Starting private business still a lengthier process in Nepal: Report

 Kathmandu, Oct. 31

The latest Doing Business Report 2019, a flagship publication of the World Bank (WB), has concluded that it takes 16.5 days to seven persons to start a private business in Nepal.

The South Asian average is 13.7 days for 7.6 men while the developed countries average is about 5 men and 9.3 days. New Zealand, the best performer in starting business, needs only one person to start a business and it can be registered in half-a-day.

A Nepali has to spend more than 22 per cent of the average per capita income to start a business which is 11 per cent in South Asia, 3.1 per cent in the developed countries and zero in Slovenia.

But the country has made progress in resolving insolvency and stands before its South Asian average 2.6 years, with 2-year period for shutting down a business firm.

Similarly, Nepal performs better in enforcing contracts as well. It takes 910 days to enforce a contract while the South Asian average is 1101.6 days.

The country also made reforms in labour market regulation.

“Nepal changed regulations pertaining to fixed-term contracts, probationary periods, working hours, paid maternity and lick leave, night work for women, third party approval in case of redundancy and unemploymetn protection,” reads the report.

However, it made regression in tax regime by making paying taxes more difficult by introducing a new labour contribution (gratuity contribution), medical insurance and accident insurance paid by the employer.

Last year, Nepal made progress in the areas of getting credit by strengtheing access to credity by implementing functional secured transactions system and establising a centralised, notice-based modern collateral regitry and protecting minority investors by requiring greater corportate transparency.

According to the report, in case of doing business Nepal ranks 110 among 190 economies around the globe with 59.63 marks out of 100.

China ranks 46, India 77, Bhutan 81 and Sri Lanka 100 in terms of doing business.

Nepal stands at the 148^th  position of the 190 countries in dealing with construction permits, 137^th  in getting electricity, 88^th  in registering property, 99^th  in getting credit, 72^nd  in protecting minority investors, 158^th  in paying tax, 82nd in trading across borders and 154^th  in enforcing contracts.

Published in The Rising Nepal daily on 1 November 2018.