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Rediff.com  » Business » Doing business? India lags behind Pakistan!

Doing business? India lags behind Pakistan!

Last updated on: November 9, 2010 15:18 IST

Doing business? India lags behind Pakistan!

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The Indian economy may be booming but when it comes to ease of doing business, it ranks way down at 134th position among 183 countries.

India lags behind even Pakistan with only Bhutan and Afghanistan ranked lower among the Asian nations according to the Doing Business 2011 report released by the World Bank and International Finance Corporation.

In India, the cost to start a business at 56.5 per cent of the income per capita and minimum capital required to start a business at 188.8 per cent of income per capita is the highest among South Asian countries.

India also ranks 29th in the time required to start business on a global scale while being fifth in this category among eight South Asian countries.

However, India is among the top 40 nations to have carried out the highest number of business regulation reforms in the last five years, most of these related to introduction of technology to ease business operations.

A high ranking on the ease of doing business index means the regulatory environment is more conducive to the starting and operation of a local firm.

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Image: India lags behind in doing biz.

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Pakistan (Rank 83)

Pakistan scores the highest among South Asian nations in terms of doing business.

In terms of business reforms, Pakistan made registering property more expensive by doubling the capital value tax to 4 per cent.

It has reduced the time to export by improving electronic communication between the Karachi Port authorities and the private terminals.

Starting a business was simplified by introducing a system that allows online registration for sales tax and removing the requirement to make a declaration of compliance on a stamped paper.

It is ranked at 85th in terms of doing business, 38th in protecting investors and 67th in closing a business.

The country lags behind in registering property, paying taxes and enforcing contracts. It takes 21 days to start a business in Pakistan.

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Image: Women at work in Faisalabad.

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China (Rank 79)

China's new corporate income tax law has unified the tax regimes for domestic and foreign enterprises and clarified the calculation of taxable income for corporate income tax purposes.

Trade credit restrictions were relaxed in response to the economic and financial crisis. Foreign exchange authorisation is no longer required.

Getting credit was made easier by expanding the range of assets that can be used as collateral through a new property law in October 2007.

The tax burden was reduced on businesses by reducing the corporate income tax rate from 33.3 per cent to 25 per cent and unifying the criteria and accounting methods for tax deductions.

The rules on enforcement of judgments were tightened.

It however, scores a dismal 151 in terms of doing business, 38 in registering property, 65th in getting credit and 68th in terms of closing in a business.

It takes 38 days to start a business in China.

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Image: A factory in China.

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Singapore (Rank 1)

The rules for starting a business have been simplified in Singapore. It is possible to incorporate a company and register for taxes using the same online form.

The country is ranked second in dealing with construction permits. The permits are made easier with new workplace safety and health regulations that allow low-risk industries to submit documents online.

Property registration was eased by improving its computerised system. It takes 3 days to start a business in Singapore.

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Image: Singapore port.

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Hong Kong (Rank 2)

Starting a business has been eased by simplifying registration and merging procedures.

Property registration has also become easier, because the stamp duty for the sale act can now be submitted online.

The country is ranked first in dealing with construction permits and third in protecting investors.

It takes 6 days to start a business in Hong Kong.

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Image: Disneyland in Hong Kong.
Photographs: Reuters.
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New Zealand (Rank 3)

New Zealand is ranked first in terms of starting a business and protecting investors. It is also easier to get credit in New Zealand.

It takes just one day to start a business. The process can now be completed in one simple online registration.

The fees related to the construction permitting process were increased. The corporate income tax rate was reduced from 33 per cent to 30 per cent.

A reorganisation procedure was introduced to make it easier for companies in distress.

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Image: New Zealand Stock Exchange.

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United Kingdom (Rank 4)

The process of dealing with construction permits was eased with wider use of approved inspectors, reducing the time and number of steps required.

The lodging of a land transaction return is now processed automatically and electronically by the revenue and customs authority, reducing the time to register property.

It is ranked second in terms of getting credit and 7th in terms of closing a business.

It takes 13 days to start a business in the UK.

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Image: London.

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United States (Rank 5)

The US ranks fifth in protecting investors, sixth in giving credit and 9th in starting a business.

It takes 6 days to start a business and is ranked 14th in terms of closing a business.

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Image: Ford plant.

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Denmark (Rank 6)

Denmark eased business start-ups by reducing the minimum capital requirement for limited liability companies from $22,850 to $14,620.

The number of procedures for registering property has been reduced. It is ranked 6th in terms of starting a business, and 5th in closing in business.

It takes 6 days to start a business.

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Image: Denmark.

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Canada (Rank 7)

Canada increased the efficiency of the courts by expanding electronic document submission and streamlining procedures.

Canada is ranked 7th in ease of doing business, 3rd in starting a business and closing a business and fifth in protecting investors.

It is now possible to start a business by going on-line and completing 1 simple procedure.

The country reduced the corporate income tax rate, abolished the surtax of 1.12 per cent and increased the depreciation rate for various assets. It takes 6 days to start a business.

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Image: Canada.
Photographs: Reuters.
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Norway (Rank 8)

Norway scores high in terms of registering property at eighth position and fourth in enforcing contracts and closing business.

Norway ranks 33rd in terms of starting a business, 8th in registering a property and fourth in enforcing contracts and closing business.

It takes 7 days to start a business.

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Image: Norway.

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Ireland (Rank 9)

Ireland is ranked 11th in terms of starting a business, fifth in protecting investors and 7th in paying taxes.

It takes 13 days to start a business. It is ranked 9th in terms of closing a business.


Image: Dublin.

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Australia (Rank 10)

Australia is ranked second in terms of doing business, sixth in getting credit, and 12th in terms of closing a business.

The registration fee was cut in half from 800 to 400 Australian Dollars, reducing cost, as measured by the Doing Business indicator, from 1.8 per cent to 0.8 per cent of Gross National Income (GNI) per capita.

It takes just 2 days to start a business.


Image: Australia.

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