1. Financial & Private Sector Development 1 Doing Business in Tajikistan Dushanbe, Tajikistan November 15, 2010 Andrea Dall’Olio Senior Economist, Finance and Private Sector Development Department, Europe and Central Asia

2. Financial & Private Sector Development Agenda 2  About Doing Business  Reform Trends: Globally and Regionally  Reform Trends: Tajikistan  Tajikistan’s Reforms in 2009-2010  Conclusion – Next Steps

3. Financial & Private Sector Development What does Doing Business measure? Doing Business indicators: Focus on regulations relevant to the life cycle of a small to medium-sized domestic business Are built on standardized case scenarios Are measured for the most populous city in each country Are focused on the formal sector DO NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, or of regulation specific to foreign investment or financial markets 3

4. Financial & Private Sector Development 4 Doing Business indicators – 11 areas of business regulation (9 included in the ranking) Property rights Investor protection Access to credit EntryAdministrative burden Flexibility in hiring Recovery rate Reallocation of assets

5. Financial & Private Sector Development 1. Singapore16. Korea, Rep. 2. Hong Kong SAR, China17. Estonia 3. New Zealand18. Japan 4. United Kingdom19. Thailand 5. United States20. Mauritius 6. Denmark21. Malaysia 7. Canada22. Germany 8. Norway23. Lithuania 9. Ireland24. Latvia 10. Australia25. Belgium 11. Saudi Arabia26. France 12. Georgia27. Switzerland 13. Finland28. Bahrain 14. Sweden29. Israel 15. Iceland30. Netherlands Top 30 economies on the ease of Doing Business 2009/10 5

6. Financial & Private Sector Development Agenda 6  About Doing Business  Reform Trends: Globally and Regionally  Tajikistan’s Global Positioning in DB  Tajikistan’s Specific Reforms

7. Financial & Private Sector Development Percentage of countries with at least one positive reform in 2009/10 84% 61% 63% 75% 59% 47% 67% OECD high Income Eastern Europe and Central Asia Sub-Saharan Africa Middle East and North Africa Latin America and Caribbean South Asia East Asia and Pacific Strong global pace of reforms making business easier: 216 in 117 economies 7

8. Financial & Private Sector Development 21 of 25 economies in Eastern Europe & Central Asia improved business regulations this year Among 49 reforms in 9 areas of business regulation, Paying taxes and Starting a business were the most popular 8

9. Financial & Private Sector Development Many one-stop shops for starting a business in Eastern Europe and Central Asia 9 More one-stop shops have been established in Eastern Europe and Central Asia than in any other region. Since 2002, 20 economies in the region integrated several registers under one function freeing entrepreneurs from having to visit separate agencies involved in business start-up.

10. Financial & Private Sector Development 10 Eastern Europe and Central Asia is the second best performing region in 2009/2010 139 Tajikistan 10

11. Financial & Private Sector Development Agenda 11  About Doing Business  Reform Trends: Globally and Regionally  Reform Trends: Tajikistan  Tajikistan’s Reforms in 2009-2010  Conclusion – Next Steps

12. Financial & Private Sector Development Tajikistan among the 10 economies improving the most in the ease of doing business in 2009/10 Economy Starting a business Dealing with construction permits Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam 12

13. Financial & Private Sector Development … however Tajikistan has still a long way to go 13

14. Financial & Private Sector Development Tajikistan is among the top 20 economies which improved the most their business regulation over the past 5 years …

15. Financial & Private Sector Development … and in particular over the past two years Tajikistan made considerable improvements over time Croatia made of lot of progress in DB08 with a vast program of reforms Ukraine reformed with a steady pace every year from DB09 to DB11 15 Total business easing reforms after DB06: 10 13 13 20 Egypt Arab Rep. jumped into the reform race from DB07 5-year measure of cumulative change

16. Financial & Private Sector Development Agenda 16  About Doing Business  Reform Trends: Globally and Regionally  Reform Trends: Tajikistan  Tajikistan’s Reforms in 2009-2010  Conclusion – Next Steps

17. Financial & Private Sector Development Tajikistan’s progress in improving regulatory environment for the private sector since DB 2007 DB Report Year Starting a business Dealing with construction permits Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business 2011 2010 2009 2008 2007 17 Tajikistan has been one of the top 10 economies that improved the most in the ease of doing business for two years in a row

18. Financial & Private Sector Development Tajikistan’s global rank in each Doing Business indicator Topic World’s top ranked 2009/10 Eastern Europe and Central Asia’s top ranked 2009/10 Tajikistan’s global rank Tajikistan’s regional rank* Starting a businessNew Zealand Macedonia, FYR (5) Belarus (7) 13623 Dealing with construction permits Hong Kong SAR, China Georgia (7) Estonia (24) 17823 Registering propertySaudi Arabia Georgia (2) Armenia (5) 8718 Getting creditMalaysia Latvia (6) Bulgaria (6) 16825 Protecting investorsNew Zealand Kyrgyz Republic (12) Albania (15) 5910 Paying taxesMaldives Estonia (30) Cyprus (32) 16523 Trading across borders Singapore Estonia (4) Latvia (16) 17824 Enforcing contractsLuxembourg Belarus (12) Latvia (14) 409 Closing a businessJapan Cyprus (22) Kosovo (31) 647 18 *Out of 25 economies in the Eastern Europe and Central Asia region

19. Financial & Private Sector Development One stop shop allows a business owner to register a company with the state, the tax authority, the statistics body and the social fund in one place New law eliminated previously required documents: permission for making a company seal, confirmation and information letters, and Charter of a legal entity Starting a business in Tajikistan became easier, improving its Starting a business rank from 151 to 136

20. Financial & Private Sector Development 20 Tajikistan strengthened investor protections by requiring greater corporate disclosure Tajikistan amended its Joint Stock Company law in January 2010 requiring detailed disclosure of transactions between interested parties in the annual report, and granting shareholders access to all corporate documents 6565

21. Financial & Private Sector Development Tajikistan has reduced the tax burden on businesses by lowering corporate income tax 21 Effective January 1, 2009 tax rates were changed across industries. Applicable tax rate for TaxpayerCo is now 15%, reduced from 25% in 2008.

22. Financial & Private Sector Development Agenda 22  About Doing Business  Reform Trends: Globally and Regionally  Reform Trends: Tajikistan  Tajikistan’s Reforms in 2009-2010  Conclusion – Next Steps

23. Financial & Private Sector Development Moving Forward… 23  Implement Single Registration Number  Complete the process of harmonization of existing legislation with the Law on State Registration  Modernize the existing system to facilitate the use of moveable assets as collateral, to improve access to credit for SMEs  Ensure that the credit bureau is operational  Streamline procedures relating to trade, payment of taxes, and registering property  Ensure adequate implementation of the reforms already completed

24. Financial & Private Sector Development Thank you. For more information please visit: www.doingbusiness.org 24