DOING BUSINESS IN ITALY 2013 Smarter Regulations for Small and Medium-sized Enterprises Rome, Italy - November 14, 2012 Augusto Lopez-Claros Director, Global Indicators & Analysis World Bank-IFC

Doing Business indicators reflect on some of the most important obstacles firms face  Based on Enterprise Surveys in 118 countries around the world  Direct responses from representative samples of the private sector  Access to finance, electricity, informality and tax rates are the top obstacles across the developing world Percent of firms identifying the problem as the main obstacle to their business activity 2

The Doing Business indicators have a strong theoretical foundation  The Regulation of Entry: Countries that regulate entry more heavily have greater corruption and larger unofficial economies, but not better quality of public or private goods.  Private Credit in 129 Countries: Creditor protection through the legal system and information sharing institutions such as credit bureaus are associated with higher ratios of private credit to GDP. Credit rises after improvements in creditor rights and in information sharing.  Trading on Time: Each additional day that a product is delayed prior to being shipped reduces trade by more than one percent.  Courts: Procedural formalism is associated with higher expected duration of judicial proceedings, more corruption, less consistency, less honesty, less fairness in judicial decisions, and inferior access to justice  The Regulation of Labor: Heavier regulation of labor is associated with a larger unofficial economy, lower labor force participation, and higher unemployment, especially of the young  The Effect of Corporate Taxes on Investment and Entrepreneurship: The corporate tax rate has a large adverse impact on aggregate investment, FDI, and entrepreneurial activity. It is also correlated with investment in manufacturing as well as with the size of the informal economy. 3

Doing Business indicators – 11 areas of business regulation (10 included in the DB2013 ranking) covering 185 economies 4 Property rights Investor protection Access to credit Entry Administrative burden Flexibility in hiring Recovery rate Reallocation of assets 4

 The overall ease of doing business: (1) Starting a business (2) Dealing with construction permits (3) Getting electricity (4) Registering property (5) Paying taxes (6) Trading across borders (7) Enforcing contracts (8) Protecting investors (9) Getting credit (10) Resolving insolvency Singapore Top ranked countries in DB2013 Honk Kong SAR, China New Zealand Denmark 5 United States4 Norway6 United Kingdom Korea, Rep. Georgia9 Australia How does Doing Business measure a country’s ease of doing business? 5

Economies that rank high on the ease of doing business tend to combine efficient regulatory processes with strong legal institutions OECD high-income economies have the most business-friendly regulatory environment on both dimensions 6

Italy’s performance in Doing Business 2013  Italy, represented by Rome, ranks 73 out of 185 economies on the ease of doing business.  Since 2005 Italy has implemented a total of 14 institutional or regulatory reforms. 7

Italy’s reforms improved various regulatory processes since

What do Subnational reports add? Expand Doing Business indicators beyond the city measured by the annual report Include rules and regulations at all levels of government Capture local differences in regulations or enforcement Provide information on good practices within the same country that can be easily replicated Give specific locations an opportunity to tell their story Provide a tool for locations to compete with 185 economies Combine Doing Business media appeal with active participation of subnational governments in the reform process 9

Subnational reports in over 50 countries Government buy-inBroad coverage 7 reports funded directly by client governments 15 economies with 2nd or 3rd-round reports Over 50 economies included Over 350 cities covered BRICs + M included 10

Milan Turin Bologna Bari and the port of Taranto Catanzaro and the port of Gioia Tauro Padua Palermo and the port of Catania Rome Naples and the Port of Naples Cagliari and the port of Cagliari Potenza Campobasso L’Aquila What does Doing Business in Italy 2013 cover? Port of Trieste Port of Genoa  4 indicators in 13 cities 1.Starting a business 2.Dealing with construction permits 3.Registering property 4.Enforcing contracts  Trading across borders indicator in 7 ports  Data collected from 370 contributors is current as of June

12 No city outperforms the others in all areas City Ease of starting a business Ease of dealing with construction permits Ease of registering property Ease of enforcing contracts Bari, Apulia69713 Bologna, Emilia-Romagna41111 Cagliari, Sardinia11265 Campobasso, Molise13835 Catanzaro, Calabria11057 L’Aquila, Abruzzo9398 Milan, Lombardy83710 Naples, Campania Padua, Veneto2512 Palermo, Sicily51229 Potenza, Basilicata Rome, Latium76134 Turin, Piedmont10791

13 Trading across borders Gateway ports Transshipment and regional ports 1 Genoa, Liguria 1 Catania, Sicily 2 Trieste, Friuli Venezia Giulia 2 Taranto, Apulia 3 Naples, Campania 3 Gioia Tauro, Calabria 4 Cagliari, Sardinia

14 Registering property in Bologna, Naples or Palermo — faster than in Japan

15 h Local building permits drive time and cost variations in Dealing with construction permits

Starting a business is fast but expensive 16

It is faster to enforce a contract inTurin 17

Exporting — slower than in the average EU economy 18

Italian cities can learn from each other 19 Doing Business indicator Best practices within Italy Italian best practices compared internationally (global rank) Italy’s performance in DB2013, represented by Rome (global rank) Starting a business 6 procedures Bari, Bologna, Cagliari, Catanzaro, L’Aquila, Milan, Naples, Padua, Palermo, Potenza, Rome, Turin daysMilan, Padua, Rome 12.2% of income per capitaBari 9.7% of income per capita minimum capital requirement All cities Dealing with construction permits 11 proceduresCagliari, Rome daysMilan 45.1% of income per capitaNaples Registering property 3 procedures Bologna, Milan, Naples, Palermo, Rome, Turin daysBologna, Naples, Palermo 4.3% of property valueCatanzaro Enforcing contracts 41 procedures All cities daysTurin 20.5% of claim valuePotenza Ease of doing business (Hypothetical city “Italiana”) 5673

More new firms are registered after reforms making it easier to start a business 20

Good business regulations and governance In countries where business regulation is efficient and information on documentation requirements and fee schedules is easily accessible, the costs to start a business are much lower. 21

Thank you. For more information: 22