Protection of minority investors and resolving insolvency still remains a huge challenge in the country as Bhutan drops six places to 81st in the 2019 Ease of Doing Business rankings.
The World Bank compiles the report by comparing business regulation for domestic firms in 190 countries. Bhutan’s ranking has slipped for the third year in a row.
Protection of minority investors has affected Bhutan’s overall ranking severely.
Minority investors are the ones who hold less than 50 per cent of the shares and have no voting rights in a company. Bhutan ranks 125 in this parameter with a score of 46.67 out of 100.
The report also looks at how easy it is to start a business, get credit, pay taxes, and import and export procedures.
There are six other parameters with which the rankings are assessed.
Among the ten parameters, Bhutan ranks the best in paying taxes, which puts it at 15th among the 190 countries.
The introduction of online tax filing system, ‘RAMIS’, has made paying taxes easier. “Bhutan made paying taxes easier by introducing an online platform for filing corporate income tax and personal income tax returns,” the report states.
Bhutan ranked 28 among 190 countries in trading across the border parameter. Bhutan’s highest parameter score was recorded in this parameter with 94.25 points out of 100. This means import and export regulations and procedures are easier for Bhutanese businesses.
While importing and exporting are easy, getting credit is not a straight forward task for Bhutanese businesses. Bhutan is ranked 85th in ease of getting credit.
Dealing with construction permits parameter also ranked a lowly 88. The report states, construction permits takes more than five months to get finalized in Bhutan.
The report notes while ranks of 28th among 190 countries in enforcing contracts parameter and 54th for registering property parameter reflect well for Bhutanese business environment, it takes 61 days just to get electricity for a business in Bhutan.
The former government pledged to bring in reforms to take Bhutan into the top 50 of the rankings but this pledge has not translated into action as the rankings suggest.
