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Doing business easier in Rwanda than in Spain

Alex Dunham · 29 Oct 2013, 13:19

Published: 29 Oct 2013 13:19 GMT+01:00

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Spain dropped eight places in the overall rankings of the World Bank’s annual ‘Doing Business’ study, meaning the country governed by Mariano Rajoy now stands at number 52.

Critics have good reason to be negative about the business climate in Spain in 2014, as the World Bank downgraded the Iberian nation in seven of the nine categories of evaluation compared to last year’s rankings.

These include resolving insolvency (-2), enforcing contracts (-1), protecting investors (3), getting credit (-3), registering property (-4), dealing with property (-7), starting a business (-6) and paying taxes (-34).

Perhaps the latter two categories will prove the most worrying for businessmen and investors alike.

Spain’s IVA (VAT) has gone up to 21 percent and top marginal tax rates have risen from 44 to 52 percent.

And although it now takes 23 days to set up a business in Spain compared to 28 last year, red tape is still to blame for the county’s feeble positioning in the “ease of doing business” category.

Spain now lags behind developing economies like those of Rwanda, Zambia, South Sudan, Kazakhstan and Uzbekistan in terms of how easy it is to start up a business.

The World Bank’s report did however praise Spain for exempting small and medium-size enterprises from the burdensome Asset Transfer and Legal Documented Acts Tax.

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As for the top scorers, Singapore, Hong Kong and New Zealand took the top three spots followed by the US and Denmark.

The Ukraine, Rwanda, Russia and the Philippines registered the biggest economic improvements in the last 12 months.  

The World Bank/IFC Doing Business Report looks at how easy it is to do business in any given country by taking into account 11 factors including dealing with construction permits, getting credit and enforcing contracts, among others. The ease of both opening and closing businesses is also in the mix.

Alex Dunham (alex.dunham@thelocal.com)

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