On October 5 and 6 the Council for Economic Planning and Development (CEPD) held an “APEC Seminar on the First Steps of Successful Reform in Doing Business” for 22 experts from 14 APEC economies and 80-plus participants from Taiwan’s business, governmental, and academic sectors. The seminar was designed to promote the improvement of the domestic business environment in line with the APEC Ease of Doing Business Action Plan.

The financial tsunami that swept the world in 2008 plunged the global economy into a deep recession. APEC and other international organizations called on countries to carry out long-term structural reform and create a good business environment to assure sustained economic growth. To help achieve that goal APEC launched its "ease of doing business" initiative in 2009. The organization’s Economic Committee Chair, Takashi Omori, noted that the core issue in promoting ease of doing business is not just raising index rankings but making real progress in improving the business environment.

During her address to the seminar, CEPD Minister Christina Liu pointed out that under the tide of globalization, the only way that an economy can become a successful partner in international economic integration is to build a more friendly business environment. Taiwan has close relationships with other APEC economies, and in the future it will strive to promote linkage with Asia-Pacific supply chains and deepen regional economic cooperation on the basis of an improved business environment and its existing industrial strength.

The focus of the seminar’s agenda was the World Bank’s “Ease of Doing Business” index. Representatives from the leading economies in the three areas of “Starting a Business,” “Dealing with Construction Permits,” and “Getting Credit”—New Zealand, Hong Kong, and Malaysia—were invited to share their “best reform practices” with the participants.

Justin Hygate, Group Manager, Business Registries of New Zealand’s Ministry of Economic Development, noted that economic growth comes from the private sector, and that the government’s job is to create a good business environment and regulatory system to support business operations. The process for starting a business in New Zealand is smoothed by simple regulation, uniform charges and fees, and the provision of online services; last year 60,000 companies registered online there, taking only 20 minutes to complete the process. Eighty percent of the registrations were done by the company’s founder, with no need for a lawyer or accountant. Hygate emphasized that while digitization is one trend, true reform must be carried out by reviewing regulations and getting rid of unnecessary controls.
Hygate compared the founding of a company to the birth of a baby. There is no way to be sure that the baby will grow into a law-abiding citizen, he said; but, as with a company, the proper guidance and supervision can help it grow. If the restrictions on starting a business are too onerous, they might easily cause business operations to sink into the underground economy where the government will have no way to regulate them.

On the issue of “Dealing with Construction Permits,” Albert Chan, Associate Head of the Department of Building and Real Estate at the Hong Kong Polytechnic University, pointed out that the government frequently faces a dilemma in handling construction permit applications. It wants the entire process to be more simplified without affecting the end user, but as the competent agency the government must also ensure that the relevant regulations conform to the needs of public safety and health. The key to Hong Kong’s No. 1 ranking in this subject, he said, is in the reform of administrative procedures.

Chan commented that the Business Facilitation and Economic Analysis Unit under the Hong Kong Financial Secretary’s Office serves as coordinator for related government measures. In 2007 it mapped out a “Be the Smart Regulator” plan to simplify procedures for the issuance of company permits, with 29 agencies participating, and in 2008 it established a “one-stop centre for warehouse construction permits” to handle the overall management of applications for water, telecommunications, and construction licenses. It coordinates with other government departments and private utilities in the examinations of applications, and the Buildings Department helps with the revision of related laws and regulations. Procedures are integrated to allow for concurrent applications for different approvals to be processed simultaneously. The number of procedures needed to get a construction permit in Hong Kong has been reduced from 15 to just 7, and the time required has been shortened from 119 days to only 67. This is why Hong Kong won the top ranking in this index.
Andy Seo, member of PEMUDAH, or the Special Taskforce to Facilitate Business, reported that in 2007 the Malaysian Prime Minister moved to promote cooperation between the government and private sector, upgrade public service delivery system, and improve Malaysia’s business environment by directing his Chief Secretary to bring trade and industry associations, the heads of foreign chambers of commerce, and the secretaries general of public service and other related ministries together to form PEMUDAH, meet monthly in the Prime Minister’s Department, and submit annual reports to the Prime Minister on reforms undertaken, regulatory revisions needed, and other suggestions raised. PEMUDAH also sets up task forces to carry out study and planning in regard to the indexes on which Malaysia ranked relatively poorly.

Seo comments that Malaysia enjoys a leading global position in the convenience of financing for small and medium enterprises (SMEs). Companies can use movable property and real estate as collateral to obtain loans quickly.

The CEPD also invited Junichi Shukuwa, Senior Economist in the Economic Research Office of the Bank of Tokyo-Mitsubishi UFJ, to share Japan's experience in financial reform and flexible lending to SMEs, especially in regard to loans secured by movable property. Basically, he said, all corporate assets, including equipment, patents, other intellectual property, and even fish, rice, soy sauce, and other foodstuffs can be considered as collateral when necessary, providing easier
After listening to the opinions shared by these international experts, Liu commented that here in Taiwan, the CEPD has already carried out the revision of 600 laws and regulations. She conceded, however, that there is still room for Taiwan to improve its position in the World Bank survey. In its construction license application procedures, for example, Taiwan could emulate international practice by integrating the procedures of different agencies and creating a better environment for companies applying for construction permits. In addition, she went on, New Zealand’s experience of encouraging private individuals to establish companies by providing online company registration provides a useful reference for Taiwan to use in the reform of "starting a business" procedures. In addition, Liu concluded, Taiwan should strengthen its movable property collateral system in line with world trends to help SMEs obtain loans and broaden the channel for corporate financing.