Romania’s rank in Doing Business 2011,a report which analyzes regulations that apply to an economy’s businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and closing a business is 56, one place down compared to 2010, when the country was ranked 55. Romania implemented substantial amendments to its bankruptcy laws, introducing, among other things, a procedure for out-of-court workouts, that made dealing with insolvency easier. It amended regulation relating to construction permitting to reduce fees and the time required. Romania also introduced tax changes, including a new minimum tax on profit that raised taxes for many companies. The most prominent areas of business regulation reform in Romania were closing a business, dealing with construction permits, and paying taxes (making it more difficult).
Among the world’s economies, Kazakhstan improved business regulation the most in the past year, according to Doing Business 2011: Making a Difference for Entrepreneurs, the eighth in a series of annual reports published by IFC and the World Bank.
Kazakhstan improved conditions for starting a business, obtaining construction permits, protecting investors, and trading across borders. As a result, it moved up 15 places in the rankings on the ease of doing business—to 59 among 183 economies. Tajikistan and Hungary, also among the 10 most-improved economies, climbed 10 places and six places respectively. The Czech Republic moved up 19 places, to 63.
In the past five years about 85 percent of the world’s economies have made it easier for local entrepreneurs to operate, through 1,511 improvements to business regulation. Doing Business 2011 pioneers a new measure showing how much business regulation has changed in 174 economies since 2005. By this measure, Georgia has been the most active worldwide in reforming business regulation.
For eight consecutive years, Eastern Europe and Central Asia has been the most active region in improving business regulation for domestic firms. In the past many changes were driven by the prospect of joining the European Union. More recently, the financial crisis has triggered new activity. This past year 21 of 25 economies improved business regulation for local firms.
“The economies most affected by the financial crisis—especially in Eastern Europe—have been targeting regulatory reforms over the past year to make it easier for small and medium-size enterprises to recover and to create jobs,” said Svetlana Bagaudinova, an author of the report. Half the reforms to insolvency procedures captured by the report in the past year took place in Eastern Europe and Central Asia. Measures making it easier to start up, to reorganize, and to pay taxes were also common.