New Zealand has topped the World Bank’s annual study for ease of doing business for the fourth consecutive year, since it took over from Singapore in 2016.
Doing Business 2020 is the 17th annual study in a series investigating the impact of regulations on national economies by the World Bank.
The study compares 190 countries ranked by their economic performance across 12 business regulatory areas which occur in the lifetime of a business; from opening, accessing location and finance, and operating securely.
New Zealand scored 86.8 of 100 points, followed by Singapore (86.2) and Hong Kong SAR, China (85.3).
A common theme of high scoring countries in the rankings is widespread use of electronic systems in place for activities such as business incorporation or tax-filing.
Doing Business’ scoring assesses national economies’ absolute regulatory performance by business activity over time.
Using the best performing score in each category from prior years as the benchmark (100), the study ranks each economy based on their own performance, meaning their progress can be tracked year by year.
This approach means the World Bank can proudly say 115 countries have made it easier to do business in 2020 through regulatory reform, as they gauge the disparity between developed and developing nations.
New Zealand’s Doing Business 2020 profile shows it was ranked first in starting a business and getting credit, second in registering property, third in protecting minority investors and ninth in paying taxes.
New Zealand also ranked seventh in dealing with construction permits, 23rd in enforcing contracts, 36th for resolving insolvency, 48th in getting electricity, and 63rd for trading across borders.
Last year, New Zealand ranked top in ease of doing business with an overall score of 86.59.
The World Bank says regulation exists to protect workers, public safety, businesses and investment, but inefficient or inadequate regulation can stifle entrepreneurial activity or sustainable business growth.
The World Bank also posits that the close relationship between freedom to do business and economic development are key principles of eliminating poverty and pursuing shared prosperity among national economies.
Starting a business
Since 2009, New Zealand has been ranked first by the World Bank’s Doing Business series for the ease of starting a business.
Since then, it has taken only half a day and costs less than 0.5% of income per capita, to incorporate a Limited Liability Company with the Ministry of Business, Innovation and Employment’s Companies Office.
In Doing Business 2020, the cost of starting a business in New Zealand was just 0.2% of income per capita.
The World Bank’s latest method measured the length and cost of the procedure for married men and women entrepreneurs to start and begin running a business.
For processes which could be completed online, the minimum time allowed measurable was 0.5 days.
All fees and costs associated with completing procedures to start a business that were measured included legal and professional services fees if they are required by law or commonly used in practice. Value-added taxes and bribes were excluded.