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Doing Business 2013: Poland in the Global Top 10

Dr. Marcin Piatkowski Senior Economist World Bank

December 19, 2012


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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 (10 included in the DB2013 ranking), covering 185 economies
Start-up Expansion Operations Insolvency

Starting a
business Minimum capital requirement, procedures, time and cost

Dealing with
construction permits Procedures, time and cost

Paying taxes
Payments, time and Total Tax Rate

Resolving
insolvency Time, cost and recovery rate

Getting electricity
Procedures, time and cost

Trading across borders


Documents, time and cost

Registering property
Procedures, time and cost

Enforcing contracts
Procedures, time and cost to resolve a commercial dispute

Getting credit
Credit information systems Movable collateral laws

Employing workers
(annex)

Protecting investors
Disclosure and liability in related party transactions

Entry

Property rights Investor protection Access to credit

Administrative burden Flexibility in hiring


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Recovery rate Reallocation of assets

Top 30 on the ease of doing business index


1. Singapore 2. Hong Kong SAR, China 3. New Zealand 4. United States 5. Denmark 16. Taiwan, China 17. Canada 18. Thailand 19. Mauritius 20. Germany 21. Estonia 22. Saudi Arabia 23. Macedonia, FYR 24. Japan 25. Latvia 26. United Arab Emirates 27. Lithuania 28. Switzerland

6. Norway
7. United Kingdom 8. Korea, Rep. 9. Georgia 10. Australia 11. Finland 12. Malaysia 13. Sweden 14. Iceland 15. Ireland

29. Austria
30. Portugal
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Pace of reforms remains strong in 2011/12: share of economies with at least one reform making it easier to do business

OECD high Income

EU-27

88% 67%

Eastern Europe and Central Asia

68%

47%

Middle East and North Africa

46% 38%
East Asia and Pacific

Latin America & the Caribbean

45%

South Asia

61%
Sub-Saharan Africa

Worldwide, 108 economies implemented 201 reforms in 2011/2012. About two-thirds of European union economies carried out reforms improving their business regulations for small and medium sized business in 2011/12
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Poland is the most-improved economy thanks to its numerous reforms in 2011/12


Ease of Doing Business rank 1 2 3 4 5 6 7 8 9 10 Starting Dealing with Getting Registering Getting Protecting a construction electricity property credit investors Business permits Paying taxes Trading Enforcing Resolving across contracts insolvency borders

Poland Sri Lanka Ukraine Uzbekistan Burundi Costa Rica Mongolia Greece Serbia Kazakhstan

55 81 137 154 159 110 76 78 86 49

Poland has made progress towards the frontier across most Doing Business indicators

Starting a Business 100 Distance to Frontier (Percentage points) 90 80 70 60 50 40 30 20 10 0

Dealing with contruction permits

Registering Property

Getting Credit

Protecting Investors

Paying Taxes

Trading Across Borders

Enforcing Contracts

Resolving Insolvency

In DB13, Poland made paying taxes easier for companies by promoting the use of electronic filing and payment systems the time for paying taxes has decreased as a result by 10 hours from 296 to 286

Regulatory reforms recorded in Poland in all areas measured by Doing Business since DB2006, 20 in total
DB Report Year Starting a business Dealing with construction permits Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Resolving insolvency

2013 2012 2011 2010 2009 2008 2007 2006


Poland has reformed the business environment every year


In 9 areas of Doing Business

Poland is the European Union economy most narrowing the distance to the frontier since 2005
14 Narrowing the Distance to the Frontier from 2005 to 2012 12 10 8 6 4 2 0 -2

Who advanced the most in closing the gap to the frontier ?

Cyprus, Luxemburg and Malta were not included in Doing Business 2006 report.

Poland ranks higher or equal to the EU-27 average in 3 of 10 areas


Highest 1

4 49 62

36 62
50

47
56

36
37

74
124

69

62 74
137

54 68

114

161

Lowest 185

Starting a business

Dealing with construction permits

Getting electricity

Registering Getting credit property

Protecting investors

Paying taxes

Trading across borders

Enforcing contracts

Resolving insolvency

EU-27 in DB 13

Poland DB 13

Poland reformed in the area of property registration in 2011/12


Total time to register property in Warsaw
160 140 120 100

Poland made property registration faster by introducing a new caseload management system for the land and mortgage registries and by continuing to digitize the records of the registries. The average time for applying for registration and the Land Registry or Registry court went from 3 6 months to 14 days 2 months

152
-98 days

80
60 40 20 0

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DB 2012

DB 2013

Poland has cut the time to enforce contracts by a third in Warsaw

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Poland has improved the efficiency of insolvency proceedings in the last 6 years
In 2011/12, Poland strengthened its insolvency process by updating guidelines on the information and documents that need to be included in the bankruptcy petition and by granting secured creditors the right to take over claims encumbered with the right to take over pledged assets in case of liquidation.

Poland is catching up to better performing EU economies thanks to recent reforms

Distance to frontier (percentage points)


80

Czech Republic
75

Estonia France Germany

70

65

Latvia
60

Lithuania
55

Poland

50

2005

2006

2007

2008

2009

2010

2011

2012

Despite Polands progress, it still ranks below the EU-27 average on the ease of doing business
Denmark United Kingdom Finland Sweden Ireland Germany Estonia Latvia Lithuania Austria Portugal Netherlands Belgium France Slovenia Cyprus Regional average Spain Slovak Republic Hungary Poland Luxembourg Czech Republic Bulgaria Romania Italy Greece Malta
5 7

11
13 15 20 21 25 27 29 30 31

33 34 35 36
40 44 46 54 55 56 65 66 72 73 78

102

20

40

60

80

100

120

The reform agenda

The World Banks Recommendations for Doing Business Reforms

Recommendations to improve the construction permitting process Shorten and enforce statutory approval limits when processing construction and occupancy permits

Streamline and re-engineer procedures to issue construction permits to save time and cost of investors 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

Recommendations to improve paying taxes

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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Recommendations to improve starting a business

Unify all numbers into one universal identification number and issue it by the Registration Court

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

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

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