Thailand had lifted its business ranking to 18th position from 19th last year, Kazi Mattin, head of the World Bank's economic unit in Bang-kok, said at a press conference yesterday during the launch of "Doing Business 2007".

"Thailand's investment climate compares favourably with others in the region. According to a recent survey, however, firms in Thailand not only identified regulatory burdens as a major issue, but also highlighted shortage of skills and infrastructure [road and rail network] as the other two constraints impeding investment and productivity," Matin said.

Thailand is in the top 30 of the world's 175 economies, according to "Doing Business" indicators developed by the World Bank to rank business-friendly economies global-

ly.

Singapore became the most business-friendly economy in the world in 2005-2006, after last year's winner, New Zealand made business licensing more difficult, according to the report released yesterday.

Asian countries ranked across the spectrum, with Malaysia in the 25th position, Taiwan 47th, China 93rd, Vietnam 104th, Philippines 126th and Indonesia 135th.

Contributing to Thailand's higher ranking was an amendment in the law on credit information, which makes it easier for lenders to evaluate the creditworthiness of borrowers, thereby improving access to credit, the World Bank said.

Thailand did well in registering property - land and buildings - and ranked second after Norway, in terms of fewer documents and less time, Matin said.

But the Kingdom did poorly in bench-marking tax payment, owing to too much red tape and higher

tax rates for business. Business has

to make 46 tax payments a year, and

the average time spent on tax payments was 104 hours a year. The total tax rate levied on commercial profit was 40 per cent.

Caralee McLiesh, co-author of the "Doing Business" reports, spoke from Washington via a

video conference. She said Thailand should simplify its

complex tax system to provide a better business environment. More online tax payment should be introduced to service taxpayers, she recommended.

Matin said that import and export procedures were also time consuming.

Importers spend an average of 22 days in Customs procedures while exports take an average of 24 days to get Customs clearance. Importers in Singapore take just three days for Customs clearance, while Estonia takes only three days handling goods exports.

Corporate governance remains weak in Thailand. Matin said Thailand's investor protection index was six, significantly lower than New Zealand's 9.7 which was the top.

And it's not easy to start a business here. There are eight procedures and it takes 33 days to set up and register a new company.

The World Bank surveyed 1,385 firms in Thailand and 13,847 workers in the Northeast, North, South, East, and Central regions, as well as Bangkok.

It listed 10 factors to measure how easy everyday business can be: the process of starting it, dealing with licences, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

The survey is based on research of laws and regulations, with input and verification from local government officials, lawyers, business consultants, accountants and other professionals routinely administering or adding vision to legal and regulatory requirements. The Bank says this methodology offers several advantages.

Wichit Chaitrong

The Nation