Investment Climate in Practice

19 items available

Permanent URI for this collection

http://hdl.handle.net/10986/9416

This note series is published by the Investment Climate Department of the World Bank Group. It discusses practical considerations and approaches for implementing reforms that aim to improve the business environment.

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Promoting Foreign Investment in Fragile and Conflict-Affected Situations

(World Bank Group, Washington, DC, 2014-04) Whyte, Robert ; Griffin, Carlos

Fragile and conflict-affected situations might appear incapable of attracting significant flows of foreign investment due to their often negative international images and weak enabling environments. However, during the last eight years, foreign investment into these economies has grown almost three times more quickly than flows into the rest of the world, albeit from a very low starting point. Untapped natural resources, reconstruction needs, and severely underserved consumer demand present domestic and foreign investors with significant opportunities, many of which continue to go unrealized. This note provides guidance to investment policymakers and promoters in fragile and conflict-affected situations, whose work is needed to bring those opportunities to fruition.
Does E-Filing Reduce Tax Compliance Costs in Developing Countries?

(World Bank Group, Washington, DC, 2014-02) Coolidge, Jacqueline ; Yilmaz, Fatih

As the use of e-fi ling of tax returns has spread from developed to developingcountries, it has been clear that this sort of reform can reduce errors and opportunities for corruption. Also, it has been widely assumed that taxpayercompliance costs would decrease with the use of e-fi ling, because less time isspent getting tax returns from the taxpayer to the revenue authority. This notesummarizes findings from tax compliance cost surveys and offers a cautiouslypositive assessment of e-fi ling reforms in developing countries with a numberof caveats. Countries should not rush to push e-fi ling on all taxpayers untilthe revenue authorities, infrastructure, and taxpayers are ready.
Political Risk : The Missing Link in Understanding Investment Climate Reform?

(World Bank, Washington, DC, 2012-03) Dreyhaupt, Stephan ; Nimac, Ivan ; Hornberger, Kusi

Political risk has once again become a key concern of investors after the perceived openness and liberalization of foreign direct investment (FDI) regimes in the 1990s. Governments that do not recognize this trend pay a high price in lost investments. Confronting political and regulatory risks as part of the investment climate is thus crucial for countries to make their business environments more competitive. This note suggests reforms that can have immediate impacts: addressing ex ante and ex post issues in the legal and regulatory framework to protect investors, mitigating risks at the sector level, managing reputational and integrity risks at the project level, and using financial instruments to ease short-term impediments in the investment climate.
Leveraging Technology to Support Business Registration Reform: Insights from Recent Country Experience

(World Bank, Washington, DC, 2011-07) Wille, John R. ; Belayachi, Karim O. ; de Magalhaes, Numa ; Meunier, Frederic

Governments are revamping their processes for business registration, which can help improve the competitiveness of their investment climates and drive growth in formally registered firms. Company registrars are deploying Information and Communications Technology (ICT) applications to reduce the time and effort required for new businesses to register, improve regulatory oversight by government, and facilitate access to company information. A recent survey conducted by the doing business and investment climate teams of the World Bank Group examines the experience of 34 company registrars in implementing new or upgraded technology solutions. This note discusses the survey's key findings, identifies several factors influencing the registrars' approaches, and summarizes key lessons in choosing and implementing ICT solutions.
Using Strategic Communications to Engage Stakeholders in Tax Reform

(World Bank, Washington, DC, 2010-12) Rahman, Shaela

Strategic communications is used to build support and local ownership for reform initiatives while diffusing stakeholder opposition. It addresses the critical 'people' side of the reform process by fostering dialogue between stakeholders, changing perceptions, and strengthening the capacity of government to assist taxpayers. This note outlines an approach tested in tax reform projects in the Republic of Yemen and Sierra Leone, where strategic communications has been used to identify, and then systematically inform and engage relevant stakeholders a process that has proved essential to reform implementation and acceptance. This note also highlights the experience of the Lao People's Democratic Republic, where a multimedia informational campaign preceded the introduction of the value-added tax (VAT), influencing public opinion and paving the way for the reform.
Taxing Tourism in Developing Countries : Principles for Improving the Investment Climate Through Simple, Fair, and Transparent Taxation

(World Bank, Washington, DC, 2010-06) Corthay, Laurent ; Loeprick, Jan

A good investment climate for tourism, underpinned by a sound tax regime, can play a central role in a government's growth and development strategy. Yet in many countries, tax systems for the tourism sector are characterized by exemption schemes and instruments that generate little revenue and burden business. This note focuses on the three main issues facing policymakers dealing with tourism taxation in developing countries: fiscal incentives, sector-specific levies, and value-added tax (VAT). It discusses different policy options to encourage tourism investments while ensuring sustainable revenue collection. A good business environment for tourism is essential to support the industry's central role in many countries' development strategies. Investments in the sector, which has significant growth potential among developing countries, can have important positive spillovers on poverty reduction. Tourism is a complex industry of numerous subsectors. It is challenging to define exactly what constitutes a tourism product and how to tax it; tourism is not a single commodity, but rather a collection of many different goods and services provided by a wide range of suppliers. The tourism value chain encompasses a variety of different actors, including hotels, air carriers and transport companies, tour operators, travel agents, rental agencies, and countless suppliers from other sectors.
Using Taxation to Enable a Fair and Thriving Mining Industry

(World Bank, Washington, DC, 2010-06) Tadros, Farid ; Svensson, Kristina

Tax policy is an important tool for attracting investment and spurring growth in mining a valuable industry. This note examines the implications of tax policy from the perspectives of governments and investors, analyzing royalties, windfall taxes, depreciation allowances, loss carry-forward provisions, and tax administration.
Ghana Leads West Africa in Transit Reform

(World Bank, Washington, DC, 2010-04) Wulf, Luc De

Cumbersome transit and customs procedures hinder trade and economic development. Ghana has modified several features of its transit system as part of efforts to improve road-based trade in West Africa. Since 2006 the country's transit reforms have cut the time to process and transport goods crossing the country from five to three days, significantly lowering transport costs. Applying lessons from Ghana could catalyze broader transit reforms in West Africa and other developing regions.
Developing a Single Window to Facilitate Trade in Senegal

(World Bank, Washington, DC, 2010-04) Diagne, Ibrahima

In 1995 a reform group headed by Senegal's Ministry of trade introduced a single window system for electronic trade facilitation as part of a reform agenda to improve the country's business environment. Launched in 2004, the system transformed customs clearance, streamlining the process through transparent, electronic transactions initiated by a single request from the importer or exporter. Traders could collect and process the necessary documents and authorizations prior to customs declaration in about half a day rather than the four days required before the system was implemented. With its real-time data, government agencies could better monitor and control transactions, contributing to more secure transactions and revenues. This note highlights key issues in Senegal's decision to develop a customized system and offers lessons for governments in managing diverse stakeholder requirements and expectations.
Managing Risk in Customs : Lessons from the New Zealand Customs Service

(World Bank, Washington, DC, 2010-04) Foley, Rebecca ; Northway, Bruce

The New Zealand Customs Service's risk management system enables it to manage large volumes of cargo crossing borders with limited resources. The system encompasses a culture of problem-solving and accountability for decisions, a standard methodology for identifying and assessing risk, and an intelligence function that applies this methodology. This note highlights the fundamental principles and processes guiding the system, offering lessons for governments reforming their trade logistics functions to meet global standards and security requirements.