Doing Business in Cyprus
Sylvia Solf
Global Product Lead, Investment Climate
Department, World Bank Group
Nicosia
July 4th, 2014
Doing Business indicators – measuring business
regulations throughout the lifecycle of a firm
DO NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of
labor skills, proximity to markets, or of regulation specific to foreign investment or financial markets.
2
Methodology – How complex are simple
transactions if all rules are followed?
•
•
•
•

Focus on regulations relevant
to a small to medium-sized
domestic business.

Built on standardized case
scenarios.

Are measured for the most
populous city in each country.

Are focused on the formal
sector.
Measure procedural efficiency of the regulatory process
Follow the entrepreneur from the beginning to the end of a basic transaction
Record every step of the process, and the associated time and cost
Gather all the relevant laws, regulations, decrees and fee schedules
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3
How strong are regulations in protecting
investors and property rights?
Example: Protecting Investors
•
•
•
Measures disclosure requirements,
liability rules and legal recourse
options for shareholders when
directors do not act in their interest
Where those rules are stronger,
investors are more likely to invest
Assigns value based on laws,
regulation
Extent of Disclosure
• Approval of related-party
transactions
• Disclosure requirements
Extent of Director
Liability
• Ability to hold interested
party liable
• Available remedies
Ease of Shareholder
Suit
• Information available
during trial
•Access to company
documents
4
High rank on the ease of doing business – a result
of efficient regulatory processes and strong legal
institutions
OECD high-income economies have the most business-friendly regulatory
environment on both dimensions
Average ranking on sets of Doing Business indicators
Strength of legal institutions
Stronger
Stronger legal institutions but
more complex and expensive
regulatory processes
Stronger legal institutions and
simpler and less expensive
regulatory processes
Europe &
Central Asia
29
OECD high
income
71
South
Asia 121
Latin America
& Caribbean
Sub-Saharan
Africa
142
88
100
East Asia
& Pacific
107
Middle East
& North Africa
Weaker
Weaker legal institutions and
more complex and expensive
regulatory processes
Complex and expensive
Weaker legal institutions but
simpler and less expensive
Complexity and cost of regulatory processes
Size of bubble represents number of economies
Simple and inexpensive
5
Strong correlation between Ease of Doing
Business and Global Competitiveness Index
6
11 EU members in the top 30 on the ease of doing
business
1. Singapore
16. Taiwan, China
2. Hong Kong SAR, China
17. Lithuania
3. New Zealand
18. Thailand
4. United States
19. Canada
5. Denmark
20. Mauritius
6. Malaysia
21. Germany
7. Korea, Rep.
22. Estonia
8. Georgia
23. United Arab Emirates
9. Norway
24. Latvia
10. United Kingdom
11. Australia
12. Finland
25. Macedonia, FYR
26. Saudi Arabia
27. Japan
13. Iceland
28. Netherlands
14. Sweden
29. Switzerland
15. Ireland
30. Austria
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Pace of reforms remains strong in 2012/13: share
of economies with at least one reform making it
easier to do business
OECD high
Income
58%
EU-28
73%
61%
40%
Europe and
Central Asia
Middle East and
North Africa
60%
75%
Latin America
& the
Caribbean
53%
66%
East Asia and
Pacific
South Asia
Sub-Saharan
Africa
Worldwide, 114 economies implemented 238 reforms in 2012/2013, 18% rise with
respect to 2011/2012.
While in the EU, 17 economies implemented 38 reforms in 2012/2013.
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Malta was not included in Doing Business 2009 report
Croatia
Greece
Czech Republic
Poland
Slovenia
Turkey
Italy
Luxembourg
Romania
Hungary
Cyprus
Bulgaria
Slovak Republic
Portugal
France
Spain
Latvia
Lithuania
Estonia
Belgium
Netherlands
Austria
Germany
Sweden
Finland
United Kingdom
Denmark
Ireland
Cyprus has made efforts to improve its business
regulations, but others are moving faster
90
Distance to Frontier, DB2009-2014
85
80
75
DB2014
70
65
DB2009
60
55
9
On average, Cyprus compares well to other EU
countries
5
Denmark
United Kingdom
Finland
Sweden
Ireland
Lithuania
Germany
Estonia
Latvia
Netherlands
Austria
Portugal
Slovenia
Belgium
France
Cyprus
Regional average
Poland
Slovak Republic
Spain
Hungary
Bulgaria
Luxembourg
Italy
Greece
Romania
Czech Republic
Croatia
Malta
10
12
14
15
17
21
22
24
28
30
31
33
36
38
39
42
45
49
52
54
58
60
65
72
73
75
89
Rank
103
10
21
42
63
84
105
126
147
168
189
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But performance varies greatly among different
areas of the regulatory environment
Highest
1
34
44
70
55
76
74
86
108
Lowest
189
33
Starting a Dealing with
Getting
business construction electricity
permits
64
24
27
38
56
69
45
62
103
Registering
property
EU-28 in DB 14
39
110
Getting
credit
Protecting Paying taxes
investors
Trading
across
borders
Enforcing
contracts
Resolving
insolvency
Cyprus DB 14
11
Cyprus has a strong regulatory framework in some
areas
•
Minority shareholders benefit from
comparatively strong approval and
disclosure requirements in relatedparty transactions
•
Secured transactions legislation
supports the use of movable
collateral
12
But enforcement and commercial dispute
resolution can be slow
13
How much credit information is shared?
Number of economies in EU with each score on
credit information index
Cyprus
14
Construction formalities involve multiple
agencies and approvals
It takes 677 days to complete all formalities and obtain clearances to build a warehouse in
Nicosia
Updating of the land title
Building permit
Town planning permit4
15
Getting an electricity connection takes 247 days
and involves clearances from at least 6 agencies
16
Registering property is not complex but
comparatively costly
17
Transaction costs could be further reduced
in other areas as well
Source: Doing Business 2014 report, World Bank Group.
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Global best performers adopted most of the
good practices across all areas measured
Complexity and cost of
regulatory processes
• Starting a Business: Australia and Canada have a
one-stop shop to start a business and have no
minimum capital requirement
• Trading across borders: Germany adopted all the
good practices in this area, such as allowing
electronic submission and processing documents
and using risk-based inspections
• Paying Taxes: Spain, Sweden and the United
Kingdom have one tax per tax base and allow selfassessment
• Registering Property: Singapore use an electronic
database for encumbrances
• Dealing with construction permits: Hong Kong, SAR
China has a one-stop shop to deliver building
permits
• Getting Electricity: Iceland and Korea, Rep. adopted
all the good practices in this area, including
providing transparent connection costs and
processes
Strength of legal institutions
• Protecting Investors: Canada regulates the
approval of related party transactions and clearly
define duties for directors
• Getting Credit: Malaysia and United Kingdom allow
a general description of collateral and maintain a
unified registry
• Enforcing Contracts: Germany adopted all the good
practices in this area, such as maintaining
specialized commercial courts.
• Resolving Insolvency: Japan and New Zealand have
a legal framework for out-of-court workout
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Thank you!
www.doingbusiness.org
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