Ease of Doing Business
There is a scale to measure the economies, for their ease of doing business. It starts from 1 and ends at 185. More number means more ease of doing business. This scale is devised by using multiple indicators, giving them their proper weight-age. According to the 2017 rankings, Pakistan got 147 on ease of doing business scale. In terms of starting the business, it is under 50 at rank on the index.
This index is formulated by the world bank and is accepted worldwide. Higher on the index shows that country has simple and better rules for business and property rights are strongly protected in this country.
The index considers the rules and laws of the country, opinion of a large number of government officials, business persons, lawyers, account persons and other professionals. These are the people, who are expert in regulatory and administrative requirements of the country.
10 sub-indices, which play a vital role in standing of any nation on this index
1. Opening a new business – Time, method, amount and capital needed to start a new business
2. Obtaining licenses – Time, process, cost of obtaining license and inspections ( in case of construction industry)
3. Appointing and dismissing employees – rigidity of hours of index, difficulty of hiring index, difficulty of firing index, cost of employing and dismissing workers.
4. Registration of property – process of registration, time it takes and cost of registering a commercial property.
5. Receiving credit – Depth of credit information index, strength of legal rights index.
6. Investors’ protection – Indices on the extent of disclosure, extent of director liability, ease of shareholder suits.
7. Tax payments – Number of times tax paid, hour in a year which are spent on the preparation of tax returns, total payable tax according to the gross profit shares.
8. Trading to other countries – Documents required, requirements of signatures and time needed to import and export.
9. Contracts implementation – Processes, time and cost to apply a debt contract.
10. Closure of business – Time and cost to close a business and rate of recovery.