MOSCOW, October 31, 2018 – Russia continued its efforts to enhance the regulatory environment for small and medium enterprises, carrying out four reforms in the past year according to the World Bank Group’s Doing Business 2019: Training for Reform report, released today.
The reforms, to improve the business climate for domestic small and medium enterprises, applied to both Moscow and St. Petersburg, the two Russian cities benchmarked by the Doing Business report. As a result of the latest reforms, Russia advanced to 31st place in the global ease of doing business ranking, representing an improvement from the 35th place last year and 40th place two years ago. Russia was ranked 120th seven years ago.
“Russia has once again demonstrated its commitment to improving the business climate for private enterprise. We look forward to continuing to record the country’s progress in adopting global best practices in regulating domestic small and medium businesses.,” said Andras Horvai, World Bank Country Director and Resident Representative for the Russian Federation.
Highlights of the past year’s reforms are:
- Dealing with Construction Permits was made faster by reducing the time needed to obtain construction and occupancy permits. Quality control measures during construction were also enhanced by introducing risk-based inspections.
- Getting Electricity was made faster by imposing new deadlines for connection procedures and by upgrading the utility’s single window as well as its internal processes. Getting Electricity was also made cheaper by reducing the cost to obtain a connection to the electric grid.
- Paying Taxes became less costly by allowing a higher tax depreciation rate for fixed assets.
- Trading Across Borders was made easier by prioritizing online customs clearance and introducing shortened time limits for its automated completion.
Russia excels in the area of Getting Electricity, with a global rank of 12. With the latest reform, it now takes only 2 procedures and costs 5.7 percent of income per capita to get connected to the electrical grid, compared to the average of 5 procedures and 325 percent of income per capita in the Europe and Central Asia region. The number of days needed to obtain an electricity connection also has been reduced to 73 days, from 83 earlier. Here again, Russia performs significantly better than the regional average, which is 110 days.
Registering Property and Enforcing Contracts are also areas of strength for Russia. Registering Property has been a focus of reforms in recent years, which have helped place Russia in 12th place globally. In the area of Enforcing Contracts, it takes only 337 days for a business in Russia to resolve a commercial dispute through a local first-instance court, compared to 496 days in the region.
However, there is room for further improvement in several areas, including Trade Across Borders, Resolving Insolvency and Protecting Minority Investors. Russia scores only 2 out of 10 in the extent of director liability index, which means that in case of misuse of corporate assets, directors would be held liable in very few situations.
The full report and its datasets are available at www.doingbusiness.org