The government’s drive to cut red tape and corporate tax has seen the UK move up the international league table for doing business in a year that has seen both rich and poor countries strive to ease regulations on setting up and running companies, the World Bank said.
Britain rose from eighth place to sixth in the Washington-based organisation’s rankings and was the highest placed of the G7 group of leading industrial nations.
The bank said developing countries had quickened the pace of reforms but the highest positions in the list of 189 countries in its annual 2016 Doing Business report were again taken by high-income states.
Singapore headed the top 10, followed by New Zealand, Denmark, South Korea, Hong Kong, Britain, the US, Sweden, Norway and Finland.
Sajid Javid, Britain’s business secretary, said: “The UK has once again climbed up the rankings and is one of the top places in the world to do business, getting closer to the government’s target of reaching the top five. This is international recognition of the UK’s strong and stable business environment, competitiveness and entrepreneurial spirit.”
The Department for Business Innovation and Skills said steps taken to improve the ease of doing business had included a pledge to cut £10bn of red tape, a promise to reduce corporation tax to 18%, increasing the number and quality of apprentices, investing in research and building stronger trade ties with emerging markets.
“Despite being among the top performers, OECD high-income economies remain committed to further improving the regulatory environment for local small and medium-sized enterprises,” said Augusto Lopez-Claros, director of the World Bank’s global indicators group, which produces the report.
“In the past year, entrepreneurs in many economies saw reforms that emphasised facilitating doing business via online platforms for every aspect of running a company – from initial registration to filing taxes.”
The World Bank study found that 60% of countries had announced measures designed to improve their business rules over the past year, while 85 developing countries had implemented 169 separate reforms, an increase from 154 in the previous year.
The data shows the amount of time it takes to start a new business worldwide has been cut by more than half – from 51 to 20 days – since 2003. It said progress had been marked in sub-Saharan Africa, which accounted for 30% of the reforms and half the countries regarded as the biggest improvers. The length of time to start a business in Mozambique fell from 168 days to 19 in the past 12 years.
Kaushik Basu, the World Bank’s chief economist, said: “A modern economy cannot function without regulation and, at the same time, it can be brought to a standstill through poor and cumbersome regulation. The challenge of development is to tread this narrow path by identifying regulations that are good and necessary, and shunning ones that thwart creativity and hamper the functioning of small and medium enterprises.”
This article was written by Larry Elliott, for theguardian.com on Tuesday 27th October 2015 19.00 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010