After 10 year on top of the chart, Singapore has lost its crown as the best country in the world to do business. Not many could guess the new champion – New Zealand – a boring but beautiful country where the highly successful “Lord of the Rings” films were made. For the year 2017, World Bank is convinced Singapore should take the second place.
How did New Zealand win the first place as the best country in the world to do business while Venezuela takes the 187th place? The country has gotten rid of the cheque levy, which made paying taxes easier. Overall, to start a business in the Kiwi, there’s only one procedure that takes half a day of processing. That’s awesomely fast considering the global average time is 21 days.
New Zealand, who was at second place last year, also took the top spot when it came to dealing with construction permits, registering property, getting credit, and protecting minority investors. The annual report ranks 190 countries based on 11 sets of indicators such as the ease of starting a business, dealing with construction permits, accessing electricity and obtaining credit.
Singapore ranked second, followed by Denmark, Hong Kong, South Korea, Norway, the United Kingdom, the United States, Sweden, and Macedonia. It was the first time the former Yugoslav Republic broke into the top ten rankings. War-torn Somalia, a new addition to the rankings this year, was the worst-performer, behind Eritrea, Libya, Venezuela and South Sudan.
Brunei Darussalam (#72), Kazakhstan (#35), Kenya (#92), Belarus (#37) and Indonesia (#91) made the biggest improvements in business-friendly reforms. The U.S. dropped to the eighth spot from seventh, while Japan retained its 34th place and China rose to 78th from 84th. India’s ranking was unchanged at 130th.
Paying taxes in the Philippines (#99) now takes only 28 separate payments, versus 48 a decade ago. In Rwanda (#56), the time to register a property transfer has dropped from 370 days a decade ago to 12 days currently. Meanwhile, the time needed to connect to electricity in India (#130) is now about 45 days, versus 138 days in the 2013-14 fiscal year.
Overall, the World Bank said emerging markets made significant progress in terms of reforms undertaken. For example, Brunei increased the reliability of power supply, began distribution of consumer data from utility companies to improve access to credit, and passed a new insolvency law that offered protection for secured creditors.
However, money laundering experts warned that New Zealand is a haven for illegal funds. Earlier this year, New Zealand-registered companies were used to scam Chinese investors out of millions of dollars in a pyramid scheme called “EuroFX”. The leak Panama Papers also showed New Zealand as favourite destination for tax avoidance purposes.
Anyone who wants to stash dirty money in New Zealand just needs a local director (anyone will do), a physical address and $45, and in a few minutes voila, they’ve got just what they want. But if New Zealand is tainted with money laundering activities, how could this country scored better than Singapore, a country which is a highly developed economy and enjoys an open and corrupt-free environment?
Turns out, Singapore is not that clean or innocent after all. Thanks to 1MDB scandal, Singapore is seen as an inefficient financial hub that allows money laundering too. Because of the close relationship between Singapore Prime Minister Lee Hsien Loong and Malaysia Prime Minister Najib Razak, there were rumours that Singapore had chosen to look the other way.
Only after the Wall Street Journal and Swiss authorities trumpeted the 1MDB scandal, a pet project of PM Najib Razak, that Singapore authorities started taking serious actions. Still, Singapore didn’t dare name Najib Razak until today, as compared to U.S.-DOJ who named the Malaysian prime minister as “Malaysian Official 1” in its lawsuits.
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