Rio de Janeiro, July 26, 2006 –
Brazilian cities vary significantly in the ease of doing business, according
to the new Doing
Business in Brazil report,
launched today in Rio de Janeiro.
The report covers five areas of business regulation – starting a business,
registering property, obtaining credit, paying taxes, and enforcing a contract
– across 13 cities: Belo Horizonte, Minas Gerais; Brasília, Federal District;
Campo Grande, Mato Grosso do Sul; Cuiabá, Mato Grosso; Florianópolis, Santa
Catarina; Fortaleza, Ceará; Manaus, Amazonas; Porto Alegre, Rio Grande
do Sul; Porto Velho, Rondônia; Rio de Janeiro, Rio de Janeiro; Salvador,
Bahia; São Luís, Maranhão; and São Paulo, São Paulo.
Varying state- and municipal-level regulatory requirements, as well as
differences in the implementation of national-level regulations, can either
enhance or constrain local business activity. The report finds that state
and city level reforms are becoming increasingly important in a globalized
world, where cities, as much as countries, compete for investment – e.g.,
São Paulo competes with Shanghai rather than Brazil with China.
“Creating jobs is a priority for any government, especially in Latin America,
where many people work in the informal sector. Doing more to ease regulation
and establish a favorable business environment for entrepreneurs is key
to creating more jobs – and equitable growth," said Mierta Capaul,
the lead author of Doing Business in Brazil. “The Brazilian
government and many state and municipal governments have recently undertaken
reforms that make it easier to do business. This report suggests areas
where further reforms are possible.” Capaul added.
Reforms also expand the reach of regulation by bringing businesses and
employees into the formal sector, thus reducing informality, which is widespread
in Brazil’s economy.
The main report findings are:
- Complying with business regulations
is easiest in Brasilia, followed by Manaus, and most onerous in Fortaleza.
Low income is not a barrier to good regulation: São Luís in Maranhão, which
has the lowest income per capita of the states in which cities were evaluated,
ranks 5th among the 13 cities in the overall ease of doing business.
- The report also looks at how the Brazilian
cities compare with other cities globally, providing another perspective
on the time it takes to start a business. São Paulo ranks 149 out
of 155 major cities, whereas Belo Horizonte, the Brazilian city with the
fastest time to start a business, ranks 30th.
- When compared with a similar subnational
study in Mexico, Brazilian cities perform better when it comes to the cost
of registering property. But despite identical regulations across
Brazil, there is a wide variation in the time it takes to transfer property.
In São Luís an entrepreneur spends less than a month to register property,
while in Campo Grande and Salvador the entrepreneur needs almost three
months to do this.
- In Belo Horizonte it takes a mere two
days to create and register collateral, as compared to 45 days in
Brasilia. In Rio de Janeiro, an entrepreneur spends 0.2% of the loan value
to register a security right, while in Fortaleza it costs 3.8% of the value
of the loan - much higher than the state average of 1.7%.
- The tax burden is heavy in Brazil,
both in terms of tax rates and administrative complexities: businesses
in Rio de Janeiro have one of the highest tax burdens in the world.
- The city where it is easiest to enforce
a contract is São Paulo, at 18 months. By contrast, in Campo Grande,
contract enforcement takes over 4 years.
The report finds a gap between Brazil’s
best performer (Brasilia) and the ease of doing business in other world
cities such as Bangkok or Shanghai. But reforms are underway – state and
city officials are taking measures to simplify procedures, share information
among agencies, and introduce online processes. Cities and states can look
for best practice reforms within Brazil, while also learning from reforms
in other countries, such as Egypt, New Zealand, and Spain.
|Doing business in Brazil: where is it
4Porto Velho, Rondônia
5São Luís, Maranhão
6Porto Alegre, Rio
Grande do Sul
7Campo Grande, Mato
Grosso do Sul
8Rio de Janeiro,
Rio de Janeiro
11São Paulo, São
12Cuiabá, Mato Grosso
This report is the second of its kind to be issued in Latin America –
following the release of Doing
Business in Mexico last
year. The subnational report in Mexico showed that the pressure to reform
is even larger if comparisons are made within a country. And as the news
about reforms spreads, there will be increased public interest in replicating
success stories throughout Brazil.
Business in Brazil
is a World Bank Group production cofinanced by United States Agency
for International Development (USAID), with support from Movimento Brasil
Competitivo (MBC). It creates quantitative indicators on business
regulations and their enforcement for 13 cities and states in Brazil.
For more information, please contact:
In Brazil: Karina Manasseh + 55-11-5185-6881,
In Washington, D.C.: Nadine Ghannam
+1 (202) 458-0482, e-mail:email@example.com
- For more information on the Doing
Business report series, please visit: www.doingbusiness.org
- For copies of the Doing Business in
Brazil report, please visit: