LIMA, October 31, 2018 – Peru carried out two reforms in the past year to improve the business climate for domestic small and medium sized businesses, says the World Bank Group’s Doing Business 2019: Training for Reform report, released today.
The reforms cover the Doing Business areas of Starting a Business and Dealing with Construction Permits.
- Peru made it easier to start a business by reducing the time needed to obtain the municipal license and building safety technical inspection from the district council. Peru performs better than the region in this area. It takes 24.5 days to start a business and costs 10 percent of the income per capita, compared to 28.5 days and 38 percent of the income per capita on average in Latin America and the Caribbean region.
- Peru also strengthened the quality control in construction by imposing stricter qualification requirements for professionals in charge of technical inspections. Peru performs well in this area with a score of 13 out of 15 in the building quality control index. Sound regulation of construction helps protect the public from faulty building practices. In addition, obtaining all the necessary permits and authorization to build a warehouse in Peru costs only 1.2 percent of the warehouse value, which is less than the 3.2 percent regional average.
Other Doing Business areas where Peru performs well are Registering Property, Getting Credit and Protecting Minority Investors. Peru is the top performer in the Latin America and the Caribbean region in Registering Property. It takes only 7.5 days for a business to transfer the property title, compared to the 63-day average in the region.
“Peru has made some progress in several key areas of business regulation in the past decade. However, there is still a lot to be done and we look forward to a more dynamic reform effort in the coming years,” said Santiago Croci Downes, Program Manager of the Doing Business Unit.
The country also performs well in Getting Credit with global rank of 32. For Example, Peru scores the maximum possible points on the depth of credit information index. The sharing of credit information helps businesses access credit and obtain lower interest rates, while improving borrower discipline and supporting better bank supervision and credit risk monitoring. In Protecting Minority Investors, Peru is ranked 51 globally. The country scores 9 out of 10 in the extent of disclosure index, thanks to strict rules on the transparency of related-party transactions.
However, Peru underperforms in the area of Paying Taxes. For example, it takes more than 30 weeks to complete a corporate income tax audit, compared to less than 22 weeks in the region. Another area where there is room for improvement is Trading across Borders, where the country is ranked 110 in the world. Completing all border compliance requirement costs importers $700 in Peru, slightly above the regional average of $647. The Doing Business report was able to deepen its knowledge across topics in Peru by expanding its pool of contributors by 24 percent, to 173 contributors located in Lima.
All in all, in the global ease of doing business ranking, Peru is in 68th place this year. In the absolute metric, Peru’s ease of doing business score improved from 68.3 to 68.8 over the last year.
The full report and its datasets are available at www.doingbusiness.org