Doing Business in Central American Cities

A World Bank study has evaluated regulations which exist in 22 cities in the region for starting new business, registration, construction, and border trade.

Wednesday, February 11, 2015

From a statement issued by the World Bank:

Doing Business in Central America and the Dominican Republic 2015 compares business regulations in 6 Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) and the Dominican Republic. In addition to the capitals, the study collects data related to 15 subnational locations regarding regulations that affect 3 stages in the life of a small to medium-size domestic firm: starting a business, dealing with construction permits and registering property. The study also analyzes the indicator of trading across borders, considering 7 main ports and 3 secondary ports. Moreover, it includes a gender perspective based on the study of laws and regulations that impose differential treatment for women.

Main Findings

There are substantial variations in business regulations and their implementation across countries in the region, and also among cities within the same country.

In each country there are cities with good practices in at least one of the areas measured, while no city excels in all areas.

It is easier to do business in Panama, San Jose de Costa Rica and Guatemala City. In Guatemala, Honduras and the Dominican Republic, there are broad differences among cities. In El Salvador and Nicaragua, the performance is more homogeneous.

Best performing countries in the starting a business area have implemented one-stop shops and online systems but their capitals benefit the most from them. In general, medium-sized cities perform better in dealing with construction permits, the area with more subnational differences. In registering property, variations mainly occur due to national policies, such as the quality of cadastral information or the efficiency of property registries.

In trading across borders, the region is divided into 2 groups: Panama, the Dominican Republic and Costa Rica are among the top 50 economies on the ease of trading across borders, while El Salvador, Guatemala, Honduras and Nicaragua require more time and documents to import and export.
Peer to peer learning, with the support of regional bodies, would promote the convergence towards best practices in the region.

Read more: "Doing Business in Central America and the Dominican Republic".

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