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COMPARING REGULATION IN 21 CITIES AND 183 ECONOMIES COMPARING REGULATION IN 21 CITIES AND 183 ECONOMIES A PUBLICATION OF THE WORLD BANK AND THE INTERNATIONAL FINANCE CORPORATION THE INTERNATIONAL WORLD BANK AND THE OF A PUBLICATION ©2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, D.C. 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved A publication of the World Bank and the International Finance Corporation This volume is a product of the staff of the World Bank Group. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank Group does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. 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Doing Business in Colombia 2010 and other subnational and regional Doing Business studies can be downloaded at no charge at http://subnational.doingbusiness.org Additional copies of the Doing Business global reports: Doing Business 2010: Reforming through Difficult Times, Doing Busi- ness 2009, Doing Business 2008, Doing Business 2007: How to Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth and Doing Business in 2004: Understanding Regulations, may be obtained at www. doingbusiness.org About the Investment Climate Advisory Services of the World Bank Group The Investment Climate Advisory Services of the World BankGroup helps governments implement reforms to improve their business environment, and encourage and retain investment, thus fostering competitive markets, growth and job creation. Funding is provided by the World Bank Group (IFC, MIGA, and the World Bank) and over fifteen donor partners working through the multi-donor FIAS platform. Contents Doing Business in Colombia 2010 is the together with the National Depart- About Doing Business and second subnational report of the Doing ment of Planning and the Ministry of Doing Business in Colombia 1 Business series in Colombia. In 2007, Trade, Industry and Tourism and are Overview 7 quantitative indicators on business regu- the following: Armenia (Quindío), Bar- Starting a business 14 lations were created for 13 cities and ranquilla (Atlántico), Bogotá (Distrito Dealing with construction permits 19 departments. This year,Doing Business Capital), Bucaramanga (Santander), Cali Registering property 24 in Colombia 2010 expands the analysis (Valle del Cauca), Cartagena (Bolívar), to a total of 21 cities and documents Cúcuta (Norte de Santander), Ibagué Paying taxes 29 progress in the 13 cities previously mea- (Tolima), Manizales (Caldas), Medellín Trading across borders 34 sured. The data for Bogotá and the rest (Antioquia), Montería (Córdoba), Neiva Enforcing contracts 39 of the world are based on the indica- (Huila), Pasto (Nariño), Pereira (Risa-Risa- tors in Doing Business 2010: Reforming ralda), Popayán (Cauca), Riohacha (La Data notes 44 through Difficult Times, the seventh in Guajira), Santa Marta (Madgalena), Sin- a series of annual reports published by celejo (Sucre), Tunja (Boyacá), Valledu- Doing Business indicators 51 the World Bank and the International par (Cesar), Villavicencio (Meta). Regu- Indicator details 54 Finance Corporation. The indicators in lations affecting six stages of the life of a Paying taxes Doing Business in Colombia 2010 are also business are measured at the subnational Trading across borders comparable with the data in other subna- level in Colombia: starting a business, Enforcing contracts tional Doing Business reports. All Doing dealing with construction permits, reg- List of procedures 58 Business data and reports are available at istering property, paying taxes, trading Starting a business 58 http://subnational.doingbusiness.org. across borders and enforcing contracts. Dealing with construction permits 83 Doing Business investigates the reg- These indicators have been selected be- Registering property 104 ulations that enhance business activity cause they cover areas of local juris- Acknowledgments 121 and those that constrain it. The cities diction or practice. The data inDoing and departments covered in Doing Busi- Business in Colombia 2010 are current as ness in Colombia 2010 were selected of July 2009. About Doing business regulation and institutions can petitiveness Council. Such collaboration support economic adjustment. Easy is part of the World Bank Group’s vision Business and entry and exit of firms, and flexibility of promoting the transfer of knowledge, in redeploying resources, make it easier in this case the project methodology for Doing Business to stop doing things for which demand Doing Business in Colombia. has weakened and to start doing new in Colombia things. Clarification of property rights WHAT DOING BUSINESS and strengthening of market infrastruc- IN COLOMBIA 2010 COVERS ture (such as credit information and collateral systems) can contribute to con- Doing Business in Colombia 2010 provides fidence as investors and entrepreneurs a quantitative measure of the national, look to rebuild. department and municipal regulations Until very recently, however, there for starting a business, dealing with con- were no globally available indicator sets struction permits, registering property, for monitoring such microeconomic fac- paying taxes, trading across borders, and tors and analyzing their relevance. The enforcing contracts—as they apply to In 1664 William Petty, an adviser to first efforts, in the 1980s, drew on per- domestic small and medium-sized en- England’s Charles II, compiled the first ceptions data from expert or business terprises. known national accounts. He made 4 surveys. Such surveys are useful gauges A fundamental premise of Doing entries. On the expense side, “food, hous- of economic and policy conditions. But Business is that economic activity re- ing, clothes and all other necessaries” their reliance on perceptions and their quires good rules. These include rules were estimated at £40 million. National incomplete coverage of poor countries that establish and clarify property rights income was split among 3 sources: £8 constrain their usefulness for analysis. and reduce the costs of resolving disputes, million from land, £7 million from other TheDoing Business project, launched rules that increase the predictability of personal estates and £25 million from 8 years ago, goes one step further. It looks economic interactions and rules that labor income. at domestic small and medium-sized provide contractual partners with core In later centuries estimates of coun- companies and measures the regulations protections against abuse. The objective try income, expenditure and material applying to them through their life cycle. is: regulations designed to be efficient, to inputs and outputs became more abun- Doing Business and the standard cost be accessible to all who need to use them dant. But it was not until the 1940s that model initially developed and applied in and to be simple in their implementa- a systematic framework was developed the Netherlands are, for the present, the tion. Accordingly, some Doing Business for measuring national income and ex- only standard tools used across a broad indicators give a higher score for more penditure, under the direction of British range of jurisdictions to measure the regulation, such as stricter disclosure re- economist John Maynard Keynes. As the impact of government rule-making on quirements in related-party transactions. methodology became an international business activity.1 Some give a higher score for a simplified standard, comparisons of countries’ fi- Doing Business in Colombia 2010 way of implementing existing regulation, nancial positions became possible. Today is the second subnational report of the such as completing business start-up the macroeconomic indicators in na- series in Colombia. In 2007, quantita- formalities in a one-stop shop. tional accounts are standard in every tive indicators were compiled regarding Doing Business in Colombia 2010 country. regulations on business activity and their encompasses 2 types of data. The first Governments committed to the eco- enforcement in 13 Colombian cities and come from readings of laws and regula- nomic health of their country and op- departments. Doing Business in Colom- tions. The second are time and motion portunities for its citizens now focus on bia 2010 expands the analysis to a total indicators that measure the efficiency more than macroeconomic conditions. of 21 cities and documents progress in in achieving a regulatory goal (such as They also pay attention to the laws, regu- the 13 cities