Hong Kong continues to lag behind Singapore in ease of doing business, the World Bank said yesterday, because of onerous procedures for property registration and high costs for closing a company.Singapore was rated the easiest economy in the world to do business for the fourth year in a row by the World Bank and its private-sector lending arm, the International Finance Corp. The ranking came in the Doing Business 2010 report.
New Zealand was ranked as the second-easiest place to do business, with Hong Kong lagging in third place - the same position as last year. The United States was fourth, followed by the United Kingdom.
Still, the World Bank found Hong Kong to be the easiest place in the world to get a construction permit after the government created a one-stop shop to expedite the process.
But the SAR's overall ranking was dragged down by property-registration procedures - said to be worse than those of 74 other economies - and difficulties in closing a business.
Penelope Brook, the World Bank's acting vice president for financial and private sector development, said red tape has a bearing on how well small- and medium-sized firms cope with the global financial crisis.
"The quality of business regulation helps determine ...how fast local entrepreneurs will start investing again and how quickly new business can get started," Brook said.
In Hong Kong, it takes five separate procedures over 45 days to register a property, incurring total costs of 5 percent of the property value. In Singapore, it takes only three procedures over five days, with costs just 2.8 percent of the value.
It takes an average 13 months to resolve the bankruptcy of a Hong Kong company. Claimants usually recover 79.8 cents on the dollar.
In Singapore, it takes an average 9 months to close a business, and claimants can usually recover 91.3 cents on the dollar from an insolvent firm.
Singapore was also boosted by regulations that make it the easiest place in the world to employ workers and conduct cross-border trade.
There was an accolade for Hong Kong, though, for its easing of procedures for starting a business and transferring property.
Yet there was more praise for Singapore in the same area, this time for introducing online services to ease the process of starting a business, obtaining a construction permit and transferring property.
China fell three spots in the rankings to 89th. The biggest mover in Asia was Taiwan, which rose 15 places to 46th because recent reforms make it easier to start a business and pay taxes.
