Doing Business 2013

27th of July 2013

Doing business 2013

Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations.

Economy overview of Russia:Region: Eastern Europe & Central Asia, Income category: Upper middle income, Population: 141,930,000, GNI per capita (US$): 10,400, DB 2013 rank: 112, DB 2012 rank: 118 \

Taking into consideration the business environment Russia ranks 101 in starting business, 178 in dealing with construction permits, 184 – getting electricity, 46 – registering property, 104 – getting credit, 117 – protecting investors, 64 – paying taxes, 162 – trading across borders, 11 – enforcing contracts, 53 - resolving insolvency.

What concerns starting a business, according to the survey, Russiadidn’t make it easier to start a new business in 2008-2013.

According to data collected by Doing Business, dealing with construction permits in Russia requires 42 procedures, takes 344 days and costs 129.2% of income per capita. For example, in 2006 dealing with construction permits in Russia required 61 procedure, took 642 days and cost 526.9% of income per capita. Globally, Russian Federation stands at 178 in the ranking of 185 economies on the ease of dealing with construction permits. What concerns reforms in this sphere, in 2008 Russiamade dealing with construction permits more expensive by increasing the cost, and at the same time implemented several laws that reduces steps and time to obtain a construction permit. In 2011 Russia eased construction permitting by implementing a single window for all procedures related to land use. In 2013 Russiamade obtaining a construction permit simpler by eliminating requirements for several preconstruction approvals.

According to data collected by Doing Business, getting electricity in Russiarequires 10 procedures, takes 281 days and costs 1573.7% of income per capita. Globally,Russian Federationstands at 184 inthe ranking of 185 economies on the ease of getting electricity. In 2012 Russia made getting electricity less costly by revising the tariffs for connection.

According to data collected by Doing Business, registering property in Russiarequires 5 procedures, takes 44 days and costs 0.2% of the property value. Globally,Russian Federationstands at 46 inthe ranking of 185 economies on the ease of registering property. In 2010 Russia sped up the process of registering property by introducing new documentation requirements such as cadastral passports in lieu of inventory documents and cadastral maps. In 2012 Russiamade registering property transfers easier by eliminating the requirement to obtain cadastral passports on land plots.

Globally, Russian Federationstands at 104 inthe ranking of 185 economies on the ease of getting credit. A private bureau, National Bureau of Credit Histories (NBKI), started operations in March 2006. A draft of the law dates back to 1992, but only increased consumer lending and the requirement for banks to submit credit data, made the reform possible. In 2009-2013 Russia didn’t make it easier to get a credit.

The economy has a score of 4.7 on the strength of investor protection index. Globally, Russian Federation stands at 117 in the ranking of 185 economies on the strength of investor protection index. Russia did not strengthen investor protections in 2008-2013.

On average, in Russia firms make 7 tax payments a year, spend 177 hours a year filing, preparing and paying taxes and pay total taxes amounting to 54.1% of profit. Globally, Russian Federationstands at 64 inthe ranking of 185 economies on the ease of paying taxes. In 2010 Russia eased the tax burden on companies by reducing the corporate income tax rate from 24% to 20%. In 2012 Russiaincreased the social security contribution rate for employers. In 2013 Russia eased the administrative burden of taxes for firms by simplifying compliance procedures for value added tax and by promoting the use of tax accounting software and electronic services.

According to data collected by Doing Business, exporting a standard container of goods requires 8 documents, takes 21 days and costs $2820. Importing the same container of goods requires 11 documents, takes 36 days and costs $2920. Globally, Russian Federationstands at 162 inthe ranking of 185 economies on the ease of trading across borders. In 2012 Russia made trading across borders easier by reducing the number of documents needed for each export or import transaction and lowering the associated cost.

According to data collected by Doing Business, enforcing a contract takes 270 days, costs 13.4% of the value of the claim and requires 36 procedures. Globally, Russian Federation stands at 11 in the ranking of 185 economies on the ease of enforcing contracts. In 2012 Russia made filing a commercial case easier by introducing an electronic case filing system.

According to data collected by Doing Business, resolving insolvency takes 2.0 years on average and costs 9% of the debtor’s estate, with the most likely outcome being that the company will be sold as piecemeal sale. The average recovery rate is 43.4 cents on the dollar. Globally, Russian Federationstands at 53 inthe ranking of 185 economies on the ease of resolving insolvency. In 2010 Russiaintroduced several changes to its insolvency law to speed up the liquidation procedure and strengthen the legal status of secured creditors. In 2011 Russia introduced a series of legislative measures in 2009 to improve creditor rights and the insolvency system.

In 2012 Russian Federation did not make any changes in employing workers.