Doing Business in Cyprus

1. Doing Business in Cyprus Sylvia Solf Global Product Lead, Investment Climate Department, World Bank Group Nicosia July 4th, 2014

2. Doing Business indicators – measuring business regulations throughout the lifecycle of a firm • DO NOT measure all aspects of the business environment such as macroeconomic stability, corruption, level of labor skills, proximity to markets, or of regulation specific to foreign investment or financial markets. 2

3. Methodology – How complex are simple transactions if all rules are followed? • Focus on regulations relevant to a small to medium-sized domestic business. • Built on standardized case scenarios. • Are measured for the most populous city in each country. • Are focused on the formal sector. • Measureprocedural efficiency of the regulatory process • Follow the entrepreneur from the beginning to the end of a basic transaction • Record every step of the process, and the associated time and cost • Gather all the relevant laws, regulations, decrees and fee schedules 3

4. How strong are regulations in protecting investors and property rights? • Example: Protecting Investors • Measures disclosure requirements, liability rules and legal recourse options for shareholders when directors do not act in their interest • Where those rules are stronger, investors are more likely to invest • Assigns value based on laws, regulation 4

5. High rank on the ease of doing business – a result of efficient regulatory processes and strong legal institutions OECD high-income economies have the most business-friendly regulatory environment on both dimensions Size of bubblerepresentsnumber of economies 5

6. Strong correlation between Ease of Doing Business and Global Competitiveness Index

7. 11 EU members in the top 30 on the ease of doing business 7

8. Pace of reforms remains strong in 2012/13: share of economies with at least one reform making it easier to do business OECD high Income EU-28 73% Europe and Central Asia 61% Middle East and North Africa 40% 75% East Asia and Pacific Latin America & the Caribbean 53% 60% 58% 66% South Asia Sub-Saharan Africa Worldwide, 114 economies implemented 238 reforms in 2012/2013, 18% rise with respect to 2011/2012. While in the EU, 17 economies implemented 38 reforms in 2012/2013. 8

9. Cyprus has made efforts to improve its business regulations, but others are moving faster 9

10. On average, Cyprus compares well to other EU countries Rank 10

11. But performance varies greatly among different areas of the regulatory environment 11

12. Cyprus has a strong regulatory framework in some areas • Minority shareholders benefit from comparatively strong approval and disclosure requirements in related-party transactions • Secured transactions legislation supports the use of movable collateral

13. But enforcement and commercial dispute resolution can be slow

14. How much credit information is shared? Number of economies in EU with each score on credit information index Cyprus

15. Construction formalities involve multiple agencies and approvals It takes 677 days to complete all formalities and obtain clearances to build a warehouse in Nicosia Updating of the land title Building permit Town planning permit4

16. Getting an electricity connection takes 247 days and involves clearances from at least 6 agencies

17. Registering property is not complex but comparatively costly

18. Transaction costs could be further reduced in other areas as well Source: Doing Business 2014 report, World Bank Group.

19. Global best performers adopted most of the good practices across all areas measured

20. Thankyou! www.doingbusiness.org