Country scores low in ease-of-doing-business index

The country finished second to last among Central American states in an assessment of the ease of doing business here. The rating was by the World Bank Group – International Finance Corp., which awarded Costa Rica 125th place among nations of the world.

The report, released Tuesday, ranked Costa Rica 116th in the ease of starting a business. It said doing that requires 13 procedures and takes about 60 days.

The report also said that getting a construction permit requires 23 procedures and takes an average of 191 days.  The ranking in this category was 131.

The country fared better in an assessment of how long it takes to register property (21 days and six procedures) and the ease of getting credit (65th place).

Costa Rica got bad marks for protecting investors (167th place), paying taxes (155th place) with an estimated 42 different payments by businesses each year and an average investment of 272 work hours to compute them and in enforcing contracts (130th place).  The report said that legal steps to enforce a contract averaged 852 days.

Even closing a business was difficult, the report said. Costa Rica ranked 114th in this area.

The report also said that Costa Rica had not made any legislative changes that affected the rating in the last year.

Singapore, Hong Kong, New Zealand, the United Kingdom, the United States, Denmark and Canada were ranked from one to seventh in that order.

In all, 181 economies were ranked in the 2011 report, which is the eighth. The report indexed 11 areas of business life as of June 1.

The full report is on a dedicated Web site. The report called on the laws of each country and some 8,200 specialists who made the assessments.

“A fundamental premise of ‘Doing Business’ is that economic activity requires good rules — rules that establish and clarify property rights and reduce the cost of resolving disputes; rules that increase the predictability of economic interactions and provide contractual partners with certainty and protection against abuse.” said the report.  “The objective is regulations designed to be efficient, accessible to all and simple in their implementation. ‘Doing Business’ gives higher scores in some areas for stronger property rights and investor protections, such as stricter disclosure requirements in related-party transactions.”

The authors said the report takes the perspective of smaller companies who must deal with the local laws and regulations. Doing business remains easiest in the high-income economies, it said. Of the top 25 economies, 18 made it easier to do business during the year covered by the report, it said.

Kazakhstan was the economy listed as improving the most, followed by Rwanda and Perú.  The report is full of charts and citations to additional information and makes it clear that the goal is to encourage governments to make business easier.

Panamá, of course, was tops in the isthmus at 72nd place with El Salvador at 86, Guatemala at 101 and Nicaragua at 117.

Honduras trailed Costa Rica at 131.

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