As the country readies to announce Investment Year 2012, Nepal's rank improved by three places to 107 reversing the earlier trend in Doing Business 2012 report launched today by the World Bank and IFC.
Improved ranking in the annual report is a good signal to investors that Nepal is creating a better environment for entrepreneurs.
The improvement is attributed to improved oversight and monitoring in the legal system, and speeding up the process for filing claims by investors that has strengthened enforcement of contracts.
The rankings in indicators like registering property, getting credit, paying taxes, and trading across borders have improved, whereas rankings fell in starting a business, dealing with construction permits, protecting investors, and resolving insolvency.
On getting electricity – the newest indicator – the country is ranked 99.However, there is significant scope for further significant improvements in selected Doing Business indicators like starting a business, dealing with construction permits, paying taxes, and trading across borders, which can help build investors' confidence on Nepal for Investment Year 2012.
'Doing Business 2012: Doing Business in a More Transparent World' assessed regulations affecting domestic firms in 183 economies and ranked the economies in 10 areas of business regulation like starting a business, resolving insolvency and trading across borders.
Among South Asian countries, Nepal ranked fourth. In South Asia, Bangladesh’s rank fell from 118 to 122, and Maldives’s rank fell from 78 to 79. However, the ranks of Bhutan (146 to 142), India (139 to 132) and Sri Lanka (98 to 89) improved.
New data revealed that improving access to information on business regulations can aid entrepreneurs. In five of South Asia’s economies, traders have access to relevant documentation requirements online or through public notices. Meanwhile, fee schedules for electricity connections are easily accessible in three economies.
"South Asian economies have an opportunity to increase access to information for entrepreneurs,” said lead author of the report Sylvia Solf, "One route is new technology, which is increasingly used by governments to provide electronic services for filing taxes or registering businesses. It not only enhances efficiency but opens opportunities to increase transparency.
"Similarly, among Low Income Countries (LICs) Nepal is ranked third.
This year, the ease of doing business ranking has expanded to include indicators on getting electricity. Over the past six years, all eight economies in South Asia have made their regulatory environment more business-friendly.
"Entrepreneurs in developing economies have a vital role in creating economic opportunities,” said director at the Global Indicators and Analysis, World Bank Group Augusto Lopez-Claros. "South Asia’s governments have empowered entrepreneurs by implementing regulations that are efficient, accessible, and sustainable, and they should continue to seek avenues for improvement."
Doing Business analysed regulations that apply to an economy’s businesses during their life cycle, including start-up and operations, trading across borders, paying taxes, and resolving insolvency. The aggregate ease of doing business rankings are based on 10 indicators and cover 183 economies.
Meanwhile, previous year’s rankings are back-calculated to account for the addition of new indicators, data corrections, and methodology changes in existing indicators so as to provide a meaningful comparison with the new rankings. Otherwise Nepal was ranked at 116 in Doing Business 2011 from ayear ago's 112 rank.
Doing Business does not measure all aspects of the business environment that matter to firms and investors like it does not measure security, macroeconomic stability, corruption, the level of skills, or the strength of financial systems.
South Asian Ranking
2. Sri Lanka
2. Hong Kong
3. New Zealand
4. United States
7. United Kingdom
8. South Korea
Low Income Countries (LICs) Ranking
2. Kyrgyz Republic