Thailand’s 2015 ranking in the ease of doing business index by the World Bank has gone up from 28 to 26, thanks to an easing of restrictions by the government.
Neighbours Singapore topped the list, with New Zealand, Hong Kong and South Korea rounding out the top four in the World Bank Group’s International Finance Corporation (IFC) Doing Business 2015 report released today.
Malaysia was fourth in Asia ahead of Taiwan at no. 19 and Thailand at no. 26.
Mr. Ulrich Zachau, the Bangkok based World Bank Country Director for South East Asia, said that Thailand’s ranking in the 2015 ease of doing business index now goes up to 26th from last year’s 28th position.
“The data show that many economies in the region made it easier for businesses to pay taxes in the past year,” the bank said, citing several examples other than Thailand.
“Vietnam reduced the corporate income tax rate. China enhanced its electronic filing and payment system – while also making business incorporation less expensive. Mongolia introduced a new electronic payment system. Such reforms are saving entrepreneurs valuable time.”
Malaysia, in particular, showed the most progress in the important “distance to frontier” scale, that shows how close each economy is to global best practices in business regulation, the bank said.
In Mongolia, for example, local businesses saw the average time for tax compliance fall from 192 hours a year in 2013 to 148 hours—less than in Austria.
“Since 2005, the East Asia and the Pacific region has narrowed the gap with global good practices,” said Rita Ramalho, Doing Business report lead author, World Bank Group.
“Consistent regulatory reforms have improved the ease of doing business in the region in the past decade, and contributed to more business opportunities for local entrepreneurs.”
This index is determined as a one year prediction and involves 189 countries world wide. The index for 2015 was announced via teleconference from the World Bank in Washington DC.
The main reason for the improvement is the priority the government is giving to service improvements, such as construction permission for which the Bangkok Metropolitan Administration is the responsible agency but which has now authorised district offices to grant approvals where the proposed construction is not taller than 8 storeys.
In addition the Department of Business Development’s cross-district partnership and company establishment registration, allows the registration to be done at any office of the department.
What do entrepreneurs need to pursue a great idea?
First of all, they need the ability to give legal form to the idea— that is, to start a business—simply, quickly and inexpensively and with the certainty of limited liability.
In addition, they will need to hire people to help realize the idea, will probably need to obtain financing (both equity and credit) and, in today’s increasingly interdependent global
economy, may in many cases need a simple way to import and export. And they will need a straightforward way to pay their taxes.
The Thai government also has a policy of attracting foreign business interests to invest in Thailand, with special offers such as a reduction in the property transfer fee from 2 percent to 0.01 percent, and a reduction in the rate of Corporate Income Tax from 30% to 20%.
However, Thailand still has to make improvements in other services such as access to loan credit , solutions to bankruptcy issues, and investor protection. These are mainly related to laws that obstruct investment and could be amended.
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Doing Business 2015: Going Beyond Efficiency, a World Bank Group flagship publication, is the 12th in a series of annual reports measuring the regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies—from Afghanistan to Zimbabwe—and over time.
Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking.