So, Portugal is ranked 10th in the world where it is easier to start a new business. Says who?

You might doubt, but we are talking about a serious research here. The World Bank Group has been working on annual reports since 2004. Their latest version, published last October 29th, is the Doing Business 2015: Going Beyond Efficiency. It’s the World Bank Group flagship publication, already in its 12th edition. A series of annual reports measuring the regulations that enhance business activity and those that constrain it.

Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies – Portugal included. The report measures regulations affecting 11 areas of the business life. Ten of these areas are included in this year’s ranking on the ease of doing business:

  • starting a business
  • dealing with construction permits
  • getting electricity
  • registering property
  • getting credit
  • protecting minority investors
  • paying taxes
  • trading across borders
  • enforcing contracts
  • resolving insolvency

The report also uses to measure labor market regulation, but it wasn’t included in this year’s ranking.

Since we already know what we are talking about, let’s check how Portugal was ranked.

Rankings on Doing Business topics - Portugal
Rankings on Doing Business topics – Portugal | Source: Doing Business 2015: Going Beyond Efficiency

The report starts with an aggregate ranking on the ease of doing business, considering all the indicators listed above, where Portugal ranks 25th, a better position than in last year’s report, 31st. While this ranking tells much about the business environment in an economy, it does not tell the whole story. The ranking on the ease of doing business, and the underlying indicators, does not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business.

Portugal kept the same position as last year, 10th in the Starting a Business indicator. Starting a business in Portugal requires only 3 procedures and takes 2.5 days. These are two of the factors that got the country to this position, making it easier to start a company than in the UK, Denmark or Finland. This indicator has New Zealand as best performer.

But while creating a business is apparently simple, maintaining it tells a different story. The two worse indicators for Portugal on this Report were getting credit (89th) and the tax burden (64th). But at least it ranks 10 when it comes to Resolving insolvency.

You can read the full report here: Doing Business 2015: Going Beyond Efficiency

Source: World Bank. 2014. Doing Business 2015: Going Beyond Efficiency. Washington, DC: World Bank. DOI: 10.1596/978-1-4648-0351-2. License: Creative Commons Attribution CC BY 3.0 IGO