Wednesday, 26 October 2016 8:09 AM

Economies in the Pacific Islands Ease Rules for Entrepreneurs - Report

A new World Bank Group report shows that economies in the Pacific Islands continue to implement reforms to make it easier for entrepreneurs to do business.

Doing Business 2017: Equal Opportunity for All, released today, finds that four of the ten Pacific Island economies measured by the report have implemented reforms making it easier to do business - for a total of 9 reforms. This is an increase from only three reforms in the previous year. Fiji, the Solomon Islands, Papua New Guinea and Vanuatu implemented reforms to improve the business environment.

Vanuatu carried out the most reforms, with four reforms recorded in the past year, compared to two the previous years. The reforms included the strengthening of protections for minority investors by increasing shareholder rights and role in major corporate decisions and clarifying ownership and control structures. Also, Vanuatu made starting a business easier by removing some registration requirements and through the digitization of the company register. Now it takes 18 days to start a business, compared to 35 days last year.

Papua New Guinea eased the process of starting a business for entrepreneurs by reducing the time required to start a business through streamlining business registration at the Investment Promotion Agency (IPA). Fiji also made starting a business easier by reducing the fee charged by the business registry and also by reducing the time required to start a business. In Fiji it now costs an entrepreneur 17.9 percent of income per capita to start up and formally operate a local limited liability company, compared to 21.3 percent of income per capita last year.

The Solomon Islands improved access to credit information by establishing a credit bureau. However, the percentage of the adult population covered is still below 5 percent.

The Pacific Islands region also boasts of some good practices. For example, in Tonga it takes 77 days to complete all requirements for obtaining a construction permit, compared to the global average of 156 days.

"Vanuatu’s reforms continue a string of important business registration reforms across the Pacific in recent years and make it easier for people in Vanuatu to establish a business. Sustained business regulatory reforms such as this are needed across the Pacific to reduce business impediments, allowing people to take advantage of business opportunities and improve their livelihoods" said Jonathon Kirkby, Senior Operations Officer, International Finance Corporation.

This year, the Doing Business report considers gender-related aspects in three areas: Starting a Business, Registering Property and Enforcing Contracts. Most perform well on these measures. The exceptions include Kiribati and Tonga where married women do not have equal ownership rights to property as men.

The Paying Taxes indicator set has been expanded as well to include measures of post-filing processes relating to tax audits and tax refunds. Samoa, Papua New Guinea and Vanuatu have some of the lowest VAT refund compliance times in the world. It takes only 1 hour to comply with VAT refund in Samoa, faster than in many OECD high-income economies. However, in Papua New Guinea it takes 44 weeks to obtain the actual VAT refund.

The full report and accompanying datasets are available at; http://www.doingbusiness.org/