It now takes 40 days (and 7 procedures) to register a business in SA – compared to half a day in New Zealand | Fin24
 
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It now takes 40 days (and 7 procedures) to register a business in SA – compared to half a day in New Zealand

Oct 24 2019 14:40

The World Bank's annual Doing Business survey shows South Africa going down the ranks when it comes to the ease of running a business.

The survey measures countries in terms of starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.

South Africa is now ranked 84th out of 190 countries when it comes to ease of doing business – from 82nd position last year, and a high point of 32nd position in 2008.

It is followed closely by Zambia (85) and Botswana (87).

Of the Brics countries, South Africa outperformed Brazil (in the 124th position), but lagged behind India (63) and China (31).

New Zealand was ranked the easiest place in the world to do business, followed by Singapore, Hong Kong, Denmark, South Korea, US, Georgia and the UK. The World Bank says these countries typically have online business incorporation processes, electronic tax filing platforms, and online procedures for property transfers.

When it comes to starting a business, New Zealand also topped the rankings. It takes just half a day to register a new company in that country – compared to South Africa, where the process takes 40 days.

While New Zealand requires only one step, the World Bank notes that South African entrepreneurs have to complete seven procedures:

  • Reserve the company name at the Companies and Intellectual Property Commission (CIPC) (three days)
  • Register at the CIPC (five days)
  • Open a bank account (one day)
  • Register for income tax and withholding taxes (PAYE, UIF and SDL) with SARS (one day)
  • Register for VAT (seven days)
  • Register the company with the Unemployment Insurance Fund (five days, simultaneous with previous procedure)
  • Register employees with the Compensation Fund (thirty days, simultaneous with previous procedure)

South Africa is now ranked 139 (out of 190 countries) on the ease of starting a business.

The report also found that it takes 155 days to secure a construction permit to build a warehouse in Johannesburg and 23 days to register a property. 

When it comes to trading across the borders, South Africa was ranked 145th, with documentary compliance taking on average 68 hours, while border compliance takes 92 hours.

The ten economies where business climates improved the most were Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, India, and Nigeria, the study found.

Here are South Africa's rankings in different categories:

Compiled by Helena Wasserman

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