Doing Business, a project that provides objective measures of business regulations and enforcement, recently posted a summary of their 2015 report. In it, Sri Lanka – that is to say, Colombo – was ranked no.99 out of 189 economies. Given the wave of startups that are coming up and expected to appear (most of them in the tech industry), there’s some useful information this report.
Of most importance is the Starting a Business index. With regards to the rest of South Asia, Sri Lanka has a slightly number of procedures to go through (9 as opposed to 7.9) and a higher cost of starting a business: however, it apparently takes less time here here than the regional average.
All of this adds up to a DB 2015 rank of 104 – down four points from last year, and not very flattering. This is based on postulations as well as hard data, so while the statistics are a good general indicator of the situation, they’re not ideal – in Sri Lanka, for instance, the sample space is just Colombo. For those interested in starting a company, the country has quite a few attractions – chief among them reduced operating costs and an educated labour pool (which explains the Silicon Valley companies working out of Sri Lanka).
However, for those starting a company, the report may serve as a guide. Here’s their list of what has to be done to get a startup registered in the Pearl of the Indian Ocean:
|Procedure||Time to Complete|
|1||Reserve a unique company name||2 days|
|2||The company secretary and director sign a consent||1 day|
|3||Register at the Department of the Registrar of Companies||2 days|
|4||Public Notice of Incorporation||3 days|
|5||Register with the tax authorities and obtain a Tax Identification Number (TIN) from Taxpayer Services Unit of Inland Revenue Department||1 day (simultaneous with procedure 4)|
|6||Register for VAT with the Inland Revenue Department VAT Registration Branch||1 day (simultaneous with previous procedure)|
|7||Payment of stamp duty on the issued shares at Stamp Duty Branch of Inland Revenue Department||1 day (simultaneous with previous procedure)|
|8||Give notice to the Department of Registrar of Companies regarding the issue of shares||1 day (simultaneous with previous procedure)|
|9||Register with the Department of Labor and obtain the EPF number||1 day (simultaneous with procedure 4)|
Calculating off the costs stated on the report, all of this adds up to Rs 29,520 plus 0.5% of the total capital stated.
In contrast to Sri Lanka’s 99, Singapore has the number 1 slot of the Doing Business 2015 index, with New Zealand, Hong Kong, Denmark, Korea, Norway, the US and the UK following in short order. Out of these, New Zealand is ranked as the easiest place to start a business. Mumbai and Delhi make India number 142 when it comes to ease of doing business and 158 when it comes to starting up a business – we’re a over forty countries ahead in both scores.
To explore the data further, head over to http://www.doingbusiness.org/data/exploreeconomies/sri-lanka