GCC: Doing Business In The World 2014 Treps, the annual Doing Business reports are co-published by the World Bank and the International Finance Corporation, basically aiming to give you a look at the ease (and the difficulty) of establishing and running SMEs in different countries. We’ve given you the executive summary of some of the most relevant facts for doing biz ’round these parts culled from their report. Entrepreneurs can (and should) use these reports to help evaluate whether their ideal locations to set up shop really are ideal. Making a decision for your SME isn’t solely based on regulations respective to specific nations, but it certainly is a factor when it comes to registering property, paying and filing taxes, importing and exporting, construction permits, and more. www. doingbusiness.org
It takes the least time to get set, get ready and go! Business people setting up in the GCC get it done quicker in the UAE over the rest.
It takes the least amount of time to start a business in UAE, Egypt, and Oman. It’s no surprise to see the UAE up there, given its openness to business expansion, especially after winning the Expo 2020 bid. Given Egypt’s political situation, it might be surprising for some to see it there.
In all three countries, it only takes eight days to start a business, the least amount of time in the entire MENA region. Oman requires only five procedures, one less than the UAE. While the UAE and Egypt require 0% paid-in minimum capital, Oman surprisingly requires 209.8%, more than Iraq, Algeria, and Yemen.
Get your hard hat on and your boots laced up in Bahrain. Because it ranks first when you’re trying to get the sign-off on construction permits.
The tiny island state in the Arabian Gulf barely made it past the UAE to be ranked first when it comes to the ease of dealing with construction permits. While it doesn’t rank first in all the different indicators, it was the most consistent among those ranked at the top. It takes Bahrain 60 days to complete a construction permit, a few days less than booming Qatar, but 16 days more than the UAE. Bahrain is also ranked second in cost, with only 9.3% of income/capita, with Qatar only requiring 1.1%. An interesting fact is that while Bahrain and the UAE require 12 procedures, Iraq only requires 10.
Get your passports at the ready residents of the UAE – you’re ranked first for cross-border trading.
Trading across borders is easiest in the UAE, ranking fourth globally- an impressive measure. The UAE only requires three documents to export, with regional competitors Saudi Arabia and Qatar requiring five. Lebanon and Tunisia require less than the former two, with only four documents. It also takes the least amount of time to export in the UAE, requiring only seven days, as opposed to 11 in Bahrain, 10 in Oman, and 17 in Qatar. That said, cost is a factor since it isn’t the cheapest to export from the UAE, costing US$655 dollars/container. It’s actually less expensive in Egypt and Morocco, costing $625 and $595 dollars respectively.
Flex Your Muscles
If you’re looking for investor protection in the region, you bug bro is KSA. They’re in your corner for this one, and it’s certainly something you need to pay attention to.
The Kingdom of Saudi Arabia ranks first on the strength of investor protection index at 6.7, compared to UAE that scored 5.0, and Qatar that scored 4.3. In 2009, Saudi Arabia, bolstered investor protection with new regulations. Earlier this year, the UAE passed reforms that strengthen investors by providing additional disclosure requirements for related-party transactions, and allowing them to sue directors if these transactions are unsafe on the stock exchange.
UAE makes it the easiest to get the juice flowing for your business, and electricity is one of the staples from the get-go.
The UAE topped the vast majority of the indicators that determine ease of getting electricity, so it’s no surprise that it’s a regional powerhouse. It only takes three procedures in the United Arab Emirates to get an electricity connection. Its regional competitors Qatar and Saudi Arabia both require four, and fellow GCC state Kuwait requires seven. While it takes 61 days for Saudi Arabia, and 90 days for Qatar, it takes the UAE just 35 days to get electricity. The UAE recently omitted mandatory site inspections- playing a huge role in easing access to power.
Your New Digs
Registering your newest property acquisition is the least arduous in UAE- it’s a creatively easy process compared to other nations in the area.
The UAE ranked first when it comes to ease of registering property, requiring only two procedures, alongside Oman and Bahrain. Kuwait and Lebanon require eight, and Qatar requiring seven. It only takes six days for the UAE to register property, two more than Saudi Arabia. Sudan is ranked third in that indicator, requiring only nine days. While it only costs 0.4% of property value in the UAE, and 0.3% in Qatar, Saudi Arabia is ranked top at 0, which perhaps indicates Saudi Arabia’s interest in significant increasing its economic growth.
Fist Bump: You’re Solid
If you’re based in Bahrain, then you’re luckily ranked first when it comes to ease of dealing with insolvency.
The island GCC state’s insolvency process is relatively efficient, taking 2.5 years as opposed to the UAE’s 3.5 years, Saudi Arabia’s 2.8 years, and Kuwait’s 4.2 years. With the UAE and Saudi Arabia requiring 20% and 22% of the estate in costs, Bahrain requires only 10%. Oman tops this indicator, only requiring 4%. Bahrain showed the fastest recovery rate, with 67.4 cents on the dollar. Qatar is second at 55.6, but the UAE and Arabia showed much slower rates at 29.4 and 28.3 cents respectively.
In the region, when you’ve got to shell out your dues, Qatar makes it the easiest to get you in the clear.
This ranking might be unexpected for some given the UAE’s ease on taxes for businesses, which is evident as it only takes 12 hours to pay taxes as opposed to 41 in Qatar. Like the UAE, Qatar only imposes four tax payments, but Saudi Arabia only imposes three. A key indicator that shows Qatar’s ease in paying taxes is its total corporate tax rate: Qatar imposes only an 11.3% tax rate, as opposed to the UAE’s 14.9%, and Saudi 14.5%. The UAE is pushing for greater ease, having setting up an online filing and payment system for social security contributions in 2013. What about rates? Egypt increased the corporate tax rate to 42.6%.