Mozambique and Sao Tome rise in list of best countries to do business

3 October 2007

Washington, USA, 3 Oct – Mozambique and Sao Tome rose in the 2008 edition of the list of the best countries in which to do business drawn up by the World Bank, while Portugal and Brazil continued to be the best-ranked Portuguese-speaking countries.

In the list of 178 countries whose business climate was evaluated, particularly focusing on legislation and regulation, in the Doing Business 2008 report, Portugal is ranked 37th, three positions higher than its 2007 ranking and eight above its position in 2006.

Amongst the Portuguese-speaking countries Brazil is next (122nd), Cape Verde (132nd), but it was Mozambique, which moved up six places, which deserved greatest praise from the World Bank.

Together with Madagascar and Mauritius, Mozambique “took leadership” In carrying out reforms to the legislative and regulatory framework that influences the business climate,” said the World Bank.

The report particularly values reforms carried out over the last year in the areas of business start-ups, investor protection and contractual obligations, three of the ten factors that weigh on the final assessment.

Mozambique, the report said, “introduced a new commercial code, which replaced legislation dated from 1888, implemented modern corporate governance rules and strengthened the rights and responsibilities of minority shareholders, as well as better marking out the responsibilities of directors.”

“This new commercial code also modernized the process for registering businesses, eliminating provisional registration and making the use of notaries optional,” as well as introducing an electronic format, which made it possible to reduce the time needed to set up a business to three months.

“However,” the authors of the report noted, “not all changes were positive.” the minimum amount of capital required [to open a business in Mozambique] was increased ten-fold.”

Amongst the aspects considered, the best in Mozambique, according to the World Bank, remained payment of taxes (33rd) and cross-border trade (72nd); and the worst was its labor system (162nd).

Portugal is the Portuguese-speaking country most mentioned for the successful application of reforms (four – investor protection, closure of businesses, registration of property and payment of taxes).

The World Bank focused on the Portuguese case, amongst OECD members, noting the reduction of average times in registering property (from 81 to 42 days) and taxes, such as those on business representation expenses and on equipment such as computers.

Brazil was mentioned as a positive case amongst Latin American countries, particularly due to the introduction of reforms in cross-border trade and contractual obligations.

In Brazil the report said, “debtors are now forced to cooperate to identify their assets for seizure and can be fined if they do not cooperate.” Thanks to changes to the Civil Process Code, as well as the introduction of mechanisms that speed up processes, such as the possibility of presenting documents in electronic format.

The World Blank also highlighted the reforms introduced in Guinea Bissau (176th), which made it possible to “reduce the cost of property registration, lowering the tax on registration or transferal,” measures “driven by the wish to fulfil eligibility conditions of the Millennium Challenge Corporation,” the US developmental support mechanism.

East Timor, which rose six places against its previous ranking (168th), was mentioned due to its introduction of reforms in creating businesses that “eliminated the need for approval by the Minister for Territorial Administration,” which resulted in a 10-day improvement in this indicator.

As well as Mozambique and East Timor, Sao Tome and Principe also rose six places in the ranking to 163rd.

Cape Verde remained stable and Angola’s position fell, as was the case in previous years, but this year fell further – 11 places – to 167th place, and came closer to the end of the business climate ranking, despite the strong growth recorded by the economy and foreign investment. (macauhub)