OTRO DE LOS LOGROS DE FORTUÑO: Puerto Rico edges up in global business survey
Puerto Rico edges up in global business survey
By CB Online Staff
By CB Online Staff
Puerto Rico continues to gain ground in annual rankings of global economies while still showing considerable room for improvement in various categories related to doing business.
The island edged up two spots to 45 out of 183 economies in the newly released Doing Business 2011: Making a Difference for Entrepreneurs report issued by the World Bank and the International Finance Corporation.
Puerto Rico ranked 16 in terms of starting a business, sliding one spot from 15 in the 2010 report.
Still, Puerto Rico performed far better than the Latin American and Caribbean average in terms of how long it takes to start a business. The report found it takes seven days to start a business in Puerto Rico, compared to the Latin American and Caribbean average of 56.7 days. In fact, Puerto Rico bested the Organization for Economic Cooperation and Development (OECD) countries’ average of 13.8 days.
Puerto Rico also performed better than the Latin American and Caribbean region and the OECD economies in two other aspects of starting a business: cost and minimum capital.
Cost is recorded as a percentage of the economy’s income per capita. It includes all official fees and fees for legal or professional services if such services are required by law. Puerto Rico’s 0.7 percent was sharply lower than the 36.2 percent average for Latin American and the Caribbean and the 5.3 percent average in the OECD economies.
The minimum capital gauge refers to the amount that an entrepreneur needs to deposit in a bank or with a notary before registration and up to three months following incorporation and is recorded as a percentage of the economy’s income per capita. Puerto Rico came in at 0 percent. The average in Latin American and the Caribbean is 4.6 percent and 15.3 percent in the OECD economies.
The island lost modest ground in several categories including getting credit (32), paying taxes (108) and trading across borders (106).
Puerto Rico moved up in the categories of enforcing contracts (99) and closing a business (25).
The island’s rankings were unchanged in dealing with construction permits (150), registering property (127) and protecting investors (16).
The Fortuño administration has taken concrete steps to back up its mantra that “Puerto Rico is open for business,” including efforts on key fronts that Puerto Rico ranked relatively low in the Doing Business 2011: Making a Difference for Entrepreneurs report.
On track to come online in December is an overhaul of the permits system that Fortuño administration officials say will transform Puerto Rico into one of the most convenient and transparent places in the world to do business.
The permit reform, contained in the Puerto Rico Permits Process Reform Act, is the first of several administration initiatives to take root that are aimed at improving the business environment in Puerto Rico.
Gov. Luis Fortuño presented a sweeping tax reform plan last month that contains deep cuts in income taxes for individuals and most businesses. The Treasury Department, meanwhile, continues to push more taxpayers to file returns online.
The administration has worked to tighten trade ties with other countries and the Economic Development & Commerce Department is spearheading efforts for Puerto Rican businesses to gain footholds in growing markets including the Dominican Republic and Panamá.
The eighth annual IFC and World Bank report came on the heels of the Geneva-based World Economic Forum’s rankings that moved Puerto Rico up one spot to 41 in that annual gauge of competitive economies.
In the WEF report, Puerto Rico outpaced all Caribbean countries and every Latin American nation except for Chile, which was ranked 35.
For the fifth year running in the ICF-World Bank report, Singapore lead in the ease of doing business, followed by Hong Kong, New Zealand, the United Kingdom and the United States. Among the top 25 economies, 18 made things even easier over the past year.
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.
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. Two other regional economies, Tajikistan and Hungary, were also among the 10 most-improved economies, climbing 10 places and six places respectively.
“Governments worldwide have been consistently taking steps to empower local entrepreneurs,” said Neil Gregory, acting director for global indicators and analysis at the World Bank Group. “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.”
This year’s list of the 10 most-improved economies also includes three in Sub-Saharan Africa — Rwanda (a consistent reformer of business regulation), Cape Verde, and Zambia — as well as Peru, Vietnam, Grenada, and Brunei Darussalam.
Globally, doing business remains easiest in the high-income economies of the OECD and most difficult in Sub-Saharan Africa and South Asia. But developing economies are increasingly active. In the past year, 66 percent reformed business regulation, up from 34 percent six years earlier.
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. China and India are among the top 40 most-improved economies. Among the top 30 most-improved economies, a third are from Sub-Saharan Africa.
Worldwide, more than half the regulatory changes recorded in the past year eased business start-up, trade, and the payment of taxes. Many of the improvements involve new technologies.
“New technology underpins regulatory best practice around the world,” said Janamitra Devan, vice president for financial and private sector development for the World Bank Group. “Technology makes compliance easier, less costly, and more transparent.”
