Doing Business in South East Europe 2008
Doing Business in South East Europe 2008 compares business regulations across seven economies (Albania, Bosnia and Herzegovina, Croatia, Kosovo*, the former Yugoslav Republic of Macedonia, Montenegro, and Serbia) in four key areas: starting a business, dealing with licenses, registering property, and enforcing contracts. The study provides comparable data for 22 cities that can inspire reforms at the national and local level and add to the reform momentum of the region. The report shows that differences in local-level regulations and practices or in the implementation of national-level regulations can enhance or constrain local business activity. Overall, Bitola (Macedonia, FYR) is the easiest city to engage in business (see Table 1).
The report suggests that cities in South East Europe can learn from each other and adopt good practices that are already working in the region for rapid improvement in competitiveness. If one city were to adopt all the best existing practices in South East Europe (see Table 2), it would rank 9th among the 178 economies measured by Doing Business, similar to Ireland and Canada.
Main findings:
- In starting a business, the region has a number of good practices. Vlora’s (Albania) fast and simple business registration process is comparable to the world’s top-25 performers on this indicator. Yet, these practices are not consistent throughout the region. The time it takes to register a business ranges from seven days in Vlora and Shkodra (Albania) to 61 days in Mostar (Bosnia and Herzegovina). The cost differences are even more pronounced, from as low as 3.9% of income per capita in Bitola (Macedonia, FYR) to 79.4% in Prizren (Kosovo).
- Construction licenses are costly throughout South East Europe, averaging 1427% of income per capita -- higher than in most regions of the world and in many new European Union member countries. Local-level requirements drive the differences in the procedures to obtain construction-related authorizations. It is easiest in Osijek, with 13 procedures, and most cumbersome in Zagreb, with 24 procedures, both Croatian cities.
- Despite a similar regulatory framework for property registration across the region, the time, cost, and number of procedures vary due to local administrative practices and taxes (see Table 3). People from the seven economies covered in the report spend four times longer than Slovenians or Bulgarians and pay six times more than entrepreneurs in Poland to transfer a property title. Kosovo is the least expensive economy with regards to the cost to register property -- 0.8% of property value in Prizren and 0.9% in Pristina. This is due mainly to a fixed-fee property transaction tax.
- The region is marked by lengthy contract enforcement processes. Delays are due to case backlog and an insufficient number of judges. But cities do not need to look beyond the region for best practices. The most efficient city is Zrenjanin (Serbia); at 300 days, the process is the same as in the United States and faster than in Denmark.
 |
 |
 |
Doing Business in South East Europe (