WASHINGTON – Japan placed 24th place in the latest “ease of doing business” rankings released by the World Bank Group, slipping four places from the previous year, indicating aggressive regulatory reforms are necessary for the country to regain its attractiveness to overseas companies.
The latest annual ranking report, compiled by the group’s International Finance Corp. for 2013 and released Monday, shows Japan lags far behind East Asian rivals such as Hong Kong, which came in second, South Korea, in eighth, and Taiwan in 16th place.
Covering 185 economies, the report measured and tracked regulation changes for domestic small and midsize enterprises and determined the rankings based on indicator sets for benchmark regulations in 10 areas, including starting a business, protecting investors and trading across borders.
Singapore was ranked first, New Zealand secured third place, the United States fourth and Denmark fifth.
Over the last 10 years, efforts on regulatory reforms have been under way on a global scale, with 180 economies implementing close to 2,000 business regulatory reforms based on the “doing business” criteria, the report said.
“These worldwide efforts reduced the average time to start a business from 50 days to 30 and the average cost from 89 percent of income per capita to 31 percent” in the past eight years, it found.
In particular, Eastern Europe and Central Asia “have been consistently active” in implementing reforms, the report said, adding Georgia was the top improver, followed by Rwanda.
The report noted Japan made paying taxes less costly by companies by reducing corporate income tax. But the nation has been “gradually moving down in the rankings while other (rival) countries are pushing ahead with reforms,” said Miki Imai Ollison, a private-sector developing specialist at the World Bank Group.
“Regulatory procedures in Japan such as for starting a business are still complex and time-consuming,” she pointed out.