With no minimum capital requirements, the overall start-up process has been simplified. Launching a business takes five procedures and six days on average. Licensing requirements remain time-consuming, taking over 100 days to complete. Labor regulations are not rigid, and the costs of terminating employment are relatively low. Inflationary pressures have increased, but overall monetary stability has been well maintained.
Business Freedom 78.2
Labor Freedom 72.3
Monetary Freedom 75.4
Business Freedom
Business freedom is an overall indicator of the efficiency of
government regulation of business. The quantitative score is derived
from an array of measurements of the difficulty of starting, operating,
and closing a business. The business freedom score for each country is a
number between 0 and 100, with 100 equaling the freest business
environment. The score is based on 10 factors, all weighted equally,
using data from the World Bank’s Doing Business study:
Each factor is converted to a scale of 0 to 100 using the following equation:
For the six countries that are not covered by the World Bank’s Doing Business report, business freedom is scored by analyzing business regulations based on qualitative information from reliable and internationally recognized sources.
- Starting a business—procedures (number);
- Starting a business—time (days);
- Starting a business—cost (% of income per capita);
- Starting a business—minimum capital (% of income per capita);
- Obtaining a license—procedures (number);1
- Obtaining a license—time (days);
- Obtaining a license—cost (% of income per capita);
- Closing a business—time (years);
- Closing a business—cost (% of estate); and
- Closing a business—recovery rate (cents on the dollar).2
Each factor is converted to a scale of 0 to 100 using the following equation:
Factor Scorei = 50 factoraverage/factori
which is based on the ratio of the country data for each factor
relative to the world average, multiplied by 50. For example, on average
worldwide, it takes 18 procedures to get necessary licenses. Canada’s
14 licensing procedures are a factor value better than the average,
resulting in a ratio of 1.29. That ratio multiplied by 50 equals the
final factor score of 64.5.For the six countries that are not covered by the World Bank’s Doing Business report, business freedom is scored by analyzing business regulations based on qualitative information from reliable and internationally recognized sources.
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