Singapore scores second on 2019 Ease of Doing Business ranking

0
28

Doing Business 2019 is the 16th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. Founded on the principle that economic activity benefits from clear and coherent rules on property rights, dispute resolution and protection of contractual partners, the report ranks counties according to an “Ease of Doing Business (EoDB) Ranking”  that covers eleven areas of business life including starting a business, paying taxes, trading across borders and enforcing contracts.

How Singapore Ranked

Among the 190 economies studied, Singapore was placed second in the EoDB ranking with a score of 85.24, an improvement of 0.27 points, this places it behind New Zealand in first place. It was one of three Asian economies in the top 10, with Hong Kong in fourth place and South Korea in fifth.

In particular, Singapore scored well in its regulatory practices relating to the payment of taxes, with the lowest hours per year devoted to the payments, as well as relatively high total tax and contribution rates.

Characteristics of the top 20 economies

The report states that the top 20 economies share a number of international good practices. In the area of starting a business, 13 of these economies have at least one procedure that can be completed online in 0.5 days. Indeed, a common theme across the highest-scoring economies was widespread use of electronic systems, with all of the top 20 offer online business incorporation, electronic tax filing and online property transfers.

Additionally, the quality of legal infrastructure and the strength of legal institutions is also robust  in these economies, with strong safeguards to creditors in insolvency proceedings, and court automation prevalent leading to fast enforcement of judgement. These economies also have strong disclosure requirements in place to prevent the misuse of corporate assets by directors for personal gain. Most mandate that a shareholder must immediately disclose transactions—as well as any conflicts of interest— to other shareholders.

Areas of Improvement

Singapore’s rise in score can be attributed to two measures: the abolishment of corporate seals, which make it easier to start a business, and an expansion in the alternative dispute resolution framework with a consolidated law on voluntary mediation that makes it easier to enforce contracts.

Stressing the importance of good rules

The Doing Business organisation is founded on the principle that economic activity benefits from clear and coherent rules: rules that set out strong property rights, facilitate the resolution of disputes and provide contractual partners with protections against arbitrariness and abuse.

Such rules are much more effective in promoting growth and development when they are efficient, transparent and accessible to those for whom they are intended. The strength and inclusivity of the rules also have a crucial bearing on how societies distribute the benefits and finance the costs of development strategies and policies.

The objective behind the report is to encourage regulation that is efficient, transparent and easy to implement so that businesses  can thrive and promote economic and social progress.