Business Reforms in South Asia

Afghanistan

DB 2012:

Afghanistan made getting electricity easier by improving the efficiency of the electricity department in Kabul and introducing a new fee schedule for connections.

DB 2010:

Business start-ups were simplified by taking company registration out of the commercial courts and establishing a new company registry that acts as a one-stop shop combining company registration, tax registration, and publication in the official gazette, and charges a flat registration fee

The government eased property registration by cutting the property transfer tax by 3 percent of property value.

Access to credit was strengthened with a new law on secured transactions that broadens the scope of assets that can be used as collateral—including future assets—and allows a general description of debts and obligations. The new law also allows out- of-court enforcement.

DB 2008:

Through a change in format of the required "circular form", entrepreneurs are required to obtain fewer approvals from various government agencies and procedural steps to transfer property have decreased. In addition, some district courts' title deeds storages are being digitalized.

Bangladesh

DB 2012:

Bangladesh made getting electricity more difficult by imposing a moratorium on new electricity connections from April 2010 to March 2011 because of an electricity supply shortage. This moratorium has led to long delays for customers and has increased the time to obtain an electricity connection.

DB 2011:

Bangladesh made business start-up easier by eliminating the requirement to buy adhesive stamps and further enhancing the online registration system.

Bangladesh reduced the property transfer tax to 6.7% of the property value.

DB 2010:

Business start-up was simplified by launching online business name clearance and registration, shortening start-up time by 29 days.

The corporate income tax rate was cut from 40 percent to 37.5 percent, while increasing the capital gains tax rate from 5 percent to 15 percent.

Automation of customs clearance at the Chittagong port has shortened the time required to clear goods.

DB 2009:

Starting a business has become easier. Bangladesh made involving lawyers in company registration optional. That eliminated one procedure and reduced the cost by $100.

The time needed to register property was cut by almost half through reforms at the Municipal Deed Registry Office.

Bhutan

DB 2012:

Bhutan eased the process of starting a business by making its criminal records search electronic and making the rubber company stamps available on the local market.

Bhutan improved its credit information system by launching the operation of a public credit registry.

DB 2009:

Enforcing contracts was made easier by creating a Land Commission to handle cases involving the transfer of property. Because a large number of land disputes had been ending up in court, setting up the new commission took about 30 percent of all cases out of the district courts. As a result, the total time required to enforce a contract through the courts was reduced.

DB 2008:

For entrepreneurs it was made easier to start limited liability trading companies by eliminating two procedures--name approval and location clearance--and increasing efficiency at the Registrar of Companies. The time to start operating a business in Thimphu decreased.

The National Assembly endorsed the Land Bill of Bhutan 2007 on June 27, 2007. Among other provisions that affect everything from surveys to government rights to land in the name of public interest, the Act states that a National Land Commission will be established and become the highest decision-making authority on land matters in Bhutan . The establishment of the Commission will eventually take land transactions out of the courts, thereby freeing up judges' time to deal with judicial matters, and speeding up both the process to transfer land and the time to solve civil disputes.

India

DB 2012:

India eased the administrative burden of paying taxes for firms by introducing mandatory electronic filing and payment for value added tax.

DB 2011:

India eased business start-up by establishing an online VAT registration system and replacing the physical stamp previously required with an online version.

India reduced the administrative burden of paying taxes by abolishing the fringe benefit tax and improving electronic payment.

DB 2010:

Procedures under the 2002 Securitization Act have become more effective, easing the process and reducing the time required to close a business.

DB 2009:

An electronic data interchange (EDI) was implemented, allowing exporters to submit documents to customs online. The EDI system also enables customs to automatically assess export documents, making customs clearance more efficient. The new system reduced the time needed to export.

DB 2008:

An electronic registry was introduced that covers the rights granted by companies. The registry can be searched by name of debtor, and is linked geographically to cover the whole country. The private credit bureau has incorporated firms to its database and now provides credit information on corporate entities.

Through introduction of an Electronic Data Interchange (EDI) system, customs declarations are now carried out through the internet. This system has also allowed the operation of a Risk Management System (RMS), an E-manifest system, and an E-payment system which facilitated the decrease in import time by 7 days.

Maldives

DB 2011:

Maldives now allows registered companies to own land as long as all company shares are owned by Maldivians.

Nepal

DB 2012:

Nepal improved oversight and monitoring in the court, speeding up the process for filing claims.

DB 2010:

The Finance Act 2008 has reduced the fee for transferring a property from 6.0 percent to 4.5 percent of the property’s value.

Pakistan

DB 2012:

Pakistan increased the profit tax rate for small firms.

DB 2011:

Pakistan made registering property more expensive by doubling the capital value tax to 4%.

Pakistan reduced the time to export by improving electronic communication between the Karachi Port authorities and the private terminals, which have also boosted efficiency by introducing new equipment.

DB 2010:

Business start-up was simplified by introducing a system that allows online registration for sales tax and removing the requirement to make a declaration of compliance on a stamped paper. These moves removed four days and one procedure and halved the cost of the business start-up process.

DB 2008:

In July 2006, the Sindh (province) Finance Act was issued that caused the stamp duty to decrease from 3% to 2% of property value. Karachi is located in Sindh province and therefore the new rate applies to our case. However, the positive impact of the reform was overcome by the reinstatement of the Capital Value Tax of 2% at the national level by the Finance Act 2006, causing a net increase of 1% property value in the total cost to transfer this year.

The private credit bureau has expanded the scope of information distributed to include positive as well as negative credit information. In addition to late payments and defaults information, the original and outstanding loan amounts are now distributed to lenders as well. Pakistan 's public credit registry eliminated its loan threshold of 500,000 Pakistan rupees ($8,350), boosting coverage by 20 times.

Sri Lanka

DB 2012:

Sri Lanka strengthened investor protections by requiring greater corporate disclosure in case of transactions between interested parties.

Sri Lanka made paying taxes less costly for businesses by abolishing the turnover tax and social security contribution and by reducing corporate income tax, value added tax and national building tax rates.

DB 2010:

The government made getting construction permits more difficult by increasing fees and adding a procedure.

Access to credit information was strengthened with a new system consolidation process at the private credit bureau, allowing credit data to be submitted by all shareholder lending institutions without any reporting threshold. The volume of registry data has grown 10-fold relative to the same period in 2007.

DB 2009:

The legal rights of creditors were strengthened by enforcing the new Companies Act. When a company goes into liquidation, the claims of its secured creditors are no longer frozen. Secured creditors now have the right during liquidation to seize or attach their collateral or appoint a receiver. Sri Lanka also implemented an online system for uploading credit information. Now the Credit Information Bureau (CRIB) can collect data on all loans extended by its members. The minimum threshold for the loans recorded was eliminated and data can be maintained over a longer period.

DB 2008:

A new companies act eliminated burdensome approvals and introduced a flat registration fee. Company seals and notaries were made optional. Procedures and the time for start-up decreased.

The credit bureau restricted the availability of information on repaid defaults to only 1 year, while defaults settled through the courts are kept for 3 years.

An electronic submission of customs declarations was introduced, cutting time for trading.