WASHINGTON, October 27, 2015 – A new World Bank Group report finds that Colombia continues to be one of the top ranked economies in Latin America and the Caribbean – along with Mexico, Chile and Peru. While challenges remain in areas of business regulations, Colombia is also amongst the top performers worldwide in Getting Credit.
Doing Business 2016: Measuring Regulatory Quality and Efficiency, released today, reveals that Colombia is one of the 15 economies that implemented reforms in Latin America and Caribbean during the past year, thereby making it easier for local entrepreneurs to do business. Notably, since 2009, Colombia has reformed in all areas measured by Doing Business – the only economy in the region to do so.
In the past year paying taxes was made less costly for companies by reducing the payroll tax rate and introducing exemptions for health care contributions paid by employers. This reform paired with previous efforts continues to ease the tax compliance for medium-size companies. For example, 10 years ago, it took a medium-sized Colombian company 70 payments per year to file and pay taxes; now the process only requires 11 payments – fewer than in Switzerland.
This year’s report also finds that Colombia is one of only three economies worldwide that sets the highest possible score for the strength of legal rights for creditors, meaning there is a strong framework to facilitate lending within applicable collateral and bankruptcy laws. This, coupled with a strong credit reporting system that covers the majority of the adult population and collects most of the relevant areas of information to assess credit-worthiness has resulted in Colombia standing at 2 out of 189 economies in the Getting Credit Indicator.
“The Colombian government has done much in the last several years to enhance the quality of the business environment for the private sector. Doing Business data show that Colombia is the country that has made the greatest improvements in Latin America in the areas covered by the report’s indicators,” said Augusto Lopez Claros, Director of the World Bank’s Global Indicators Group, which produces the report. “Notwithstanding these impressive efforts, there is still room for growth in ensuring that business regulation continues to enable entrepreneurship, which is critical for job-creation and economic growth.”
This year’s Doing Business report completes a two-year effort to expand benchmarks that measure the quality of regulation, as well as efficiency of the business regulatory framework, in order to better capture ground realities.
For example, in addition to the steps, time and costs to get connected to the grid, the Getting Electricity indicator now looks into the quality of the electricity supply. Colombia does well on these new measures as entrepreneurs in Bogota face on average less than one outage a month. Moreover, the utility in Bogota collects data on outages and restores service using modern automated systems.
On the new index of Dealing with Construction Permits, Colombia also does well, scoring better than both the regional and global averages when it comes to good practices in construction regulation, quality controls and safety mechanisms. Thus, while Colombia is the economy in Latin America and the Caribbean region where it takes the least amount of time to build a warehouse – efficiency does not come at the expense of safety.
The full report and accompanying datasets are available at www.doingbusiness.org