About the Doing Business Project
The Doing Business Project of the World Bank Group provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. Launched in 2002, it looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle.
Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 190 economies—from Afghanistan to Zimbabwe—and over time. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy.
In addition, Doing Business offers detailed subnational studies, which exhaustively cover business regulation and reform in different cities and regions within a nation. These studies provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked.
About Doing Business 2020
Doing Business 2020 is the 17th in a series of annual studies measuring the regulations that enhance business activity and those that constrain it. The first Doing Business study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study covers 12 indicator sets and 190 economies. Ten of these areas—starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency—are included in the ease of doing business score and ease of doing business ranking. Doing Business also measures regulation on employing workers and contracting with the government, which are not included in the ease of doing business score and ranking. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world.
By documenting changes in regulation in 12 areas of business activity in 190 economies, Doing Business analyzes regulation that encourages efficiency and supports freedom to do business. The data collected by Doing Business address three questions about government. First, when do governments change regulation with a view to developing their private sector? Second, what are the characteristics of reformist governments? Third, what are the effects of regulatory change on different aspects of economic or investment activity? Answering these questions adds to our knowledge of development.
Data in Doing Business 2020 are current as of May 1, 2019.
• Doing Business captures 294 regulatory reforms implemented between May 2018 and May 2019. Worldwide, 115 economies made it easier to do business.
• The economies with the most notable improvement in Doing Business 2020 are Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, India and Nigeria. In 2018/19, these countries implemented one-fifth of all the reforms recorded worldwide.
• Economies in Sub-Saharan Africa and Latin America and the Caribbean continue to lag in terms of reforms. Only two Sub-Saharan African economies rank in the top 50 on the ease of doing business; no Latin American economies rank in this group.
• Doing Business 2020 continues to show a steady convergence between developing and developed economies, especially in the area of business incorporation. Since 2003/04, 178 economies have implemented 722 reforms captured by the starting a business indicator set, either reducing or eliminating barriers to entry.
• Those economies that score well on Doing Business tend to benefit from higher levels of entrepreneurial activity and lower levels of corruption.
• While economic reasons are the main drivers of reform, the advancement of neighboring economies provides an additional impetus for regulatory change.
• Twenty-six economies became less business-friendly, introducing 31 regulatory changes that stifle efficiency and quality of regulation.
Economy Profile of Bulgaria
Bulgaria is one of the few economies worldwide that haven’t implemented any significant reform between May 2018 and May 2019. Her position in the Doing Business 2020 Rank is 61, while in the Doing Business 2019 Rank it was 59. The Doing Business 2020 score of Bulgaria is 72, while the Doing Business 2019 Score was 71.24. That means that Bulgaria marks a minor advancement in her Doing Business Score, but other economies have performed better and her Doing Business Rank has lowered in general.
In each of the 10 indicators — starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency, Bulgaria has performed in different way.
1. Starting a business – the Doing Business 2020 Rank of Bulgaria is 113, while in the Doing Business 2019 Rank it was 99. The Doing Business 2020 score is 85.4 (of 100 maximum), while the Doing Business 2019 Score was 85.38.
2. Dealing with construction permits – the Doing Business 2020 Rank of Bulgaria is 43, while in the Doing Business 2019 Rank it was 37. The Doing Business 2020 score is 75.9, while the Doing Business 2019 Score was 75.46.
3. Getting electricity – the Doing Business 2020 Rank of Bulgaria is 151, while in the Doing Business 2019 Rank it was 147. The Doing Business 2020 score is 55.1, while the Doing Business 2019 Score was 54.93. This is the indicator Bulgaria performs worst.
4. Registering property – the Doing Business 2020 Rank of Bulgaria is 66, while in the Doing Business 2019 Rank it was 67. The Doing Business 2020 score is 69.8, while the Doing Business 2019 Score was 69.32.
5. Getting credit – the Doing Business 2020 Rank of Bulgaria is 67, while in the Doing Business 2019 Rank it was 60. The Doing Business 2020 score is 65.0, the Doing Business 2019 Score was 65.0 too.
6. Protecting minority investors – the Doing Business 2020 Rank of Bulgaria is 25, while in the Doing Business 2019 Rank it was 33. The Doing Business 2020 score is 74, while the Doing Business 2019 Score was 68.33.
7. Paying taxes – the Doing Business 2020 Rank of Bulgaria is 97, while in the Doing Business 2019 Rank it was 92. The Doing Business 2020 score is 72.3, while the Doing Business 2019 Score was 72.0.
8. Trading across borders – the Doing Business 2020 Rank of Bulgaria is 21, in the Doing Business 2019 Rank it was 21 too. The Doing Business 2020 score is 97.4 (of 100), the Doing Business 2019 Score was 97.41 too. This is the indicator Bulgaria performs best.
9. Enforcing contracts – the Doing Business 2020 Rank of Bulgaria is 42, in the Doing Business 2019 Rank it was 42 too. The Doing Business 2020 score is 67.0, the Doing Business 2019 Score was 67.04.
10. Resolving insolvency – the Doing Business 2020 Rank of Bulgaria is 61, while in the Doing Business 2019 Rank it was 56. The Doing Business 2020 score is 57.8, while the Doing Business 2019 Score was 57.52.
The Doing Business respondents
More than 48,000 professionals in 190 economies have assisted in providing the data that inform the Doing Business indicators over the past 17 years. Doing Business 2020 draws on the inputs of more than 15,000 professionals. The Doing Business website shows the number of respondents for each economy and each indicator set. Selected on the basis of their expertise in these areas, respondents are professionals who routinely administer or advise on the legal and regulatory requirements in the specific areas covered by Doing Business.Because of the focus on legal and regulatory arrangements, most of the respondents are legal professionals such as lawyers, judges, or notaries.
In addition, officials of the credit bureau or registry complete the credit information questionnaire. Accountants, architects, engineers, freight forwarders, and other professionals answer the questionnaires related to paying taxes, dealing with construction permits, trading across borders, and getting electricity. Certain public officials (such as registrars from the company or property registry) also provide information that is incorpo-rated into the indicators.The Doing Business approach is to work with legal practitioners or other professionals who regularly undertake the transactions involved. Following the standard methodological approach for time-and-motion studies, Doing Business breaks down each process or transaction, such as starting a business or registering a property into separate steps to ensure a better estimate of time. The time estimate for each step is given by practitioners who have significant and routine experience in the transaction.
The contributors from Bulgaria include practitioners from the leading law firms as well as officers from certain Bulgarian institutions. In particular, my contribution was for delivering information for measuring two indicators in Bulgaria – enforcing contracts and resolving insolvency.
Enforcing contracts in Bulgaria.
The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processesindex, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system.
According to the study the entire process of enforcing contracts in Bulgaria lasts 564 days, of which 105 for filing and service, 334 for trial and judgment and 125 for enforcement of judgment. Comparatively, the average time for Europe & Central Asia is 496.4 days, in Greece is 1711 days, in Romania is 512 days, in Serbia is 622 days, and in North Macedonia is 635 days.
The cost (% of claim value) in Bulgaria is 18.6%, including 10% for attorney fees, 5.6% for court fees and 3% for enforcement fees. Comparatively, the average cost for Europe & Central Asia is 26.6%, in Greece is 22.4%, in Romania is 25.8%, in Serbia is 39.6%, and in North Macedonia is 28.6%. That means that Bulgaria has comparatively low costs for judicial procedures and enforcement, measured as % of the claim value.
The quality of judicial processes index in Bulgaria is 10.5 (of maximum 18), including index of 2.5 for alternative dispute resolution (of maximum 3), index of 2.5 for case management (of maximum 6), index of 2 for court automation (of maximum 4), and index of 3.5 for court structure and proceedings (of maximum 5). Comparatively, the quality of judicial processes index for Europe & Central Asia is 10.3, for Greece is 12.5, for Romania is 14, for Serbia is 13.5, and in North Macedonia is 13.
The judicial processes index of Bulgaria can be improved if a small claims court or a fast-track procedure for small claims is settled, if the law regulates the maximum number of adjournments that can be granted, if there are electronic case management tools in place within the competent court for use by judges and by lawyers, if the initial complaint can be filed electronically through a dedicated platform within the competent court, if it is possible to carry out service of process electronically for claims filed before the competent court. Many of these problems could be resolved when the electronic system of the courts starts effectively.
Resolving Insolvency in Bulgaria.
The Doing Bulsiness studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019.
According to the study the entire process of the insolvency procedure in Bulgaria lasts 3.3 years. Comparatively, the average time for Europe & Central Asia is 2.3. years, in Greece is 3.5 years, in Romania is 3.3 years too, in Serbia is 2.0 years, and in North Macedonia is 1.5 years.
The estimated recovery rate (cents on the dollar) in Bulgaria is 37.7, while in for Europe & Central Asia is 38.5, in Greece is 32.0, in Romania is 34.4, in Serbia is 34.5, and in North Macedonia is 48.0. Comparatively, the average recovery rate in Norway is 92.9.
The estimated cost (% of estate) in Bulgaria is 9.0 %, while in Europe & Central Asia is 13.3 %, in Greece is 9.0 % too, in Romania is 10.5 %, in Serbia is 20.0 %, and in North Macedonia is 10.0 %. Again Bulgaria has comparatively low costs for insolvency procedures, measured as % of the estate, but comparing with Norway, where the cost is 1.0% and has the highest recovery rate, in Bulgaria the cost is high.
The Strength of insolvency framework index of Bulgaria is 12.0 (of maximum 16), while in Europe & Central Asia is 11, in Greece is 10.5, in Romania is 13, in Serbia is 15.5, and in North Macedonia is 15. Comparing with the other Balkan countries, Bulgaria has lower Management of debtor’s assets sub-index – 3.0 (of maximum 6), medium Commencement of proceedings sub-index – 2.5 (of 3 maximum), very high Creditor participation sub-index – 4 (of 4 maximum), and medium Reorganization proceedings sub-index – 2.5 (of 3 maximum).
The Strength of insolvency framework index of Bulgaria can be improved if the insolvency framework allows the continuation of contracts supplying essential goods and services to thedebtor, provides for the possibility of the debtor obtaining credit after commencement ofinsolvency proceedings, assigns priority to post-commencement credit.
About the Doing Business Project