Russia has taken its place between Austria and Japan in Doing Business Top 30

Russia has climbed three positions up and has taken 28th place in the World Bank rating Doing Business that evaluates business environment in 190 world countries. Our country is lagging 0.5 points behind Austria that ranks one spot upper (DB score). In addition, Russia scores 0.2 points higher than Japan that over a year has taken a leap of 10 positions right away (having moved from 39th to 29th place of the rating).

Doing Business 2020 list is headed by New Zealand (the first place), Singapore (the second place), and Hong Kong (the third place). The top ten also includes: Denmark, Republic of Korea, United States, Georgia, United Kingdom, Norway, and Sweden.

the 11th through the 20th places have been taken by Lithuania, Malaysia, Mauritius, Australia, Taiwan, the United Arab Emirates, North Macedonia, Estonia, Latvia, and Finland. The third ten includes: Thailand, Germany, Canada, Ireland, Kazakhstan, Iceland, Austria, Russia, Japan, and Spain.

Russia holds the highest position among BRICS partners. China has run a close second to top 30 and has taken 31st place, India ranks 63rd, the Republic of South Africa is 84th, and Brasil ranks 124th.

Our country started advancing in Doing Business from the 124th place in 2011 (after methodology recalculation, the World Bank changed the position held by Russia to the 123rd).

What helped us in terms of advance

Russia managed to enhance its standing in top 30 and improve its position over the last year thanks to the indicators Dealing with Construction Permits (climbing up from the 48th to the 26th place) and Getting Electricity (from the 12th to the 7th place).

"Growth has been ensured by having due regard to the reforms carried out two-three years ago. The building cycle usually lasts at least one-two years and, therefore, developers may fail to 'feel' improvements in laws at once," Director of the “New Business” Direction of the Agency for Strategic Initiatives (ASI) Artem Avetisyan noted.

The World Bank experts took into account the fact that all permits necessary for topographical, geotechnical, and ecological surveys may be obtained in a single procedure, whereby it is not required to appeal to the state institution (Mosgorgeotrest), but rather to get the service in a licensed organization, as in St. Petersburg.

"Land plot development plan includes the information on technical conditions for water connection. Last year, receipt of technical conditions was counted as an individual procedure for us," Artem Avetisyan explained.

The World Bank took into account a reduction in periods for the following procedures:

• Obtaining a land plot development plan – by 2 days from 30 to 28 days
• Obtaining a construction permit – by 2 days for Moscow and 1 day for Saint Petersburg (from 11 and 10 to 9, respectively)
• Notifying a water-pumping enterprise about the completion of construction works – by 0.5 days (electronic service) (from 1 to 0.5)
• Signing a contract with a water-pumping enterprise – by 12 days for Moscow (from 30 to 18). No changes for St. Petersburg.
• Registration of title to a constructed facility – by 5 days for Moscow (from 14 to 9 days) and 18 days for Saint Petersburg (from 30 to 12 days)

With regard to Getting Electricity, the period of grid engineering services was reduced by 32 days in Moscow and 33 days in St. Petersburg. Entrepreneurs need to pass two procedures only: signing the contract and waiting for the completion of construction works and the subsequent connection.

"The so-called "last mile" has been absolutely free of charge for entrepreneurs for two years already. This means that legal entities and individual entrepreneurs have no more need to pay for the construction of power grid facilities from the existing grid to the facility being connected with the maximum power of 150 kW," the representatives of the ASI's “New Business” Direction explained.

What reforms falter

Reforms as to cancellation of the requirement to have a seal for legal entities and certify the application for state registration still remain unaccounted. The World Bank experts rely on persisting business practices. These changes will not affect the position in the rating until entrepreneurs themselves adapt to simplified procedures and stop conducting actions that are non-mandatory from the legal perspective.

In the opinion of the ASI's experts, the accounting of these reforms would enable our country to take seventh place according to the indicator Starting a Business (Business Registration). Over the past two years, Russia has only been losing traction with regard to this indicator: 28th place in Doing Business 2018 (DB 2018), 32nd place in DB 2019, and 40th place in DB 2020.