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Financial & Private Sector Development 1 Doing Business in Poland Warsaw, Poland November 4, 2010 Marcin Piątkowski Senior Economist.

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Presentation on theme: "Financial & Private Sector Development 1 Doing Business in Poland Warsaw, Poland November 4, 2010 Marcin Piątkowski Senior Economist."— Presentation transcript:

1 Financial & Private Sector Development 1 Doing Business in Poland Warsaw, Poland November 4, 2010 Marcin Piątkowski Senior Economist

2 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. 2

3 Financial & Private Sector Development 3 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

4 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 4

5 Financial & Private Sector Development 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 5

6 Financial & Private Sector Development Percentage of countries with at least one positive reform in 2009/10 84% 61% 63% 75% 59% 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 improvements in regulations making business easier: 216 in 117 economies 6 47%

7 Financial & Private Sector Development 7 Poland improved by 3 positions from 73 in DB10 (as back-calculated) to 70 in DB11 ranking Poland 37 European Union (average rank): Austria, Belgium, Bulgaria, Cyprus, Czech republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, The Netherlands, Poland, Portugal, Romania, Slovak republic, Slovenia, Spain, Sweden, United Kingdom (excluding Malta) 7 70 Baltic states (average rank): Estonia, Latvia, Lithuania 21

8 Financial & Private Sector Development Poland is among the EU economies that improved the most their business regulation over the past 5 years

9 Financial & Private Sector Development Poland’s ranking relative to other economies in the European Union 9 Easier to do businessMore difficult to do business

10 Financial & Private Sector Development In comparison to the European Union 26 country average, Poland ranks lower in 7 out of 9 indicators Lowest 183 Highest 1 10

11 Financial & Private Sector Development Poland’s performance varies by topic Topic Poland DB 2011 (2010) Top ranked (OECD* and Global) Overall rank 70 (73) +New Zealand; Singapore Starting a business113 (117) +New Zealand Dealing with construction permits164 (164) 0Denmark; Hong Kong (China) Registering property86 (88) +New Zealand; Saudi Arabia Getting credit 15 (15) 0United Kingdom; Malaysia Protecting investors 44 (41) -New Zealand Paying taxes121 (151) +Ireland; Maldives Trading across borders49 (42) -Finland; Singapore Enforcing contracts77 (75) -Luxembourg Closing a business81 (85) +Japan

12 Financial & Private Sector Development The reform agenda Recommendations from the World Bank’s Reform Memorandum 2010

13 Financial & Private Sector Development Construction permits - building a warehouse is a lengthy and cumbersome process in Poland It takes over 10 months… … and 32 procedures to build a warehouse

14 Financial & Private Sector Development Recommendations to improve the construction permitting process Shorten and enforce statutory approval limits when processing construction and occupancy permits Streamline procedures to issue construction permits using delegation and notification Pro-actively use the risk-based approach when processing applications for construction and occupancy permits Rationalize and consolidate post-completion inspections Cautiously use “silence is consent” principle in construction

15 Financial & Private Sector Development Starting a business in Poland is lengthy and costly Cost to start a business (% GNI per capita) Time to start a business (days)

16 Financial & Private Sector Development Recommendations to improve starting a business Short–term reform recommendations: Unify all numbers into one universal identification number and issue it by the Registration Court; connect all public databases Make available standard company agreements with the option of drafting and notarizing custom made company agreements, and empower officials to verify signatures Eliminate separate registrations for National Sanitary Inspection and National Work Inspection; combine registration for VAT at the National Court Register Eliminate the minimum capital requirement

17 Financial & Private Sector Development Number of tax payments per year Time to pay taxes (hours) In paying taxes, numerous payments, complex laws and procedures are main cause of low rank 17

18 Financial & Private Sector Development Recommendations: Implementing electronic filing of returns  Make electronic filing mandatory for all corporate entities and medium to large businesses (say, with turnover over Euro 1 million)  Digital signatures costly for small firms – make use of tax intermediaries legal  Simplify forms further, making them better suited to e-filing  Provide more user-friendly software  Popularize electronic filing through targeted communications campaigns 18

19 Financial & Private Sector Development Enforcing contracts and closing a business is lengthy Time to enforce a contract (days) Time to close a business (years)

20 Financial & Private Sector Development Reforms to improve contract enforcement and closing a business  Conduct a procedural mapping of internal processes at the commercial and insolvency courts; review courts around Poland and share best practices to improve efficiency  Introduce computerized case management system  Strengthen court management and improve measurement of the performance of courts and individual judges  Reduce inflow of cases through out-of-court arbitration and workouts

21 Financial & Private Sector Development Thank you. For more information: 21

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