A helpful exercise in quantifying business regulations and their costs
Serbia does not often come top of global economic league tables. But according to the World Bank's latest report on “Doing Business” around the globe, the country slashed more red tape last year than any of the 154 other countries in the study. This January, Serbian entrepreneurs needed 15 days and a deposit of €500 ($650) to start a business, compared with 51 days and €5,000 a year earlier. Taxes are now easier to pay, debts easier to collect and temporary workers easier to hire. As a result, start-ups have boomed: the number of registered firms leapt by 42% in 2004.
Starting a business is always a “leap of faith,” the report says. But that faith is needlessly tested by misguided regulations. In Laos, it takes 198 days to start a business, and not because the queue of budding entrepreneurs is terribly long. In Sierra Leone, a firm foolish enough to pay its taxes in full would have to part with 164% of its gross profits—ie, everything it earns and more.
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