell & Associés - Paul Suddaby Riyadh Municipality Mehdi Bin Ali Bin Juma Maurihandling PricewaterhouseCoopers PricewaterhouseCoopers The Omani Center for Nasser H. AlAamry Legal Services Investment Promotion Ahsan Syed Anwar National Water Company Mine Ould Abdoullah Wilfried Le Bihan & Export Development Poly Products L.L.C Brahim Ould Daddah (OCIPED) Ibrahim Mohamed Al-But’hie CMS Bureau Francis Naji Taha Riyadh Municipality Cabinet Daddah Conseils Lefebvre Archie Campbell Abu-Ghazaleh Legal - Fayez Aldebs Brahim Ould Ebetty Lapirama Group Denton Wilde Sapte (TAG-Legal) Al Juraid & Company / Aliou Sall International Mehreen B. Elahi The Lighthouse PricewaterhouseCoopers Assurim Consulting Lydec Al Busaidy, Mansoor Jamal & Co. Jeff Todd Ali. R. Al-Edrees Ndeye Khar Sarr Anis Mahfoud PricewaterhouseCoopers Al-Bassam BSD & Associés Abouakil & Benjelloun Candida Fernandez Al Busaidy, Mansoor Jamal Simon Ward Mohammed Al-Ghamdi Avocats - AB Avocats Dominique Taty & Co. Al Busaidy, Mansoor Jamal Fulbright & Jaworski LLP FIDAFRICA / Mohamed Maliki & Co. PricewaterhouseCoopers Zareen George Abdullah Al-Hashim Etude Maitre Maliki Al Busaidy, Mansoor Jamal Norman Williams Al-Jadaan & Partners Law M ORO C C O Del Monsieur Marc & Co. Majan Engineering Firm Landwell & Associés - Consultants Alessandro Gugolz Hussam Salah Al-Hejailan Benali Abdelmajid PricewaterhouseCoopers Legal Services Said Al Shahry Law Office Sarah Wright The Law Firm of Salah Exp Services Denton Wilde Sapte Al-Hejailany Aziz Abouelouafa Azdine Nekmouche Justine Harding Denton Wilde Sapte Hesham Al-Homoud Globex Maritime Co. Ordre des architectes de QATA R The Law Firm of Dr. Casablanca Najat Aboulfadl Sarah Hestad Naveed Abdulla Hesham Al-Homoud Cabinet Notarial Houcine Hicham Oughza Curtis Mallet - Prevost, Gulf Star Group Colt & Mosle LLP Mohammed Al-Jaddan Sefrioui Dar Alkhibra Abdelmoniem Abutiffa Al-Jadaan & Partners Law Agence Med s.a.r.l. Réda Oulamine Hussein Qatar International Law Firm Oulamine Law Group Muscat Electricity Firm Samir Agoumi Distribution Company Fahad Almalki Dar Alkhibra Jamal Rahal A. Rahman Mohamed Al Tamimi & Company Exp Services Diana Jarrar Al-Jufairi Advocates & Legal My Hicham Alaoui Abu-Ghazaleh Legal - Consultants Globex Maritime Co. Hassane Rahmoun (TAG-Legal) Khalil Al-Mulla Etude Notariale Hassane Customs and Ports Nabil Abdullah Al-Mubarak Meredith Allen-Belghiti Rahmoun Saqib Jillani General Authority Saudi Credit Bureau - Kettani Law Firm Al Busaidy, Mansoor Jamal SIMAH Nesrine Roudane & Co. Ian Clay Younes Anibar Nero Boutique Law Firm PricewaterhouseCoopers Fayez Al-Nemer Cabinet Younes Anibar Sunil Joseph Talal Bin Naif Al-Harbi Morgane Saint-Jalmes Maersk Line Richard Dib Law Firm Bank Al-Maghrib Kettani Law Firm Abu-Ghazaleh Legal - Jotun Paints LLC (TAG-Legal) Saad Al-Owain Khaled Battash Aurelie Santos Unified registry- Ministry Abu-Ghazaleh Legal - Landwell & Associés - Mehdi Ali Juma Daoud Adel Issa of Commerece & Industry (TAG-Legal) PricewaterhouseCoopers Gulf Agency Company LLC Qatar Petroleum Legal Services Mohammed Al-Soaib Maria Belafia Ziad Khattab Sajid Khan Al-Soaib Law Firm Cabinet Notarial Belafia Houcine Sefrioui Abu-Ghazaleh Legal - PricewaterhouseCoopers Cabinet Notarial Houcine (TAG-Legal) Wicki Andersen Linda Oumama Benali Sefrioui P.E. Lalachen MJ Abdul Muttalib Baker Botts LLP Aicha Benghanem Gulf Star Group Khimji Ramdas Abdul Moeen Arnous Cabinet Notarial Houcine Sefrioui Pushpa Malani Terence G.C. Witzmann Law Office of Hassan HSBC Mahassni PricewaterhouseCoopers 74 DOING BUSINESS IN THE ARAB WORLD 2010 Joseph Castelluccio Mohammad Arif Saeed Alaa Eldin Mohamed Osman Hend Ben Achour Noureddine Ferchiou Fulbright & Jaworski LLP Al Tamimi & Company Darka for Trading & Adly Bellagha & Ferchiou & Associés Advocates & Legal Services Co. Ltd. Associates Meziou Knani Salah Deeb Consultants Al Tamimi & Company R. Parekh Rafika Ben Aissa Bouslama Lamia Harguem Advocates & Legal Mustafa Saleh MTS Cargo Services Ministère de la Justice Gide Loyrette Nouel, Consultants Emad Arriyadh Trading member of Lex Mundi Mohamed Samir Othman Ben Arfa Nicholas Diacos Abdul Shakoor Tristar Société Tunisienne de Badis Jedidi Al Tamimi & Company Globe Marine Services Co. l�Elecricite et du Gaz Gide Loyrette Nouel, Advocates & Legal Amel M. Sharif member of Lex Mundi Consultants Rehana Shukkur Mahmoud Elsheikh Omer & Ismail Ben Farhat The Allaince of Abbas Associates Advocates Adly Bellagha & Najla Jezi Mothanna El Gasseer F. Ghazzawi & Co. and Associates ACR Al Tamimi & Company Hammad, Al-Mehdar & Co. Abdel Gadir Warsama Advocates & Legal Dr. Abdel Gadir Warsama Elyès Ben Mansour Amina Larbi Consultants Peter Stansfield Ghalib & Associates Legal Avocats Conseils Associés Gide Loyrette Nouel, Al-Jadaan & Partners Law Firm member of Lex Mundi Adel El Said Firm Miriam Ben Rejeb Panalpina World SY R IA N A R A B PricewaterhouseCoopers Mouelhi Lotfi Transport Sameh M. Toban Legal Services Maersk Logistics Toban Law Firm REPUBLIC Nasser A. Elhaidib Anis Ben Said Mabrouk Maalaoui Juergen Villmer Muhamed Agha Global Auditing & PricewaterhouseCoopers Riyadh Municipality Al-Soaib Law Firm UNDP Advising Mahmoud Yahya Fallatah Khaled Marzouk Michael Webb Sulafah Akili Kamel Ben Salah République Tunisienne National Water Company National Water Company Ministry of Economy & Gide Loyrette Nouel, Centre Informatique du Imad El-Dine Ghazi Trade member of Lex Mundi Ministere des Finances Law Office of Hassan Natasha Zahid Baker Botts LLP Mouazza Al Ashhab Salah Ben Youssef Mohamed Ali Masmoudi Mahassni Auditing Consulting République Tunisienne PricewaterhouseCoopers Andreas Haberbeck Abdul Aziz Zaibag Accounting Center Centre Informatique du Legal Services The Allaince of Abbas Alzaibag Consultants Ministere des Finances Rawaa Al Midani Sarah Mebezaa F. Ghazzawi & Co. and Soudki Zawaydeh Hammad, Al-Mehdar & Co. Ministry of Trade & Abdelfattah Benahji Comete Engineering Al Juraid & Company / Economy Ferchiou & Associés Alan Hall PricewaterhouseCoopers Meziou Knani Radhi Meddeb Nabih Alhafez Comete Engineering Al Tamimi & Company Advocates & Legal SU DA N SFS (Speed Forward Peter Bismuth Shipping) Tunisie Electro Technique Faouzi Mili Consultants Mili and Associates Abdullah Abozaid Ziad Al-Sairafi Shadi Haroon Manel Bondi Law Office of Abdullah A. Abu-Ghazaleh Legal - Ben Afia Mohamed Salah Law Office of Mohanned Abozaid PricewaterhouseCoopers (TAG-Legal) Orga Audit, a member Bin Saud Al-Rasheed in Mustafa Bouafif firm of Russell Bedford association with Baker Mohamed Ibrahim Adam Abdul Raouf Hamwi Dr. Adam & Associates Ministry of State Property International Botts LLP Civil Engineering Office and Land Affairs Jamal Ibrahim Ahmed Mohamed Taieb Mrabet Jochen Hundt Yaser Hmedan Institut d’Economie Banque Centrale de Al-Soaib Law Firm Eihab Babiker Yaser Hmedan Law Office Quantitative Tunisie Ziad Jibril Eihab Babiker & Associates Antoun Joubran Elyes Chafter - Advocates Atf Nasri Abu-Ghazaleh Legal - Syrian Arab Consultants Chafter Raouadi & Ferchiou & Associés (TAG-Legal) Mojtaba Banaga Law Office Associés Meziou Knani Marcus Latta Elkarib and Medani Mazen N. Khaddour Zine el abidine Chafter Imen Nouira The Law Firm of Salah Elmugtaba Bannaga International Legal Chafter Raouadi & Conservation Foncière Al-Hejailany Elkarib and Medani Bureau Associés Tunisia Glenn Lovell Amani Ejami Auditing Consulting Faouzi Cheikh Habiba Raouadi Al Tamimi & Company El Karib & Medani Accounting Center Banque Centrale de Chafter Raouadi & Advocates & Legal Advocates Tunisie Associés Consultants Gabriel Oussi Ashraf A.H. El Neil Syrian Arab Consultants Abdelmalek Dahmani Lotfi Rebai Zaid Mahayni Law Office Dahmani Transit Mahmoud Elsheikh Omer & Cabinet Rebai Law Office of Hassan Associates Advocates International Mahassni Yazan Quandour Sakoudi Ridha Tariq Mohmoud Elsheikh Abu-Ghazaleh Legal - Mohamed Lotfi El Ajeri A. T. I. S. Ahmed Makkaw Omer (TAG-Legal) Avocat a la Cour et Bafakih & Nassief Mahmoud Elsheikh Omer & mediateur agree par le Imed Tanazefti Housam Safadi Gide Loyrette Nouel, Ahmed Mekkawi Associates Advocates B.B.MC Safadi Bureau member of Lex Mundi Bafakih & Nassief Eshraga Fadlalla Mourad El Aroui Samer Sultan Faiza Telissi Maher Melhem Eshraga Fadlalla Law Amen Bank Sultans Law Adly Bellagha & Abu-Ghazaleh Legal - Office Yassine El Hafi Associates (TAG-Legal) William E. Kosar T U N I SIA Adly Bellagha & IRIS Center Associates Rachid Tmar Muntasir Osman Rachid Aguirr PricewaterhouseCoopers Law Office of Hassan Ahmed Mahdi Faïza Feki Legal Services Mahassni Ben Said et Associés Mahmoud Elsheikh Omer & Banque Centrale de Associates Advocates Mokhtar Amor Tunisie Wassim Turki K. Joseph Rajan Société Tunisienne de AWT Audit & Conseil Globe Marine Services Co. Amin Mekki Medani Ali Fekih l’Electricité et du Gaz Anis Wahabi Prabagaran Ramasamy El Karib & Medani Chafter Raouadi & Advocates Mohamed Moncef Barouni Associés AWT Audit & Conseil Panalpina World Transport ACR Osman Mekki Abdurrahman Abderrahmen Fendri UNITED ARAB Murtaza Rao HLCS Belgacem Barrah PricewaterhouseCoopers E M I R AT E S Al-Wallan Logistics Tribunal de 1ère Instance Abdalla Mohamed de Tunis Yessine Ferah CE&P Law Firm Karim Abaza SAMTCO A. Mohamed & Associates Anis Bejaoui Shalakany Law Office, Saudi Credit Bureau - Tarig Monim Chafter Raouadi & Amel Ferchichi member of Lex Mundi SIMAH Associés Gide Loyrette Nouel, Mohamed Alaa Eldin member of Lex Mundi Rami Abdellatif Mohamed Adly Bellagha Abu-Ghazaleh Legal - Darka for Trading & Adly Bellagha & (TAG-Legal) Services Co. Ltd. Associates ACKNOWLEDGMENTS 75 Dawoud Abdel Rahman James Bowden Omar Momany Ali Faroun Sanjay Prajapapi Al-Hajri Afridi & Angell, member of Freshfields Bruckhause Palestinian Monetary Ratco for Trading & Dubai Municipality Lex Mundi Deringer Authority Services Qurashi AlSheikh R Chandran Yasser Omar Nader Hamadneh Zuhair Abdul Rasheed AbdulGhani Sea Bridge Shipping Shalakany Law Office, Netham, DPK Consulting, a Law Offices of Sheikh Dubai Municipality member of Lex Mundi Division of ARD Tariq Abdullah Dalmook Dalmook Moutaz Abdullah Dalmook Mohd. Dalmook Vijendra Vikram Singh Paul Ali Hamoudeh Aref Al Selwi Rufaid Abu-Ghazaleh Legal - Attorney and Legal Abu-Ghazaleh Legal - Jerusalem District Five Star Logistics Co Ltd (TAG-Legal) Consultants (TAG-Legal) Electricity Co. Ltd. Khaled Mohammed Salem Ali Ahmad Subhu Ahmad Mohammad A. El-Ghul Prakash Samir Huleileh Yemen Legal Advocates & Herbert Smith LLP Habib Al Mulla & Co. Al Tajir Glass PADICO Legal Consultants Mariam S.A. Al Afridi Anthea Fernandes Samer Qudah Hiba Husseini Henry Musonda Dubai World Shalakany Law Office, Al Tamimi & Company Husseini & Husseini Kiran & Musonda member of Lex Mundi Advocates & Legal Associates Basil T. Al Kilani Consultants Nabil Isifan Dubai World Laetitia Fernandez Netham, DPK Consulting, a Teddie Mwale Helene Mathieu Legal Dean Rolfe Division of ARD ZESCO Ltd Rasha Al Saeed Consultants PricewaterhouseCoopers Baker Botts LLP Mohamed Khader Francis Mwape Nazia Hameed Shoeb Saher Lausanne Trading National Council for Marwan Al Sharkah Afridi & Angell, member of Habib Al Mulla & Co. Consultants Construction Galadari and Associates Lex Mundi Luke Sajan Muhammad Nassar Stone Robby Ngalashi Essam Al Tamimi Samer Hamzeh Damco Lumwana Mining Company Al Tamimi & Company Wael Saadi Trowers & Hamlins Advocates & Legal Khalid Mohamed Saleh PricewaterhouseCoopers Kanti Patel Consultants Omar Hegazy Dubai Municipality Andrea Sahlieh Christopher, Russell Cook Shalakany Law Office, & Co. Shouqi Al Yousuf member of Lex Mundi Moahmmed Ahmed Saleh Catholic Relief Services Dubai Electricity and Dubai Municipality Husein Sholi Solly Patel Water Authority Sydene Helwick Christopher, Russell Cook Al Tamimi & Company Herbert Schroder Netham, DPK Consulting, a & Co. Mahmood Albastaki Advocates & Legal Emcredit Division of ARD Dubai World Consultants Maysa Sirhan Mabvuto Sakala Ruth Sharry Corpus Globe Advocates Saeed Al-Hamiz Fadi Hourani PricewaterhouseCoopers Palestinian Monetary Central Bank of the UAE Hourani & Associates Authority Valerie Sesia Douglas Smith Customized Clearing And Maryam Ahmed Al-Hammadi Habib Al Mulla & Co. Samer Tammam Sameer Huda Forwarding Ltd. Dubai Municipality Hadef & Partners Tammam Trade Khalid A. Wahab Kim Shelsby Ashraf Ali Al Midfa & Associates Kosty Ziadeh Narmin Issa Zambia Threshold Project Golden Building Materials DLA Piper Middle East LLP Ziadeh Law Office Trading Stan Wright Nelson Williams Dubai Customs Maurice Ziadeh Samir Ja’afar Swift Freight Sagar Ali Ja’afar Alwan Al Jaziri & Ziadeh Law Office International Business Advisors Group Rania Yousseph Associates Habib Al Mulla & Co. Y E M E N , R E P. Anderson Zikonda Hadif Alowais Talib Abdul-Kareem Julfar High Court Judge Alowais & Manfield Natasha Zahid Dubai Municipality Baker Botts LLP Tariq Abdullah Lawyers Law Offices of Sheikh Zaid Kamhawi Tariq Abdullah Moustapha Al-Sharkawi Emcredit W E ST BA N K A N D Dubai Courts GAZA Khaled Al Buraihi Mohammad Z. Kawasmi Khaled Al Buraihi for Blaise Amikat Al Tamimi & Company Trium Logistics LLC Hani Abdel Jaldeh Advocacy & Legal Services Advocates & Legal Jerusalem District Wicki Andersen Consultants Electricity Company Yaser Al-Adimi Baker Botts LLP (JDECo) Abdul Gabar A. Al-Adimi Vipul Kothari for Construction & Trade Lisa W Anderson Kothari Auditors & Riyad Mustafa Abu Shehadeh PricewaterhouseCoopers Accountants Palestinian Monetary Rashad Khalid Al-Howiadi Authority Central Bank of Yemen Rasha Arayqat K Senthil Kumar Dubai Electricity and G.L.G Shipping & Logistics Ata Al Biary Abdalla Al-Meqbeli Water Authority Jerusalem District Abdalla Al-Meqbeli & Ravi Kumar Associates Dubai Trade Electricity Company Nakul Asthana (JDECo) Ismail Ahmed Alwazir Afridi & Angell, member of Suneer Kumar Lex Mundi Ma’ali Al Shawish Alwazir Consultants, Al Suwaidi & Co. Advocates & Legal Netham, DPK Consulting, a Ali Awais Nathan Landis Division of ARD Research Baker Botts LLP DLA Piper Middle East LLP Arshad Ali Bajwa Haytham L. Al-Zu’bi T Sureh Babu Jacqueline Latham Al-Zu’bi Law Office, Five Star Logistics Co Ltd Landmark group DLA Piper Middle East LLP Advocates & Legal Randall Cameron Gitanjali Baja Consultants KPMG Charles S. Laubach DLA Piper Middle East LLP Afridi & Angell, member of Mohammed Amarneh Fadel Mohamed Karhash Akhila Basith Lex Mundi The Democracy and Public Electricity Workers Rights Center Corporation Afridi & Angell, member of Valeria Lysenko Lex Mundi Moyad Amouri Moh’d Ali Lajam Mohamed Mahmoud PricewaterhouseCoopers Prakash Bhanushali Mashroom Middle East Shipping Co. Al Sahm Al Saree Dubai Municipality Khalil Ansara Ltd. Transport & Clearing Catholic Relief Services Abdulla Farouk Luqman Gagan Malhotra Hiten Bhatia Dubai Trade Maha Assali Yemen Legal Advocates & Silver Line Shipping PricewaterhouseCoopers Legal Consultants Helene Mathieu Jennifer Bibbings Helene Mathieu Legal Susan Coleman Nowar M. Mejanni Trowers & Hamlins Consultants Netham, DPK Consulting, a KPMG Division of ARD