Briefing | It's easy to start a business in Jamaica!
How did Jamaica perform this year?
Jamaica currently ranks 64th in the World Doing Business Report 2016, little worse than its rank of 58th in 2015, although coming from as low as ranking 94th in 2014. Jamaica continues to perform well on the books as it relates to starting a business and getting credit; ranked 9th in the world for ease of starting business and 7th in the world for ease of getting credit. The former is of no surprise as we all know it is very easy to start a business in Jamaica.
The ranking of seventh out of 189 in terms of access to credit is really calculated on the premise that certain features that facilitate lending exist within the applicable collateral and bankruptcy laws. It also encompasses the coverage, scope and accessibility of credit information available through credit reporting service providers, for example, credit bureaus or credit registries. The ease of getting credit has been amplified by legislation put in place to use small items and livestock as collateral for loans. The legal rights of borrowers and lenders are also taken into consideration.
Where did Jamaica improve?
Jamaica has improved once more in four main areas: starting a business, dealing with construction permits, paying taxes, and resolving insolvency. Jamaica has made starting a business easier by streamlining internal procedures. Jamaica is ranked 72nd in terms of dealing with construction permits. The country has made dealing with construction permits easier by implementing a new work flow for processing building permit applications. The country is ranked 146 in terms of paying taxes. It has improved by making paying taxes less costly for businesses by encouraging taxpayers to pay their taxes online.
Jamaica also introduced an employment tax credit and increasing the depreciation rate of industrial businesses. At the same time, Jamaica has introduced a minimum business tax, increased the contribution rate for the National Insurance Scheme paid by employers and increased the rate of stamp duty, property tax, property transfer tax and education tax. Jamaica is ranked 35th as it relates to resolving insolvency. This was made possible by introducing a reorganisation procedure, introducing provisions to ensure the continuation of debtors business during insolvency proceedings, allowing creditors greater participation in the proceedings, and establishing a public office responsible for the general administration of industry proceedings.
What about the other indicators?
Jamaica ranks 80th in terms of getting electricity, 122nd in terms of registering property, 57th in terms of protecting minority investors and 146 in terms trading across borders. This, along with paying taxes, has been the nation's major handicaps. To export, it requires 62 hours to complete the relevant documents and 82 hours to deal with border compliance, and three hours for domestic transport. As it relates to import, it requires 87 hours to fill out the documents, 106 hours to deal with border compliance and three hours for domestic transport.
What is the Doing Business Report?
Every year the World Bank's Doing Business Report summarises data on some key elements necessary for a country to effectively conduct business. The report assesses the regulative framework in a country that enhanced doing business against those that restrict the smooth flow of businesses. The Doing Business Report presents quantitative indicators on doing business and the protection of property rights across 189 countries and ranks them accordingly.
The 2016 Doing Business Report compares the business regulations for domestic firms in 189 economies. The report has highlighted that the top-performing countries as it relates to ease of doing business are not those with little regulation, but are those with good laws that allow the efficient and transparent functioning of business and markets while protecting the public interest.
What changes have been made this year?
For 2016, the Doing Business Report has been some adjustments to the variables it takes into consideration. It continues to measure regulations related to starting a business, all formalities to build a warehouse, getting electricity, transfer property, collateral laws and credit information, minority shareholder rights in related party transactions and in corporate governance, tax compliance, enforcing contracts and resolving insolvency. The 2016 Doing Business Report has made some adjustments compared to the 2015 report. The quality of building regulation and its implementation, reliability of electricity supply, transparency of tariffs and price of electricity and the quality of the land and administration system, the quality of the judicial process.