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Thursday, 10th November 2016
The latest World Bank Doing Business report contains a major surprise with Singapore knocked off the top spot by New Zealand. But with the country showing an improved performance in four key areas, what is the explanation for Singapore’s lower ranking?
Having topped the rankings for over a decade, the 2017 World Bank Doing Business report appears, at first glance, to be bad news for Singapore, with New Zealand knocking the country into second place among the world’s most business-friendly jurisdictions. Closer inspection, however, suggests that this year’s rankings might be the result of changes to World Bank methodology rather than a reflection on the country’s regulatory environment.
Now in its 14th year, the World Bank Doing Business report assesses regulations affecting domestic firms in 190 economies, ranking each on the basis of 11 criteria impacting the ease of doing business in any jurisdiction. Russell Bedford member firms have contributed to the report’s Paying Taxes survey since 2009, collating data on tax regulation, recent reforms and the comparative compliance burdens on entrepreneurs and businesses worldwide.
The newly-published report, Doing Business 2017: Equal Opportunity for All, makes clear that “Last year’s rankings are adjusted … and reflect data corrections.” The Bank’s adjusted figures, in fact, see Singapore’s overall ranking for 2016 downgraded to 3rd place: on which basis, its second-place ranking for 2017 would indicate an improved business environment, rather than the reverse. The country also shows an improved performance in four key areas – indicating an improved business environment for starting a business, dealing with construction permits, registering property, and paying taxes. The country also retains its first-place ranking for protecting the interests of minority investors, and its second-place ranking for contract enforcement, as well as remaining one of the world’s top-10 tax-friendly destinations, up one place from ninth to eighth.
Steven Tan, managing partner of Russell Bedford member firm Steven Tan Russell Bedford PAC commented: “The 2017 rankings have, inevitably, attracted attention. But closer inspection makes clear that Singapore has retained its market-leading performance in those areas of most immediate interest to investors – in protecting shareholders’ interests, enforcing contracts, and maintaining a tax-friendly business environment.”