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Assessing Jamaica's Performance In Doing Business

Assessing Jamaica's Performance In Doing Business

Posted by Shanelle Weir on March 27, 2014

This year, the 2014 World Bank 'Doing Business Report', titled 'Understanding regulations for small and medium sized enterprises,' compares business regulations for domestic firms in 189 countries across the world. The report summarises data on some key elements necessary for a country to effectively conduct business.

How does Jamaica rank?

Jamaica has improved in several key aspects of the report. However, the country has been consistently falling in the overall ranking, moving from 85th in 2012 to 90th in 2013 and 94th this year. According to the report, regulations as doing business, affect firms via their life cycles - at start-up, in getting a location, daily operations, getting financing and when things go wrong. Let us assess how Jamaica has performed on each.

At start-up

The most important elements of the start-up process are ease of starting a business and employing workers. According to the report, Jamaica made starting a business easier by enabling the Companies Office of Jamaica to stamp the new company's articles of incorporation at registration. It takes five procedures and six days to start a business here compared to seven procedures and more than 20 days, on average, worldwide. Despite making it easier to do business, Jamaica still slipped two places on the ranking table, moving from 21st, last year, to 23rd.

In daily operations

Paying taxes and trading across borders must be smooth for firms to progress in their daily operations. According to the 2014 report, Jamaica made paying taxes easier by reducing the corporate income tax rate although vehicle and asset taxes were increased. Over the last two years, Jamaica has improved in its ability to pay taxes, moving from 174th in 2012 to 168th. Jamaica's rank, as it relates to trading across borders, has been worsening, consistently, dropping from 99th in 2012 to 106th in 2013 and 118th.

In getting financing

Getting credit and protecting investors are essential for firms. In the report, Jamaica improved its credit-information system by creating legal and regulatory framework for private credit bureaus. Notwithstanding this, Jamaica fell from 97th in 2012 to 104th in 2013 to 109th on the rankings. As it relates to protecting investors, our rank hasn't changed. Jamaica has maintained a steady 80th position in 2013 and 2014.

In getting location

Dealing with construction permits, getting electricity and registering property are key aspects of getting a location. According to the report, Jamaica made transferring property more difficult by increasing the transfer tax and stamp duty. Although relative to other countries, Jamaica now ranks 114 in terms of ease to register property, up from 105 last year. Notwithstanding, it is relatively easier to register property in Jamaica, compared to the rest of the Caribbean and Latin America, on average. Roughly six procedures and 37 days are required in Jamaica, compared to seven procedures and more than 60 days in the rest of the Caribbean and Latin America.

Getting electricity in Jamaica is becoming more difficult. Last year, Jamaica dropped 13 places, from 110th to 123rd, the country has fallen nine additional places, now ranked at 132. It takes six procedures, on average, to obtain electricity in Jamaica as opposed to five in Latin America and the rest of the Caribbean.

As it relates to dealing with construction permits, Jamaica also slipped two places, moving from 50th in the world last year to 52nd this year.

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