Financial & Private Sector Development 1 Doing Business in Poland Warsaw, Poland November 4, 2010...

Financial & Private Sector Development1

Doing Business inPoland

Warsaw, PolandNovember 4, 2010

Marcin PiątkowskiSenior Economist

Financial & Private Sector Development

What does Doing Business measure?

Doing Business indicators:

Focus on regulations relevant to the life cycle of a small to medium-sized domestic business.

Are built on standardized case scenarios.

Are measured for the most populous city in each country.

Are focused on the formal sector.

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.

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Doing Business indicators – 11 areas of business regulation (9 included in the ranking)

Start-up Expansion Operations Closing Starting a

business

Minimum capital requirement,

procedures, time and cost

Registering property

Procedures, time and cost

Getting credit

Credit information systems

Movable collateral laws

Protecting investors

Disclosure and liability in related party transactions

Enforcing contracts

Procedures, time and cost to resolve a commercial dispute

Dealing with construction permits


Paying taxes

Payments, time and Total Tax Rate

Trading across borders

Documents, time and cost

Getting electricity (annex I)


Employing workers (annex II)

Closing a business

Time, cost and recovery rate

Property rightsInvestor protectionAccess to credit

Entry Administrative burden Flexibility in hiring

Recovery rateReallocation of assets


1. Singapore 16. Korea, Rep.

2. Hong Kong SAR, China 17. Estonia

3. New Zealand 18. Japan

4. United Kingdom 19. Thailand

5. United States 20. Mauritius

6. Denmark 21. Malaysia

7. Canada 22. Germany

8. Norway 23. Lithuania

9. Ireland 24. Latvia

10. Australia 25. Belgium

11. Saudi Arabia 26. France

12. Georgia 27. Switzerland

13. Finland 28. Bahrain

14. Sweden 29. Israel

15. Iceland 30. Netherlands

Top 30 economies on the ease of Doing Business 2009/10

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https://www.cia.gov/library/publications/the-world-factbook/flags/ba-flag.html

https://www.cia.gov/library/publications/the-world-factbook/flags/ba-flag.html


The 10 economies improving the most in the ease of doing business in 2009/10

Economy

Starting a

business

Dealing with

construction permits

Registering property

Getting credit

Protecting

investors

Paying taxes

Trading across

borders

Enforcing contracts

Closing a business

Kazakhstan

Rwanda

Peru

Vietnam

Cape Verde

Tajikistan

Zambia

Hungary

Grenada

Brunei Darussalam

5


Percentage of countries with at least one positive reform in 2009/10

84%

61%

63%

75%

59%

67%

OECD high Income

Eastern Europe and Central Asia

Sub-Saharan Africa

Middle East and North Africa

Latin America and

Caribbean

South Asia

East Asia and Pacific

Strong global pace of improvements in regulations making business easier: 216 in 117 economies

6

47%


Poland improved by 3 positions from 73 in DB10 (as back-calculated) to 70 in DB11 ranking

Poland

37European Union (average rank): Austria, Belgium, Bulgaria, Cyprus, Czech republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, The Netherlands, Poland, Portugal, Romania, Slovak republic, Slovenia, Spain, Sweden, United Kingdom (excluding Malta)

7

70

Baltic states (average rank):Estonia, Latvia, Lithuania

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Poland is among the EU economies that improved the most their business regulation over the past 5 years


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Poland’s ranking relative to other economies in the European Union

Easier to do business More difficult to do business

GreeceItaly

PolandCzech Republic

RomaniaBulgaria

SpainHungary

LuxembourgSlovenia

Slovak RepublicCyprus

EU AverageAustria

PortugalNetherlands

FranceBelgium

LatviaLithuaniaGermany

EstoniaSwedenFinlandIreland

DenmarkUnited Kingdom

0 20 40 60 80 100 120

10980

7063

5651

4946

4542

413737

3231

3026

2524

2322

1714

139

64

Poland ranks 70th on the Ease of Doing Business


In comparison to the European Union 26 country average, Poland ranks lower in 7 out of 9 indicators

Lowest 183

70

113

164

86

15

44

121

49

7781

38

63 64 63

44

67 69

3644

40

Poland

EU26

Highest 1

10


Poland’s performance varies by topic

Topic

Poland

DB 2011

(2010)

Top ranked (OECD* and Global)

Overall rank 70 (73) + New Zealand; Singapore

Starting a business 113 (117) + New Zealand

Dealing with construction permits

164 (164) 0 Denmark; Hong Kong (China)

Registering property 86 (88) + New Zealand; Saudi Arabia

Getting credit 15 (15) 0 United Kingdom; Malaysia

Protecting investors 44 (41) - New Zealand

Paying taxes 121 (151) + Ireland; Maldives

Trading across borders 49 (42) - Finland; Singapore

Enforcing contracts 77 (75) - Luxembourg

Closing a business 81 (85) + Japan


The reform agenda

Recommendations from the World Bank’s

Reform Memorandum 2010


Construction permits - building a warehouse is a lengthy and cumbersome process in Poland

EU Best (Denmark)

Global Best (New Zea-

land)

OECD Av-erage

Poland

6 7

16

32

Global Best (Singapore)

EU Best (Fin-land)

OECD Average Poland

2566

166

311

It takes over 10 months… … and 32 proceduresto build a warehouse


Recommendations to improve theconstruction permitting process

Shorten and enforce statutory approval limits when processing construction and occupancy permits

Streamline procedures to issue construction permits using delegation and notification

Pro-actively use the risk-based approach when processing applications for construction and occupancy permits

Rationalize and consolidate post-completion inspections

Cautiously use “silence is consent” principle in construction


Starting a business in Poland is lengthy and costly

Cost to start a business (% GNI per capita)

EU Best (Denmark, Slovenia)

Global Best (New Zealand)

OECD Av-erage

Poland

0 0.4

5.3

17.5

Global Best (New Zea-

land)

EU Best (Belgium)

OECD Av-erage

Poland

1

4

13

32

Time to start a business (days)


Recommendations to improve starting a business

Short–term reform recommendations:

Unify all numbers into one universal identification number and issue it by the Registration Court; connect all public databases

Make available standard company agreements with the option of drafting and notarizing custom made company agreements, and empower officials to verify signatures

Eliminate separate registrations for National Sanitary Inspection and National Work Inspection; combine registration for VAT at the National Court Register

Eliminate the minimum capital requirement


Number of tax payments per year

Global Best (Maldives,

Quatar)

EU Best (Sweden)

OECD Av-erage

Poland

3 2

14

29

Time to pay taxes (hours)

In paying taxes, numerous payments, complex laws and procedures are main cause of low rank

Global Best (United Arab

Emirates)

EU Best (Luxembourg)

OECD Av-erage

Poland

1

59

199

325

17


Recommendations: Implementing electronic filing of returns

Make electronic filing mandatory for all corporate entities and medium to large businesses (say, with turnover over Euro 1 million)

Digital signatures costly for small firms – make use of tax intermediaries legal

Simplify forms further, making them better suited to e-filing Provide more user-friendly software Popularize electronic filing through targeted communications

campaigns

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Enforcing contracts and closing a business is lengthy

Time to enforce a contract (days)

Time to close a business (years)

Global Best (Ireland)

EU Best (Ire-land)

OECD Av-erage

Poland

0.4 0.4

1.7

3

Global Best (Singapore)

EU Best (Luxembourg)

OECD Av-erage

Poland

150

321

517.5

830


Reforms to improve contract enforcement and closing a business

Conduct a procedural mapping of internal processes at the commercial and insolvency courts; review courts around Poland and share best practices to improve efficiency

Introduce computerized case management system Strengthen court management and improve measurement

of the performance of courts and individual judges Reduce inflow of cases through out-of-court arbitration

and workouts


Thank you. For more information:www.doingbusiness.org

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Financial & Private Sector Development 1 Doing Business in Poland Warsaw, Poland November 4, 2010...

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