Bulgaria: Top-10 reformer in doing business Simeon Djankov October 10, 2007

Doing Business indicators 2007 2008 2009 Starting a business Dealing with licenses Employing workers Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business Update of 2007 Add 3 countries (Brunei, Liberia, Luxembourg) Add Not paying bribes Add Using infrastructure

Top Reformers in 2006/2007 Economy Starting a business Dealing with licenses Employing workers Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business Egypt Croatia Ghana Macedonia, FYR Georgia Colombia Saudi Arabia Kenya China Bulgaria ^ Key message #2: Egypt is top-reformer, jumping up 26 places in aggregate rankings.

Bulgaria – world’s top reformer on Paying Taxes Reduced the total tax rate by 5.7% by slashing: - social security contributions - one-off tax on various corporate expenses 2. Reduced the number of tax payments from 31 in 2005/06 to 17 in 2006/07 in 1 year due to the popularization of online filing for income tax and social security contributions

Eastern Europe and Central Asia countries reformed the most… Countries with at least one positive reform in 2006/2007 (%) Key message #4 ECA reforming the quickest, as a region they have surpassed East Asia for the first time this year

Eastern Europe surpasses East Asia on the ease of doing business Average Rank, Ease of Doing Business Key message #1: As reforms pick up, more businesses start up. ECA witnessed 59 reforms over the past year.

Countries ranked by ease of doing business, quintiles Business friendly regulation leads to more registered businesses and start-ups Business density (registered firms per capita) Business entry (new firms in % of registered firms) Message #1: As reforms pick up more business start up. Georgia now has 15 registered business out of 100 (like Malaysia). Easiest Most difficult Easiest Most difficult Countries ranked by ease of doing business, quintiles Source: Doing Business database

More reforms, higher equity returns 3-year shareholder returns Egypt Colombia Key message #5: Equity returns are highest in countries reforming the most. Investors looking at upside potential, movement rather than starting point. Brazil Poland India Sri Lanka Venezuela Number of reforms, 2003-2006

Ease of doing business in the EU Bulgaria, a recent member of the EU surpassing its EU neighbors on the ease of Doing Business, i.e. Romania and Greece. It also surpasses some of the older EU-members, e.g. Italy.

Bulgaria is on par with its peers Bulgaria at #46 surpassed all of its neighbors on ease of Doing Business

Top 25 on the ease of doing business, 2007 Singapore New Zealand United States Hong Kong, China Denmark United Kingdom Canada Ireland Australia Iceland Norway Japan Finland Sweden Thailand Switzerland Estonia Georgia Belgium Germany Netherlands Latvia Saudi Arabia Malaysia Austria Key message #3: Singapore tops the list for 2nd year in a row Bulgaria #46 (it jumped 8 places from back calculated #54 in 2007)

Bulgaria – overall ranking #46 Topic Bulgaria #46 World’s best Starting a business #100 Australia Dealing with licenses #103 St. Vincent & the Grenadines Employing workers #57 United States Registering property #62 New Zealand Getting credit #13 United Kingdom Protecting investors #33 Paying taxes #88 Maldives Trading across borders #89 Singapore Enforcing contracts #90 Hong Kong, China Closing a business #72 Japan

Bulgaria can facilitate the procedures for starting a business Best Practices Cut paid in minimum capital requirement Merge formalities through one-stop shop Introduce online registration DB08 Ease of Starting a business

… and reduce the costs of dealing with licenses Best Practices Review licenses periodically Make information easily available Introduce electronic filing DB08 Ease of Dealing with Licenses

For more information, please visit www.worldbank.org and www.doingbusiness.org