Business Climate Analysis

Aubert Maxime ID : 260856838                                                                           BUSA-356 Section 2

Business Climate Analysis

For this Analysis I decided to take Tunisia. First, an important point to highlight is that in Tunisia men and women that are doing business are treated equally. By looking at the Ranking we see that Tunisia is ranked the 80th country for doing business in 2019 with 66.11 point which is an improve of 1.51 % compare to 2018. The factors that have mainly participated in this improvement are the ease of starting a business, the protection of the minority investors and the paying taxes component. We will now focus on these 3 categories.

        Firstly, let’s look deeper into the “starting a business category”: this category has increased by 6.93 points and Tunisia is now the 63th country to start a business. To start a Limited Liability Company in Tunisia you need 0 TND and you need 6 procedures to register a firm which is lower compare to the other Middle East & North African countries (7.2 for men and 7.9 for women). Moreover, the period to start is shorter with 8 days compare to around 21 for Middle East & North African countries and 9.3 for OECD higher income countries. The cost is also relatively lower, with 4.3% of income per capita for men and women, compare to others Middle East & North African countries (22.6 %). Finally, the entrepreneur must deposit 0% of the income per capita in the bank before and up to 3 months following incorporation which is literally anything compare to the other Middle East & North African countries (8.1%) and OECD higher income countries (8.6%).

        Secondly, the other important factor is the “protection of the minority investors”. Indeed, the protection of the minority investors has increased by 5.00 points compare to 2018. For the indicators in this category Tunisia is especially doing well for the extent of director liability index with 7.0 points which is better than the middle east & north Africa countries (4.7 points) and the OECD high income countries (5.3 points). It is also doing well for the extent of corporate transparency index with 7.0 points too that is better than Middle east & north Africa countries (5.8 points). However, Tunisia is not really doing good in the extent of ownership and control index with only 4.0 points whereas Middle east and north Africa countries have 4.7 and OECD high income 5.4.

Thirdly, the factor that has also known a great improve is the paying taxes topic, the reforms taken in this area has improved this component of 2.11 %. The indicators in which Tunisia is especially good are the number of payments per year (8 compare to 17.7 and 11.2 for the Middle East and North Africa countries and the OECD high income respectively) and the times it takes to prepare, file and pay the taxes (144 hours compare to 196.7 and 159.7 hours for the middle east & North Africa  and OECD high income countries respectively).

        Finally, for the other categories Tunisia succeeded in increase some of them slightly like Dealing with the construction permits (+0.43), Getting electricity (+0.14) and Registering Property (+0.85). However, Tunisia has known a very small decrease in resolving Insolvency (-0.34) but nothing dramatic. For the other topics: Getting credit, trading across borders and enforcing contracts there was no change compare to 2018. Thus, Tunisia ranked better in 2019 and better than its regional average (58.3 points) but it still should make improvements in the future.

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