Briefing | Doing business in Jamaica is still a challenge
Which Caribbean or Latin American country is the best to do business?
The global business environment is always evolving, some countries for the better and others for the worse. Nevertheless, it is essential to track and understand how countries improve their doing-business climate to make life easier for investors and entrepreneurs. Last week, we looked at Jamaica's performance on the World Economic Forum's Global Competitiveness Report. This week, we will look at Jamaica's performance in the World Bank's World Doing Business Report 2017. Jamaica's ranking has fallen two places from 65th in 2016 to 67th in 2017. Although the country's index value has increased from 66.73 in 2016 to 67.54 in 2017, it is indicating that other countries are improving their doing-business climate at a faster pace than Jamaica.
How easy it is to
start a business?
Normally, Jamaica would rank in the top 10 for starting a business. For 2017, it has fallen six places to 12th. The country is ranked ahead of the average for the Caribbean and Latin American countries. In Jamaica, it requires two procedures and 10 days to start a business, while it requires 8.3 procedures and more than 30 days to start a business on average in the Caribbean and Latin America. As it relates to dealing with construction permits, Jamaica moved down four places from 71st to 75th. It requires 17 procedures in Jamaica to deal with construction permits, while only 14 procedures are required across the rest of the Caribbean and Latin America. The time taken is, however, better in Jamaica than the rest of the Caribbean and Latin America as it requires 130 days to do so in Jamaica, compared to 181 days for the rest of the Caribbean and Latin America. As it relates to getting electricity, Jamaica has fallen 20 places from 81 to 101. It requires seven procedures and 95 days in Jamaica relative to just 5.5 procedures and 66 days on average in the other Caribbean and Latin American countries.
How easy is it to register property and get credit?
Jamaica has fallen as well in terms of registering property from 120th place to 223rd in the world for 2017, but requires less time than the other Caribbean and Latin American countries. It takes eight procedures and 18 days to register property in Jamaica, relative to seven procedures and 69 days in the rest of the Caribbean and Latin America. Jamaica has fallen two places from 14th to 16th in terms of getting credit although it is outperforming the Caribbean and Latin America in the depth of the credit information index; seven compared to 4.8 on average in the rest of the Caribbean and Latin America, while the Credit Bureau covers 23.3 per cent of adults in Jamaica compared to 41.2 per cent of adults in the Caribbean and Latin America. In terms of protecting minority investors, Jamaica has fallen from 62nd to 63rd in the world, but is ranked better than the average for the Caribbean and Latin America here.
Where did Jamaica improve?
Jamaica has improved in terms of paying taxes and trading across borders. The country has improved significantly by 39 places from 155 to 116 places as it relates to paying taxes. It requires 11 payment procedures that can be done in 268 hours with a total tax rate on profits of 35 per cent relative to 29 payments, taking 342 hours and total tax rate 46.3 per cent on profits in the Caribbean and Latin America. Jamaica also improved two places as it relates to trading across borders. It requires 58 border-control hours and costs US$876 to export goods from Jamaica, compared to 63
border-control hours and US$527 from the rest of the Caribbean and Latin America. It requires 80 border-control hours and costs US$906 to import goods to Jamaica compared to 65 border-control hours and US$685 to import goods to the other Caribbean and Latin American countries.
What about contracts?
As it relates to enforcing contracts, Jamaica fell three places from 114 to 117. It requires 550 days and costs approximately 46 per cent of the total claim compared to 749 days and a cost of 31.3 per cent of the claim in the other Caribbean and Latin American countries. To resolve insolvency, Jamaica has fallen two places from 36 to 38. The recovery rate is 64 per cent, costs 18 per cent of the estate, and can be completed in 1.1 year in Jamaica, compared to a recovery rate of 31 per cent, cost 14.5 per cent of the value of the estate and can be completed in 2.4 years in the rest of the Caribbean and Latin America.