Nepal ranks 116th in the Doing Business 2011 report

Political stalemate and worsening business climate have taken their toll of Nepal’s business environment. Nepal has fallen by four positions in the Doing Business Report unveiled on Thursday. Nepal is ranked 116th in the Doing Business 2011 report from 112 of last year.

The report made public by the World Bank says Nepal made no reports of any reforms last year. Except for dealing with construction permits and registering property, Nepal slipped in six indicators of the Doing Business Report.

Starting a business in Nepal, according to the report, has become much difficult. Nepal’s ranking in starting a business has slipped by 8 positions to 96 from 88 last year.

Nepali private sector often complains about not been able to close their business even if they incur loss. The report illustrates this fact. Nepal is ranked 107 in closing a business.

The only silver lining for Nepal is, it is ahead of the world’s second fastest growing economy, India. India is ranked at 134.

The Doing Business Report provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level. It analyzes regulations that apply to starting up and operation of businesses, trading across borders, paying taxes and closing a business.

Insurgency-hit Pakistan topped all the countries in South Asia as it reduced the time for exporting by improving electronic communication between the Karachi port authorities and private terminals in the past year, the report says.

During the launch of the report, World Bank officials said that the report did not reflect the overall business environment because issues of vital concern for investors such as security and other environments had not been included.

Even amongst the South Asian countries, Nepal is only ahead in registering property where it is ranked first. The procedure to resister property is the easiest in Nepal, and it takes the least time. The cost of registering property is also the lowest. Nepal’s getting credit indicator is among the poorest in South Asia. Nepal’s performance is moderate in terms of protecting investors and it is moderate in terms of the time and tax rate in South Asia.

Nepal came fifth in terms of procedures to start a business while it is sixth in terms of the time to start a business. However, the cost of starting a business is higher here compared to the per capita income putting the country in the seventh position in South Asia.

Nepal stands at the fifth position in terms of procedures to deal with construction permits while it takes the longest time to deal with construction permits in South Asia. The cost of dealing with construction permits is among the lowest in South Asia after the Maldives and Bhutan.

Nepal is among the poorest nations in terms of export ease as the country has been ranked six in terms of documents needed for export, and it is seventh in terms of the time to export and cost of export. Nepal’s position in terms of enforcing contracts is relatively better compared to other South Asian countries. Closing a business is, however, very difficult in Nepal with the cost of insolvency being the highest and the time to go through insolvency is also among the highest.

TOPIC RANKINGS DB 2011 Rank DB 2010 Rank Change in Rank
Starting a Business 96 88 -8
Dealing with Construction Permits 130 131 1
Registering Property 25 26 1
Getting Credit 89 89 87 -2
Protecting Investors 74 73 -1
Paying Taxes 123 123 122 -1
Trading Across Borders 164 161 -3
Enforcing Contracts 123 123 No Change
Closing a Business 107 104 -3
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