ease of doing business 2019 - economy.ge€¦ · ease of doing business 2019 georgia’sremarkable...

Ministry of Economy and Sustainable Development of Georgia

2019

Ease of Doing Business 2019

Georgia’s Ranking In 2012 – 2019


Georgia’s Ranking Compared to Other Countries

GEORGIA’S RANKING 2019

In 2019 - 6th place amongst 190 countries

Overall distance to frontier (DTF) – 83.28 score

(improvement by 0.48 points)

THE CYCLE OF REFORMS FOR GEORGIA

The Top Improver since 2003 in EE&CA and

globally - With 50 institutional and regulatory

reforms.

Georgia’s remarkable achievement in Doing

Business 2019 is stipulated with the effective

policy of the Government

Georgia maintains reformatory country status due to

the implemented reforms throughout the past years.

Georgia has implemented reforms in three areas

that were recognized by Doing Business 2019:

Starting a Business

Paying Taxes

Enforcing Contracts

129

14

24 23

16

96

2012 2013 2014 2015 2016 2017 2018 2019

7147

4342

4135

3125

2422

1916

1412

108

76

32

1

UkraineMoldova

TurkeySlovak Rep

ArmeniaCzech Rep

RussiaAzerbaijan

GermanyCanadaLatvia

EstoniaLithuania

SwedenMacedonia

United StatesNorwayGeorgia

DenmarkSingapore

New Zealand


Georgia’s remarkable achievement and international recognition is a result of implemented reforms by the

Government of Georgia in 2013-2019. Throughout the past 6 years, the Government of Georgia has

implemented 6 reforms institutional and regulatory reforms:

Starting a Business

o In 2019 Georgia made starting a business easier by allowing voluntary value added tax registration at the time

of business incorporation

Dealing with Construction Permit

o In 2016 Georgia made dealing with construction permits easier by reducing the time needed for issuing

building permits

Getting Electricity

o In 2013 Georgia made getting electricity easier by simplifying the process of connecting new customers to the

distribution network and reducing connection fees.

o In 2017 Georgia improved the reliability of electricity supply by introducing penalties for the utility for having

worse scores on the annual system average interruption duration index (SAIDI) and system average

interruption frequency index (SAIFI) than the previous year. Georgia also mandated the notification of

customers by the utility of planned electricity outages

o In 2018 Georgia made getting electricity more affordable by reducing connection costs for new customers


Registering Property

o In 2017 Georgia improved the quality of land administration by increasing coverage of all maps for

privately held land plots in the main business city

Protecting Minority Investors

o In 2012 Georgia strengthened investor protections by introducing requirements relating to the

approval of transactions between interested parties

o In 2017 Georgia strengthened minority investor protections by increasing shareholder rights and role

in major corporate decisions and by clarifying ownership and control structures

o In 2018 Georgia strengthened minority investor protections by making it easier to sue directors in

cases of prejudicial transactions between interested parties, by increasing shareholder rights and role in

major corporate decisions and clarifying ownership and control structures

Getting Credit

o In 2013 Georgia strengthened its secured transactions system through an amendment to the civil code

allowing a security interest to extend to the products, proceeds and replacement of collateral

o In 2014 Georgia improved its credit information system by implementing a new law on personal data

protection


Paying Taxes

o In 2013 Georgia made paying taxes easier for companies by enhancing the use of electronic

systems and providing more services to taxpayers

o In 2017 Georgia made paying taxes easier by abolishing additional annex to corporate income

tax returns and by improving the efficiency of the online system used for filing VAT returns

o In 2019 Georgia made paying taxes easier by levying income tax on distributed profits rather

than on taxable profits. At the same time, Georgia made paying taxes more difficult by requiring

value added tax to be imposed on advance payments for goods and services

Trading across Borders

o In 2013 Georgia reduced the time to export and import by creating customs clearance zones

o In 2017 Georgia made export and import documentary compliance faster by improving its

electronic document processing system. It also introduced an advanced electronic document

submission option


Enforcing Contracts

o 2013 Georgia made enforcing contracts easier by simplifying and speeding up the proceedings for

commercial dispute

o 2016 Georgia made enforcing contracts easier by introducing an electronic filing system for court users

o Georgia made enforcing contracts easier by introducing random and automatic assignment of cases to

judges throughout the courts

Resolving Insolvency

o In 2013 Georgia expedited the process of resolving insolvency by establishing or tightening time limits

for all insolvency-related procedures, including auction

o In 2018 Georgia made resolving insolvency easier by making insolvency proceedings more accessible

for debtors and creditors, improving provisions on treatment of contracts during insolvency and

granting creditors greater participation in important decisions during the proceedings

Georgia’s Ranking in 10 areas


Overall distance to frontier (DTF) in 10 areas

Georgia is top 10 countries in following areas

Starting a Business – 2th position

Protecting Minority Investors – 2nd position

Registering Property – 4th position

Enforcing Contracts – 8th position

In Doing Business 2019 Georgia is listed amongst

regional leaders on the total count of reforms

In 2019 Georgia takes the 1st position in region -

Europe & Central Asia (amongst 23 countries)

Overall distance to frontier (DTF)

In 2019 Georgia’s Overall distance to frontier

(DTF) score – 83.28

Region Average (Europe & Central Asia) –

72.34

7

3

88

19

17

45

47

3975

2 27

39

412

2

16

43

8

60

0

10

20

30

40

50

60

70

80

90

100

Starting aBusiness

Dealing withconstruction

permits

Gettingelectricity

Registeringproperty

Gettingcredit

Protectingminorityinvestors

Payingtaxes

Tradingacross

borders

Enforcingcontracts

Resolvinginsolvency

2012 2019

99.34

77.61

84.38

92.86

85.00

81.67

89.03

90.03

76.9056.03

90.02

69.02

71.66

75.57

68.765.29

75.8

86.17

65.6555.58

Starting abusiness

Dealing withconstruction

permits

Gettingelectricity

Registeringproperty

Gettingcredit

Protectingminorityinvestors

Payingtaxes

Tradingacross

borders

Enforcingcontracts

Resolvinginsolvency


Compared to 2018, in 2019 Georgia's position

has improved in 4 indicators out of 10:

Starting a Business – 2nd position

Dealing with Construction Permits – 27th

position

Paying taxes – 16th position

Trading Across Borders – 43th position

Compared to 2018, in 2019 the ranking score of

Georgia has improved in 7 indicators out of

ten:

Starting a Business - 99.34 score

Dealing with Construction Permits - 77.61score

Getting Electricity - 84.38 score

Registering Property - 92.86 score

Paying Taxes– 89.03 score

Enforcing Contracts – 76.90 score

Resolving Insolvency - 56.03 score

Georgia’s position in 2018-2019

Ranking Score of Georgia in 2018-2019

4

29 30

4

12

2

22

62

7

57

2

27

39

4

12

2

16

43

8

60

Starting aBusiness

Constructionwith Permits

GettingElectricity

RegisteringProperty

GettingCredit

ProtectingMinorityInvestors

Paying Taxes TradingAcrossBorders

EnforcingContracts

ResolvingInsolvency

2018 2019

97.8

4

77.5

7

84.3

2

92.8

5

85

81.

67

87.1

4

90.0

3

75.9

7

55.5

9

99.3

4

77.6

1

84.3

8

92.8

6

85

81.

67

89.0

3

90.0

3

76.9

56.0

3

Starting aBusiness

Constructionwith Permits

GettingElectricity

RegisteringProperty

GettingCredit

ProtectingMinorityInvestors

Paying Taxes TradingAcrossBorders

EnforcingContracts

ResolvingInsolvency

2018 2019

Dealing with Construction PermitsStarting a Business

In 2019 Georgia has 2nd position In 2019 Georgia has 27th position

Scores by components of Starting a Business Scores by components of Dealing with Construction Permits


7 7

4 4

10

8

4

2

2012 2013 2014 2015 2016 2017 2018 2019

3 2 3

119 8

2927

2012 2013 2014 2015 2016 2017 2018 2019

2 2 4.70.02 2 2.2 0.0

Procedures(number)

Time(days)

Cost(% of income per

capita)

Min. capital(% 0f income per

capita)

2012 2019

13

90

0.611

63

0.37

Procedures(number)

Time(days)

Cost(% of

warehouse value)

Building qualitycontrol index

(0-15)

2012 2019

Registering Property

In 2019 Georgia has 4th position

Getting Electricity

In 2019 Georgia has 39th position

Scores by components of Getting Electricity Scores by components of Registering Property


88

54

36

7062

3930

39

2012 2013 2014 2015 2016 2017 2018 2019

1 1 1

3

4

5 5

4

2012 2013 2014 2015 2016 2017 2018 2019

596

751.3

371

157.4

5

Procedures(number)

Time(days)

Cost(% of income

per capita)

Reliability of supplyand transparency of

tariff index (0-8)

2012 2019

1 1 0.11 1 0.0

21.5

Procedures(number)

Time(days)

Cost(% of

property value)

Quality of the landadministrationindex (0-30)

2012 2019

Protecting Minority InvestorsGetting Credit

In 2019 Georgia has 12th position In 2019 Georgia has 2nd position

Scores by components of Protecting Investors Scores by components of Getting Credit


9

3

56

7 7

12 12

2012 2013 2014 2015 2016 2017 2018 2019

17 16

43

2022

7

2 2

2012 2013 2014 2015 2016 2017 2018 2019

0

29.6

9 80

100

Strength of legal

rights index(0-12)

Depth of creditinformation index (0-8)

Credit registrycoverage

(% of adults)

Credit bureau coverage

(% of adults)

2012 2019

9

67

9

6

9

7

9 9

Extent of disclosure

index(0-10)

Extent ofdirector liability index(0-10)

Ease ofshareholdersuits index

(0-10)

Extent ofshareholder

rightsindex(0-10)

Extent ofownership and

control index (0-10)

Extent ofcorporate

transparencyindex(0-9)

2012 2019

Trading Across BordersPaying Taxes

In 2019 Georgia has 16th position In 2019 Georgia has 43nd position

Scores by components of Trading Across Borders

Scores by components of Paying Taxes


5

448387

5

220

9.9

85.89

Payments(number per year)

Time(hours per year)

Total taxrate

(% of profit)

Postfiling index (0-100)

2012 2019

6

112

2 0 15

396

2

189

Time to export:Border

compliance(hours)

Cost to export:Border

compliance(USD)

Time to export:Documentarycompliance

(hours)

Cost to export:Documentarycompliance

(USD)

Time to import:Border

compliance(hours)

Cost to import:Border

compliance(USD)

Time to import:Documentarycompliance

(hours)

Cost to import:Documentarycompliance

(USD)

2012 2019

4532

22

40 3522 22

16

2012 2013 2014 2015 2016 2017 2018 2019

47 45

31

78

6254

62

43

2012 2013 2014 2015 2016 2017 2018 2019

Enforcing Contracts Resolving Insolvency

In 2019 Georgia has 60th position In 2019 Georgia has 8th position

Scores by components of Enforcing Contracts Scores by components of Resolving Insolvency


285

25

285

25 13

Time (days) Cost(% of claim)

Quality of judicialprocesses index (0-18)

2012 2019

2 3.5

37.2

02

10

0

11

Time (years) Recovery rate(cents on the

dollar)

Cost (% ofestate)

Outcome (0 aspiecemeal saleand 1 as going

concern)

Strength ofinsolvency

framework index (0-16)

2012 2019

39

33

2318 17 16

7 8

2012 2013 2014 2015 2016 2017 2018 2019

75

92

130

105 101106

57 60

2012 2013 2014 2015 2016 2017 2018 2019

Georgia implemented 50 reforms in 2006-2019


2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Starting a Business √ √ √ √ √ √

Dealing with

Construction

Permits

√ √ √ √ √

Getting Electricity √ √ √

Registering

Property√ √ √

Getting Credit √ √ √ √ √ √ √ √

Protecting Minority

Investors√ √ √ √ √ √

Paying Taxes √ √ √ √ √

Trading across

Borders√ √ √ √

Enforcing

Contracts√ √ √ √

Resolving

Insolvency√ √ √ √

Employing

Workers√

WHAT IS DOING BUSINESS

Doing Business is a part of the World Bank Group, the reports of which are published

annually

Presents quantitative indicators on business regulations and the protection of property rights

The reports investigate regulations that enhance and constrain business activity

Doing Business 2019 covers 10 indicators, in 190 economies

The first Doing Business report, published in 2003, covered 5 indicator sets in 133 economies


WHAT DO THE DOING BUSINESS INDICATORS MEASURE

Business regulation, protection of property rights & their effects on businesses, especially on SMEs

Degree of regulation, such as the number of procedures for starting a business or for registering and

transferring commercial property

They gauge regulatory outcomes, such as:

o Time and cost to enforce a contract, go through bankruptcy or trade across borders

o The extent of legal protection of property

o A set of indicators that document the tax burden on businesses

WHAT DOING BUSINESS COVERS

Sub-groups of Doing Business 2019 of 190 economies

o Sub-Saharan Africa: 48 economies

o Latin America and The Caribbean: 32 economies

o Eastern Europe and Central Asia: 23 economies

o East Asia and the Pacific: 25 economies

o Middle East and North Africa: 20 economies

o South Asia: 8 economies

o OECD high-income economies as benchmarks: 34 economies


ease of doing business 2019 - economy.ge€¦ · ease of doing business 2019 georgia’sremarkable...

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