Political Risk Latin America Blog @PolRiskLatam

Israel, Austria…Mexico?

Posted in News and Articles, Political Risk by politicalrisklatam on November 9, 2010

by The Economist – Americas View, November 8th, 2010.

Everyone knows that Brazil is the beating business heart of Latin America, right? Maybe not, according to the World Bank. A report published this week found that Mexico was the easiest place in Latin America in which to run a company, closely followed by Peru and Colombia. Worldwide, Mexico came 35th, beating the likes of Spain and Italy. Brazil came 127th.

The Bank’s report, which we explore in detail in this week’s print edition, looks at how easy and pricey it is to complete the various bureaucratic procedures involved in setting up, running and shutting down a firm. The full methodology is on its website; in short, it looks at nine main areas, from registering a business to paying taxes and trading with foreign countries.

It pays no attention to the state of a country’s economy, a field in which Mexico (whose GDP fell by 6.6% last year and is predicted to grow by 5% this year) lags far behind other countries. (Brazil’s economy, for instance, shrunk just 0.2% last year and will grow by 7.5% in 2010.) The report is not meant to be a list of the quickest places to get rich. But it offers some eye-opening details: registering a new business, for instance, takes six procedures and nine days in Mexico, versus 14 procedures and 26 days in Argentina. Mexican firms spend 404 hours a year paying taxes, whereas Brazilian firms must use up 2,600 hours doing the same thing. (continue reading… )



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