Regulatory climate sets the stage
Even in India's neighbourhood, the Bangladesh Better Business Forum was set up in 2007 in response to low business confidence, regulatory uncertainty, bureaucratic bottlenecks and barriers to businesses. With 41 members (20 public and 21 private) and chaired by the prime minister, the forum has five working groups, including one on business entry and operations. The forum has so far proposed 249 recommendations, of which 113 were approved.
Unctad says in many developing countries a significant part of the economy remains in the informal sector, and the size of which is determined by the quality of the legal framework, more precisely company entry costs and regulatory burden, including corruption and financial constraints. Breaking down these hurdles promotes formal entrepreneurship.
Often, procedures for start-ups can be abolished without any negative side effects. Three measures have shown to be particularly successful in this regard: (i) systematic procedures to review and cut business start-up requirements in terms of number of licences, procedures, and administrative fees; (ii) the introduction of fast-track mechanisms and one-stop-shops to bundle procedures; and (iii) the introduction of ICT-based procedures for businesses registration and reporting.
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