Nepal crawls up 3 spots in Doing Business Index

Nepal has crawled up the Doing Business Index by reducing the hassles involved in registering a company. According to the Doing Business Index (DBI) 2014 released by the World Bank and International Finance Corporation on Tuesday, the country rose three places to the 105th position among 189 global economies. Nepal ranked 108th in 2013 and 107th in 2012. Among the 10 indicators under which global economies are evaluated, Nepal did better on two fronts—starting a business and getting electricity. DBI 2013 shows that starting a business in Nepal has become easier over the last year due to a reduction of the administrative processing time at the company registrar and the establishment of a data link between agencies involved in the incorporation process. Nepal introduced electronic filing of documents, reducing registration time from 15 days to seven, the report said. Potential investors now have to complete seven procedures and spend 17 days to register their company before starting a business. In South Asia, it takes an average of 17.2 days to register a company. “We are inspired to know that our ranking has gone up. This shows that even a single reform can actually make a big difference,” said Krishna Gyawali, secretary at the Ministry of Industry. “However, sustainability of the system will be a challenge for us.” According to Shankar Aryal, registrar of the Office of the Company Registrar, the office has registered 337 companies and 1,200 companies have been approved for online registration since online registration started in February. “The office has made it mandatory for new companies to be registered online from Oct 20.” Likewise, Nepal has made a slight improvement in terms of providing electricity. The country scored 98 in this category, up from 99 in 2013. Potential investors have to spend at least 70 days to complete the five procedures necessary to get electricity. In South Asia, the average is 145 days and six procedures. However, obtaining a construction permit has become more difficult with Nepal slipping to the 105th position from the 97th position previously. Potential investors have to spend 115 days and complete 13 procedures to get a construction permit. This is still a little better than the South Asian average of 193.3 days and 16 procedures to get a building licence. According to DBI 2013, Nepal has not made any reforms with regard to paying taxes, trading across borders, enforcing contracts and resolving insolvency. Nepal slipped to 177 in the trading across borders indicator in DBI 2014 from 173 earlier. Exporting a standard container requires 11 documents, takes 42 days and costs US$ 2,295. In South Asia, investors need an average of eight documents, have to spend 33 days and pay US$ 1,787 per container. For imports, a container requires 11 documents, takes 39 days and costs US$ 2,400, the report said. The country has remained unchanged at the 80th position in protecting investors. However, Nepal slipped to 126 from 121 with regard to paying taxes. “An improvement in the starting business index has contributed to a better overall doing business environment in Nepal. But the report has pointed out that the situation is poor compared to last year,” said Chief Secretary Lilamani Poudel. According to him, Nepal has started e-bidding to make obtaining construction permits easier, but that has not been mentioned in the report. Similarly, access to finance is 80 percent in Nepal, nearly double the South Asian average; but according to the report, Nepal shows poor performance in issuing credit. “However, as the transit treaty has remained pending, we should admit that we have not done well in providing transit facilities,” Poudel said. “As other countries have done far better than us, we have to find out what went wrong. We need to compare what we did and what the others did.” Among the region’s economies, Nepal ranks third among the eight surveyed, ahead of Sri Lanka and the Maldives. Singapore tops the global ranking, and following it in the list of the top 10 economies are Hong Kong, New Zealand, the US, Denmark, Malaysia, South Korea, Georgia, Norway and the UK. Among the 10 indicators, Nepal did better on two fronts—starting a business and getting electricity