Malta re­mains the most dif­fi­cult place in the EU to do busi­ness

Malta Independent - - FRONT PAGE - David Lind­say

Malta re­mains the most dif­fi­cult place to do busi­ness in the whole of the Euro­pean Union, ac­cord­ing to the World Bank’s Ease of Do­ing Busi­ness rank­ings that were re­leased on Tues­day.

On a global level Malta climbed slightly in this year’s World Bank as­sess­ment, by four spots from 80th place last year to 76th in this year’s report, but it was bet­tered by ev­ery sin­gle other EU mem­ber state in the widely cited and re- spected an­nual sur­vey. The se­cond-worst EU coun­try in which to do busi­ness is Greece, which, in 61st place, came in a whole 15 spots higher than Malta.

The an­nual report, this year sub­ti­tled ‘Equal Op­por­tu­nity for All’, lists out the pros and cons of do­ing busi­ness in 190 coun­tries across the globe.

The main sore points about do­ing busi­ness in Malta, ac­cord­ing to the World Bank’s au­thor­i­ta­tive study, re­main in the ar­eas of Reg­is­ter­ing prop­erty (147th), get­ting credit (139th) start­ing a busi­ness (132nd), re­solv­ing in­sol­vency (84th), deal­ing with con­struc­tion per­mits (82nd) and get­ting elec­tric­ity (77th).

Malta per­formed some­what bet­ter in the ar­eas of en­forc­ing con­tracts (58th), trad­ing across bor­ders (40th), pay­ing taxes (33rd), and pro­tect­ing mi­nor­ity in­vestors (32nd).

There has been some marked progress, how­ever, with Malta hav­ing climbed from its pre­vi­ous global 102nd spot when it de- buted in the in­dex back in 2012, to to­day’s 76th plac­ing, but it still re­mains in the EU’s bot­tom spot.

Over the last year, Malta has also made some progress this year to­ward cor­rect­ing the ease of do­ing busi­ness deficit. As the World Bank report notes, the coun­try made some im­prove­ments in the ar­eas of start­ing a busi­ness and of get­ting credit. As far as the for­mer is con­cerned, the World Bank notes that Malta this

year made start­ing a busi­ness eas­ier by of­fer­ing au­to­matic reg­is­tra­tion with the In­land Rev­enue Depart­ment fol­low­ing the re­ceipt of the com­pany reg­is­tra­tion num­ber. And as for the lat­ter, the World Bank notes that Malta im­proved ac­cess to credit in­for­ma­tion by launch­ing a new credit registry.

One ma­jor sore point for busi­nesses, as pointed out by the World Bank, was that, “Malta made pay­ing taxes more costly by re­plac­ing the cap­i­tal gains tax with a prop­erty trans­fer tax, and in­creas­ing the max­i­mum so­cial se­cu­rity con­tri­bu­tion paid by em­ploy­ers.”

Last June all gov­ern­ment de­part­ments signed an agree­ment pledg­ing to make it eas­ier for in­vestors to start a busi­ness in Malta.

At the time Dr Mus­cat said, “I was shocked when I saw Malta’s rank­ing in the Ease of Do­ing Busi­ness In­dex and knew that I had to ad­dress the is­sue im­me­di­ately.”

The com­mit­ment signed by rep­re­sen­ta­tives of gov­ern­ment de­part­ments and en­ti­ties repre- sents a col­lec­tion of dead­lines and meth­ods with the fi­nal aim of re­duc­ing bu­reau­cracy and in­creas­ing ac­count­abil­ity.

Over­all, New Zealand, Sin­ga­pore, Den­mark, Hong Kong and South Korea led this year’s rank­ings.

Be­tween June 2015 and June 2016, the report, which mea­sures 190 economies world­wide, doc­u­mented 283 busi­ness re­forms. Re­forms re­duc­ing the com­plex­ity and cost of reg­u­la­tory pro­cesses in the area of start­ing a busi­ness were the most com­mon in 2015/16, as in the pre­vi­ous year. The next most com­mon re­forms were in the ar­eas of pay­ing taxes, get­ting credit and trad­ing across bor­ders.

Brunei Darus­salam, Kaza­khstan, Kenya, Be­larus, In­done- sia, Ser­bia, Ge­or­gia, Pak­istan, the United Arab Emi­rates, and Bahrain were the most im­proved economies in 2015/16 in ar­eas tracked. To­gether, th­ese 10 top im­provers im­ple­mented 48 reg­u­la­tory re­forms mak­ing it eas­ier to do busi­ness.

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