Doing Business 2008 in CROATIA Presented by Michael U. Klein Vice President, The World Bank & Chief Economist, IFC

2 Doing Business indicators Update of 2007 Add 3 countries Reformer’s Club:  11 case studies Starting a business Dealing with licenses Employing workers Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business Add Not paying bribes Add Using infrastructure Research program on regulation and business opportunities for women 2009

3 Focus on steps, time and cost is Doing Business basic methodology Cost (% of GNI per capita) Time (Number of days) Time (left axis) Cost (right axis) Starting a Business in Madagascar

4 16. Switzerland 17. Estonia 18. Georgia 19. Belgium 20. Germany 21. Netherlands 22. Latvia 23. Saudi Arabia 24. Malaysia 25. Austria 26. Lithuania 27. Mauritius 28. Puerto Rico 29. Israel 30. Korea 1. Singapore 2. New Zealand 3. United States 4. Hong Kong, China 5. Denmark 6. United Kingdom 7. Canada 8. Ireland 9. Australia 10. Iceland 11. Norway 12. Japan 13. Finland 14. Sweden 15. Thailand Top 30 on the ease of doing business, 2007

5 Top Reformers in 2006/2007 EconomyStarting 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

6 Eastern Europe and Central Asia reformed the most … Countries with at least one positive reform in 2006/2007 (%)

7 Eastern Europe surpasses East Asia in ease of doing business Average Rank, Ease of Doing Business

8 Ease of Doing Business in Eastern Europe

9 Croatia’s overall ranking: #97 TopicCroatia’s RankWorld’s best Starting a business 93 Australia Dealing with licenses162 St. Vincent & the Grenadines Employing workers139 United States Registering property99 New Zealand Getting credit48 United Kingdom Protecting investors122 New Zealand Paying taxes43 Maldives Trading across borders 96 Singapore Enforcing contracts45 Hong Kong, China Closing a business78 Japan

10 Easier entry regulations, lower taxes, faster property transfers among the most popular reforms in the world (2006/2007) Number of positive reforms

11 Croatia made it easier to start a business: it now takes 8 procedures and 40 days Cost (% of GNI per capita) Time (Number of days) Time (left axis) Cost (right axis)

12 Easier access to credit : The more information available, the easier is it for banks to do risk assessment of borrowers. 2 big reforms in Croatia  HROK – Croatian registry of credit  Fully operational from May 2007  Coverage of borrowers increased from 0 to 72%  New collateral registry  In first 2 months EUR 1.4 billion in credit was registered

13 It also became easier to register property Registration at the Land Registry decreased from 399 to 174 days due to ongoing reforms at the Land Registry

14 Closing a business now takes less time Amendments to Insolvency Law  introduced professional requirements for bankruptcy trustees  decreased timelines

15 Dealing with licenses: Consolidate procedures, cut number of procedures, lower costs 1. Preliminary fire approval 2. Preliminary electricity approval 3. Preliminary waste collection approval 4. Preliminary telecommunications approval 5. Preliminary water approval 6. Excerpt from the Land Registry 7. Possession list for subject and bordering lands 8. Copy of cadastre plan 9. Location permit 10. Project clearance from fire department 11.Project clearance from sewerage authority 12. Project clearance from telephone provider 13. Noise protection and work safety clearance 14. Sanitary conditions clearance 15. Obtain utilities decision 16.Obtain building permit 17.Obtain water and sewage connection 18.Obtain power connection 19.Obtain telephone connection 20.Apply for occupancy permit 21.Receive on-site inspection and signature of completion statement 22.Inform tax authority about new building

16 More reforms, higher equity returns Number of reforms, year shareholder returns Venezuela Egypt Colombia Sri Lanka India Brazil Poland Source: Doing Business database, Morgan Stanley Capital International data

17 Business friendly regulation leads to more registered businesses and start-ups Countries ranked by ease of doing business, quintiles Easiest Most difficult Source: Doing Business database Business density (registered firms per capita) Business entry (new firms in % of registered firms) Most difficult Easiest

18 …and higher shares of female entrepreneurs and women in the labor force Countries ranked by ease of doing business, quintiles Most difficult Female Entrepreneurs (% of entrepreneurs) Easiest Source: Doing Business database, Enterprise Surveys, WDI Female unemployment (% of male unemployment) Most difficult Easiest

19 Doing Business website has many resources