Author: karina nappi / agencies

Source: DCI - São Paulo / SP - 08/07/2010

SÃO PAULO - Brazil is the fourth most difficult country for a foreigner to open a company, according to a survey released by the World Bank. According to the Investing Across Borders 2010 study on foreign investment in 87 countries, in the country it is necessary to wait 166 days and complete 17 procedures to open a company.

The World Bank's analysis of the laws and regulations affecting foreign investment is divided into four main criteria: specific restrictions on foreign capital, the process of starting a business, access to land for industrial use and arbitration regimes.

Among the countries evaluated, only Angola (263 days), Haiti (212) and Venezuela (179) have longer processes for opening companies by foreigners. While the fastest countries are Rwanda and Georgia (4 days), Canada (6 days) and Afghanistan, Albania (7 days). The average of the countries surveyed is 42 days of waiting to open a business.

In the assessment by sectors that have the greatest brake on foreign participation are air transport and the media. In these sectors, foreign participation is restricted to a maximum of 20% and 30% of the companies' capital, respectively. And the health sector is closed to the participation of foreign capital, recalls the report. Despite these restrictions, the study concludes that, in general terms, Brazilian legislation guarantees equal treatment for domestic and foreign companies.

Facility index

Despite the time it takes to open a company, Brazil is in a better position when it comes to the ease of establishing the company. This index takes into account the regulatory regime for starting business. Brazil has 62,5 points on a scale ranging from 0 (most difficult) to 100 (easiest). The country is below the global averages, 64,5 points, and Latin America and the Caribbean, 62,8 points.

In the survey ranking, the place that offers the greatest facility for opening companies by foreigners is Slovakia, which received an index of 92,1, followed by Romania (89,5) and Great Britain and Poland, both with 85.

The country considered most difficult for foreign companies to open companies is Ethiopia, with an index of 21,1. Ghana had a rating of 34,2, and Saudi Arabia, 35.

Among the BRIC countries (Brazil, Russia, India and China), the fastest is Russia, in which the foreigner who wants to have a global business needs only 10 documents and 31 days of waiting and an ease index of 68,4, 76,3 points. The easiest is India, with an index of 46 points; the term is also the second shortest in the group, 18 days. China, in turn, requires 99 documents for a foreigner to open a company and make the investor wait 63,7 days; the country's ease index is XNUMX points.

According to the World Bank, “backward and very restrictive” laws are an obstacle to foreign direct investment.

For the professor at Trevisan Escola de Negócios, Irani Cavagnoli, Brazil has to attract especially risky capital, which is permanent. “We need to generate income and jobs, which are essential for economic development. The high Brazilian bureaucracy makes the presence of new companies in Brazil difficult. Our legislation is very complex. During the crisis we attracted the attention of the world, but we certainly missed many opportunities with companies due to this bureaucratic delay. We have to reach the average of 30 days, that should be our goal. Reducing bureaucracy is the main point that must be observed ”, he stresses.

"Clear and effective laws and regulations are vital to guarantee the best results for countries that receive investments, for their citizens and for investors themselves", points out the international report.

The general conclusion of the report is that the countries most closed to foreign investment have a higher incidence of corruption and a significant political risk, allied to the fragility of their governance structures. Conversely, countries with positive marks in the indicators defined by the World Bank, manage to attract higher levels of foreign investment.

“All difficulties are solved by politics”, he concludes.