Georgia’s ranking in the Ease of Doing Business 2018 among the 190 countries covered by the World Bank Group annual report slipped to the 9th position from the 16th position last year. The latest Doing Business 2018 of the World Bank showed that Georgia’s distance to frontier (DTF) is slightly improved from 79.92 in the Doing Business 2017 report to 82.04 in 2018.
Georgia still stands out in Europe and the Central Asia as a country that has made significant steps towards better and more effective regulations.
Georgia’s success in the World Bank ranking has been the result of the effective and coordinated work of the country’s government.
Government of Georgia has already implemented and is continues to implement the reforms aiming at further improvement of Georgia’s ranking in the World Bank Doing Business 2019.
Georgia outranked such successful countries as Sweden, Macedonia, Estonia, Finland, Australia, Taiwan (China) and Latvia.
According to the Ease of Doing Business 2018, Georgia has improved 5 indicators.
Compared to the indicators of 2017, Georgia’s ranking is improved in 6 indicators and remained unchanged in 4. Georgia experienced no deterioration in any indicators.
Indicators with improved DFT scores:
• DFT score of 97.84 in starting business (improved by 0.01)
• DFT score of 77.57 in dealing with construction permits (improved by 0.02)
• DFT score of 84.32 in getting electricity (improved by 0.55)
• DFT score of 81.67 in protecting minority investors (improved by 5.00)
• DFT score of 87.14 in paying taxes (improved by 0.04)
• DFT score of 55.59 in resolving insolvency (improved by 15.57)
Compared to Doing Business 2013 (Released in 2012) Georgia improved 6 indicators and:
• 4th position in starting business (7th in 2013);
• 30th position in getting electricity (50th in 2013);
• 2nd position in protecting minority investors (19th in 2013);
• 22nd position in paying taxes (30th in 2013);
• 7th position in enforcing contracts (30th in 2013);
• 57th position in resolving insolvency (81st in 2013).
Before introduction of new methodology (along with the indicators of simplicity and speed of procedures, new methodology included the qualitative indicator), Georgia took the 9th position in Doing Business 2013. According to the new methodology and upon the revised data, Georgia was ranked the 9th as of 2013. Thereafter, Georgia has slipped to the 14th positions.
Georgia’s significant success in the ranking of 2018 and international recognition is a result of the reforms implemented by the Government of Georgia.
Getting electricity - The cost and number of procedures for accessing the electricity network for business reduced by reform.
Protecting minority investors - In the wake of the protection of small shareholders' rights in May 2017, amendments were made to the Law of Georgia on Entrepreneurs and the Securities Market. Also, a new law of Accounting, Reporting and Audit was adopted in 2016, which also positively affected the indicator. These changes are to even more ensure the protection of the rights of small shareholders. Smaller shareholders have more access to internal documents and reimbursement of the company managers. Regulations related with the Audit Committee and the Conflicts of Interests have been revised and complied with the international standards.
Resolving insolvency - In May 2017, the amendment was made to the Law of Georgia on Insolvency proceedings. As a result of this reform, the rights of the debtor and creditor(s) have become further strengthened. With the amendment, any creditor may make a statement on insolvency of the debtor, and the debtor is entitled to demand bankruptcy as well as rehabilitation. The amendments have also regulated the procedures of withdrawing the financial information of the debtor by the creditors and discontinuing the contracts that are essential to the debtor.
Starting business - Until now, the Doing Business Group considered a separate mandatory procedure to open a bank account and pay the registration fee; As a result of the reform, the payment of the registration fee as well as the submission of application is combined at the same place, which, as a result of the explanatory dealing with the Doing Business Group, confirmed that opening a bank account is not a separate mandatory procedure because the obligation to open a bank account for business registration is not envisaged by the legislation. Accordingly, the Doing Business Group acknowledged that the registration of business in Georgia requires 2 procedures (company registration and VAT payer registration)
Enforcing contracts, Doing Business 2018 included the forward information on pre-enforcement fees which is 2% of the execution requirement, instead of 6.9% in the DB 2017 report.
Georgia ranked the same position in the tax payment indicator (22nd place).
According to the DB 2018, the top 10 countries where it is easiest to do business are:
Georgia outranks the first 20 countries in terms of reforms, according to the World Bank.
2 99 11 11
2 99 11 70
2 99 11 61
2 99 11 70