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Doing Business in Poland

Doing Business in Poland. Marcin Pi ą tkowski Senior Economist. Warsaw, Poland November 4, 2010. 1. What does Doing Business measure?. Doing Business indicators: Focus on regulations relevant to the life cycle of a small to medium-sized domestic business.

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Doing Business in Poland

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  1. Doing Business inPoland MarcinPiątkowski Senior Economist Warsaw, Poland November 4, 2010 1

  2. What does Doing Business measure? • Doing Business indicators: • Focus on regulations relevant to the life cycle of a small to medium-sized domestic business. • Are built on standardized case scenarios. • Are measured for the most populous city in each country. • Are focused on the formal sector. • 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. Doing Business indicators – 11 areas of business regulation (9 included in the ranking) Entry Property rights Investor protection Access to credit Administrative burden Flexibility in hiring Recovery rate Reallocation of assets 3

  4. Top 30 economies on the ease of Doing Business 2009/10 4

  5. The 10 economies improving the most in the ease of doing business in 2009/10 5

  6. Percentage of countries with at least one positive reform in 2009/10 Strong global pace of improvements in regulations making business easier: 216 in 117 economies 84% Eastern Europe and Central Asia OECD high Income 61% Middle East and North Africa East Asia and Pacific 47% South Asia 63% 59% 67% 75% Latin America and Caribbean Sub-Saharan Africa 6

  7. Poland improved by 3 positions from 73 in DB10 (as back-calculated) to 70 in DB11 ranking Baltic states (average rank): Estonia, Latvia, Lithuania 21 37 European Union (average rank): Austria, Belgium, Bulgaria, Cyprus, Czech republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, The Netherlands, Poland, Portugal, Romania, Slovak republic, Slovenia, Spain, Sweden, United Kingdom (excluding Malta) 70 Poland 7

  8. Poland is among the EU economies that improved the most their business regulation over the past 5 years

  9. Poland’s ranking relative to other economies in the European Union Easier to do business More difficult to do business

  10. In comparison to the European Union 26 country average, Poland ranks lower in 7 out of 9 indicators Highest 1 Lowest 183 10

  11. Poland’s performance varies by topic

  12. The reform agenda Recommendations from the World Bank’s Reform Memorandum 2010

  13. Construction permits - building a warehouse is a lengthy and cumbersome process in Poland … and 32procedures to build a warehouse It takes over 10 months…

  14. Recommendations to improve theconstruction permitting process • Shorten and enforce statutory approval limits when processing construction and occupancy permits • Streamline procedures to issue construction permits using delegation and notification • Pro-actively use the risk-based approach when processing applications for construction and occupancy permits • Rationalize and consolidate post-completion inspections • Cautiously use “silence is consent” principle in construction

  15. Starting a business in Poland is lengthy and costly Cost to start a business (% GNI per capita) Time to start a business (days)

  16. Recommendations to improve starting a business • Short–term reform recommendations: • Unify all numbers into one universal identification number and issue it by the Registration Court; connect all public databases • Make available standard company agreements with the option of drafting and notarizing custom made company agreements, and empower officials to verify signatures • Eliminate separate registrations for National Sanitary Inspection and National Work Inspection; combineregistration for VAT at the National Court Register • Eliminate the minimum capital requirement

  17. In payingtaxes, numerous payments, complex laws and procedures are main cause of low rank Time to pay taxes (hours) Number of tax payments per year

  18. Recommendations: Implementing electronic filing of returns Make electronic filing mandatory for all corporate entities and medium to large businesses (say, with turnover over Euro 1 million) Digital signatures costly for small firms – make use of tax intermediaries legal Simplify forms further, making them better suited to e-filing Provide more user-friendly software Popularize electronic filing through targeted communications campaigns

  19. Enforcing contracts and closing a business is lengthy Time to close a business (years) Time to enforce a contract(days)

  20. Reforms to improve contract enforcement and closing a business Conduct a procedural mapping of internal processesat the commercial and insolvency courts; review courts around Poland and share best practices to improve efficiency Introduce computerized case management system Strengthen court management and improve measurement ofthe performance of courts andindividual judges Reduce inflow of cases through out-of-court arbitration and workouts

  21. Thank you. For more information:www.doingbusiness.org 21

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