Comparison Of Cost Of Doing Business In Mauritius Accounting Essay

The cost making concern in any state involves the measuring and tracking the alterations in ordinances impacting 10 countries in the life rhythm of a concern viz. , concern: get downing a concern, covering with building licenses, acquiring electricity, registering belongings, acquiring recognition, protecting investors, paying revenue enhancements, trading across boundary lines, implementing contracts and deciding insolvency. For policy shapers, cognizing where their economic system stands in the aggregative ranking on the easiness of making concern is utile. Besides utile is to cognize how it ranks compared with other economic systems and compared with the regional norm

2.0 Get downing a Business in Mauritius in 2010 and 2011

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Get downing Costss refer to all the costs involved by entering all processs that are officially required or normally done in pattern by an enterpriser to get down up and officially run an person or commercial concern, every bit good as the clip and cost required to finish these processs. It besides records the paid-in minimal capital that companies must lodge before enrollment ( or within 3 months ) . The ranking on the easiness of get downing concern is merely the simple norm of the percentile rankings on processs, clip, cost and paid-in minimal capital.

Procedures

Starts up processs are those needed to get down a concern, including interactions to obtain necessary licenses and licences and to finish all letterings, confirmations and presentments to get down operations. It besides involves all the bureaucratic and legal stairss that an enterpriser must finish for the incorporation and enrollment of a new house. There are 5 processs to lawfully get down a concern in Mauritius in 2010 and 2011. The processs are broken down in footings of Preregistration, like name confirmation and reserve, notarisation, Registration and Post Registration. Post Registration includes societal security enrollment and company seal.

The first get down up processs involves the incorporation and enrollment of the concern and to seek for the name of the company. Entrepreneurs are able to organize a company without holding to travel through notary services. An one-year enrollment fee of Rs2000 must be paid to the Registrar of Companies by companies with a turnover of less than Rs30 Million. The company must besides register with the Commercial Registry to acquire a concern enrollment card. This process should be done within 2 yearss. This process is the same for both 2010 and 2011.

The 2nd process is to have review by local governments. There was no charge involved and should be done within 4 twenty-four hours for both 2010 and 2011. However compared to 2010, the concern licensing procedure was simplified in 2011. Once the company is registered, the Commercial Registry provides relevant bureaus with an electronic notice about the freshly registered concern and the expected start day of the month of its activities. So the local governments will choose those prospective concerns that intend to merchandise within its legal power and will pass on fees, relevant guidelines and any other commissariats.

Third, the enterpriser should pay licence fee. This process involves a license fee of Rs6000 that must be paid by the company to the local authorization. This process remains the same from 2010 to 2011. The fee for the current fiscal twelvemonth must be paid in 15 yearss of the start of the concern and no latter that January 15th in the subsequent fiscal twelvemonth. The authorization can besides impose a 50 % surcharge on any unpaid sum within the prescribed period. The process should be completed in 1 twenty-four hours coincident with the old process.

The forth process concerns the enrollment with societal security office. This process is similar in 2010 and 2011. It is free in both old ages. In this process, the enterpriser must finish an application signifier and subject the employment contracts to the employer enrollment and the certification of incorporation on the Central Registration database. This process shall be completed 1 twenty-four hours coincident to the 2nd process.

Finally, the last process is to do a company seal. For both 2010 and 2011, it costs USD12 to do a company seal and takes topographic point 1 twenty-four hours coincident with the 2nd process. Start up processs are completed when the concluding paperss is received.

Time

Refering the clip involved to finish the processs, it was 6 yearss for both 2010 and 2011. However this does non include clip spent to garner information. Furthermore, each process will get down on a separate twenty-four hours. Furthermore, the process is completed once the concluding papers is received. There are no anterior contacts with functionaries.

Costss

The costs required to finish each process is measured as a per centum of income per capita. This involved functionary costs merely, there should be no payoff. Furthermore no professional fees are taken into consideration unless these services are required by jurisprudence. In 2010, the costs required to finish each process was 3.8 % while in 2011, the costs requires to finish each process decreases to 3.6 % .

Paid-in Minimum Capital

The Paid-in Minimum capital is financess deposited in a bank or with notary before enrollment. It is measured as a per centum of income per capita. It remains the same in both 2010 and 2011 that is it remains 0.0 % .So it can be concluded that in 2010, get downing a concern in Mauritius would necessitate 5 processs, takes 6 yearss to be completed, be 3.8 % of income per capita and required paid in minimal capital of 0.0 % of income per capita. On the other manus, in 2011, everything remains the same except that it cost 3.6 % of income per capita for that fiscal twelvemonth.

When all the four factors have been taken into consideration, the starting costs are obtained. In 2010, Mauritius was ranked 12th while in 2011, it was ranked 15th out of 183 states on the easiness of making concern. This showed that get downing costs was less in 2010 than in 2011 for Mauritius.

3.0 Covering with Construction Permits in Mauritius in 2010 and 2011

Covering with the building permits is really of import to protect the general populace. It needs to be really efficient where the processs to cover with building licenses are simple, straightforward and cheap in clip and money, so that everyone is better off. If non, enterprisers may pay payoffs to go through reviews or merely construct illicitly which will take to risky building that might public safety at hazard.

So covering with building licenses would affect the processs, clip and cost for a concern to obtain all the necessary blessings to construct a simple commercial warehouse in the economic system ‘s largest concern metropolis, connect it to basic public-service corporations and register the belongings so that it can be used as collateral or transferred to another entity. The ranking on the easiness of covering with building licenses is a simple norm of the percentile rankings of its processs, clip and cost. In 2010, Mauritius was ranked 39 overall covering with building licenses. Furthermore in 2010, there were 18 processs involved, take 107 yearss and costs 32.3 % of income per capita. On the other manus in 2011, covering with building licenses requires 16 processs, takes 136 yearss and costs 30.6 % of income per capita, and Mauritius was ranked 53 out 183 states.

Procedures

The processs to lawfully construct a warehouse are as follows: –

First, the enterpriser should subject all relevant paperss and obtain all necessary clearances, licenses, licenses and certifications. Second, the enterprisers should finish all needed presentments and receive all necessary reviews. Third, he should obtain public-service corporation connexions for H2O, sewage and a fixed telephone line. Finally, the enterpriser should register the warehouse after its completion. In 2010, there were 18 processs to cover with building licenses where as in 2011 there were merely 16 processs, therefore being an advantage for enterprisers.

There are 18 processs for 2010 and 16 processs in 2011. A tabular array is provided below to exemplify the processs:

Number

Procedure

2010

2011

Time to finish ( yearss )

Cost to finish ( Rs )

Time to finish ( yearss )

1

Obtain program blessing from Central Electricity Board ( CEB )

15

250

15

2

Obtain program blessing from Cardinal Water Authority ( CWA )

15

250

15

3

Obtain program blessing from Waste Water Management Authority

( WMA )

15

250

15

4

Obtain edifice and land usage license at the same time

14

65,530

14

5

Receive initial phase review

1

No Charge

1

6

Receive foundation degree review

1

No Charge

1

7

Receive roof review

1

No Charge

1

8

Receive and receive fire review

1

100

1

9

Receive healthful review from Waste Water Management

Authority ( WMA )

1

No Charge

1

10

Obtain sewage connexion from Waste Water Management Authority ( WMA )

60

1,750

60

11

Receive plumbing review from CWA ( However in 2010, this process besides involves having plumbing review from the Central Water Authority )

1

No Charge

1

12

Obtain H2O connexion from CWA ( In 2010 this process involves obtaining power connexion from the Central Electricity Board

14

No Charge

14

13

Obtain phone connexion from Mauritius Telecom ( In 2010 this process involves having plumbing review by the Central Water Authority )

1

No Charge

10

14

Notify municipality of the completion of building and receive

concluding review ( However in 2010 the 14th process was to obtain H2O connexion from the Central Water Authority )

14

1,500

1

15

Obtain fire safety clearance ( However in 2010 the fifteenth process was to obtain phone connexion from the Mauritius Telecom )

10

2,000

14

16

Issue of tenancy license by the Ministry of Local Government ( However in 2010 the fifteenth process was to advise the municipality of the completion of building and receive concluding review )

1

No Charge

10

17

Obtain an tenancy license by the Ministry of Local Government ( Note merely 2010 )

10

No Charge

18

Obtain the program blessing from the Fire Department ( Note merely 2010 )

14

250

Time

In such a instance, the clip required to finish each process does non include clip exhausted assemblage information. Each process will get down on a separate twenty-four hours. Each process is completed once the concluding papers is received. There is no anterior contact with functionaries. From 2010 to 2011, there was an addition in the figure of yearss to cover with the building permits. It increases from 107 yearss to 136 yearss.

Cost

The cost required to finish each process decreases from 32.3 % to 30.6 % from 2010 to 2011.

4.0 Cost of acquiring Electricity in Mauritius in 2010 and 2011

The processs, clip and cost required for a concern to procure a lasting electrical connexion for a freshly built warehouse. Around the universe, electricity connexions are provided by distribution public-service corporations that frequently retain monopolistic places even in otherwise liberalized electricity markets. Businesss and other clients have small pick.

In Mauritius, The Central Electricity Board ( CEB ) is the exclusive authorised distributer of electricity in Mauritius. The chief and biggest warehouse is situated at Port-Louis ( metropolis of Mauritius ) .

1. Submit application with Central Electricity Board ( CEB ) and await estimation. An application can be submitted in individual, by missive, facsimile or online. The undermentioned paperss have to be attached: ( 25 yearss

aˆ? Location program

aˆ? Site program

aˆ? National Identity Card or Passport.

aˆ? Building license

aˆ? Trade License from local authorization

aˆ? Title Deed of land acquisitioned or lease understanding ( necessitate to be notarized )

aˆ? Load inside informations.

All these should take about 25 yearss merely and would be in the part of about Rs 34,897.40The other processs would take another 66 yearss to be completed

2. CEB carries out external and internal ocular review. ( 7 yearss )

3. The client ‘s electrical contractor carries out the civil work for the transformer. ( 30 yearss )

Economy

Year

Ease of Making Business Rank

Geting Electricity

Rank

Procedures ( figure )

Time ( yearss )

Mauritius

DB2010

..

..

4

91

Mauritius

DB2011

..

..

4

91

4. Central Electricity Board ( CEB ) carries out a everyday review of the civil plants, external connexion plants and meter installing. ( 29 yearss )

5.0 Cost of acquiring Credit in Mauritius in 2010 and 2011

“ All concerns, whether engaged in excavation, lumbering, agribusiness, fabrication, distributing, supplying services or retailing, require working capital to run, to turn and to vie successfully in the market place. It is good established that one of the most effectual agencies of supplying working capital to commercial endeavors is through secured recognition. ”

Economy

Year

Rank

Geting Recognition

Strength of legal rights index.

( 0-10 )

Depth of recognition information index ( 0-6 )

Public register coverage ( % of grownups )

Mauritius

DB2010

87

6

3

36.8

Mauritius

DB2011

75

6

3

49.8

Equally Far as Mauritius is concerned, with a limited figure of Bankss due to a smaller economic system, entree to recognition is bound to be a job but with right political stableness, development of efficient sectors and efficient authorities policies, the equal resources will be found in order to assist a concern to establish itself and last in the market. Ranked at the 87th topographic point ( cost of acquiring recognition ) in 2010, 1 twelvemonth subsequently Mauritius found itself in a more comfy topographic point by procuring 12 topographic points and making the 75th topographic point demoing clearly immense investings have been made ; the cost of making concern has either gone down in Mauritius or taken a hiking in other economic systems. The fiscal sector may besides hold spread on a larger graduated table, leting more recognition to flux in the market, therefore cut downing decidedly the cost of making concern.

6.0 Paying revenue enhancements in Mauritius in 2010 and 2011

Paying revenue enhancements rank is measured with 3 constituents ; Payments which is the entire figure of revenue enhancement payment per twelvemonth, Time as the entire clip required to register returns and pay revenue enhancements and Entire Tax Rate which is the per centum of revenue enhancement on net incomes.

Mauritius ranked 11th in the twelvemonth 2010 and 12th in 2011 for paying revenue enhancements. Payments and Time remained a changeless 7 and 161 severally for the aforesaid period. During this clip, Mauritius shifted from a tiered rate to a individual rate with a broader revenue enhancement base and converted revenue enhancement disposal to electronic. However, the entire revenue enhancement rate increased from 22.9 % in 2010 to 24.1 % in 2011, therefore increasing the cost of making concern. Mauritius introduced the corporate societal duty revenue enhancement in the twelvemonth 2011 which could explicate the lessening in rank, as a consequence an addition in the cost of paying revenue enhancements.

7.0 Trading across boundary lines in Mauritius in 2010 and 2011

Trading across boundary lines is international trade and should be encouraged. However, there are costs associated with trading such as duties, figure of processs to finish amongst others.

Mauritius improved its rank from 24th to 22nd during this period for trading across boundary lines.

Trading across boundary lines informations

2010

2011

Rank

24

22

Cost to export ( US $ /container )

737

737

Cost to import ( US $ /container )

689

689

Documents to export ( figure )

5

5

Documents to import ( figure )

6

6

Time to export ( yearss )

14

13

Time to import ( yearss )

14

13

The above tabular array shows inside informations about trading across boundary lines for Mauritius. The addition in rank in 2011 may be due to the decrease in the figure of yearss it takes to do both import and export processs.

Export processs

Duration

Cost ( US $ )

Documents readying

8

387

Customss clearance and proficient control

1

75

Port and terminal handling

2

175

Inland transit and handling

2

100

Entire

13

737

The above tabular array shows the continuance and the cost of export processs of the twelvemonth 2011. It takes on 13 yearss for a house to finish export processs.

Import processs

Duration

Cost ( US $ )

Documents readying

8

394

Customss clearance and proficient control

2

50

Port and terminal handling

2

145

Inland transit and handling

1

100

Entire

13

689

The old tabular array shows the clip and cost a house takes to do import processs in the twelvemonth 2011.

Mauritius has been able to cut down the clip taken for these processs by electronically interchanging information amongst bargainers utilizing a plan called Trade Net. Customs uncluttering times was besides reduced by using risk-based appraisals to restrict the figure of physical reviews.

8.0 Get downing a Business in Madagascar in 2010 and 2011

Get downing Costss for Madagascar would be similar to the starting costs for Mauritius. This involves costs that arose when entering all processs that are officially required or normally done in pattern by an enterpriser to get down up and officially run an person or commercial concern, every bit good as the clip and cost required to finish these processs.

Procedures

In Madagascar, there were 2 get downing processs in 2010 and 3 get downing processs in 2011. In 2010, the first process involves the enterprisers lodging registered position and using for licence ( Carte Professionnelle and Statiscal designations ) . It costs MGA 88,899 and takes 5 yearss. On the other manus, in 2011 the first process is to obtain a new financial designation figure. The enterpriser has to use for this online and must supply some paperss. This process is free and lasts for 1 twenty-four hours.

The 2nd and last process in 2010 was to register a notice of fundamental law to be published in a day-to-day newspaper in French. It takes 2 yearss and costs MGA 15,000. However the fee to print a notice of fundamental law in a day-to-day newspaper varies between MGA 10,000 and MGA 20,000. On the other manus the 2nd processs involves the enterpriser lodging registered statuts and use for licence ( Carte Professionnelle ) , and statistical designations. The k-bis, statistical card, revenue enhancement enrollment verification, commercial enrollment figure, and professional card ( carte professionelle ) can be obtained in approximately 2 yearss. Owing to reforms, a notice of publication is

no longer needed to obtain the k-bis. The company can go on with subsequent processs in the interim. it takes on mean 4 to 8 yearss to acquire registered with the EDBM. This process cost MGA 93,350. The fee agenda is as follows:

– Commercial enrollment fee: MGA 15,500.

– Institut National de la Statistique Malgache ( INSTAT ) ( see Decree

2005-380, dated June 22, 2005 ) : MGA 20,000.

– K-bis: MGA 2,000.

– Deed enrollment costs: MGA 9,100

– Registration fees: 0.5 % of the start up capital

– Lease enrollment: 2 % of the rental.

In 2011 there is a last process and this involves the file a notice of fundamental law to be published in a day-to-day newspaper in French. The fee to print a notice of fundamental law in a day-to-day newspaper varies between MGA 10,000 and MGA 20,000. It should be completed in 2 yearss and costs MGA 15,000.

Time

Refering the clip involved to finish the processs, it was 7 yearss in 2010 and 8 yearss in 2011. However this does non include clip spent to garner information. Furthermore, each process will get down on a separate twenty-four hours. Furthermore, the process is completed once the concluding papers is received. There are no anterior contacts with functionaries.

Costss

The costs required to finish each process is measured as a per centum of income per capita. This involved functionary costs merely, there should be no payoff. Furthermore no professional fees are taken into consideration unless these services are required by jurisprudence. In 2010, the costs required to finish each process was 12.9 % while in 2011, the costs requires to finish each process decreases to 12.1 % .

Paid-in Minimum Capital

The Paid-in Minimum capital are financess deposited in a bank or with notary before enrollment. ( within 3 months ) . It is measured as a per centum of income per capita. It was 248.1 % in 2010 and 0.0 % in 2011.

So it can be concluded that in 2010, get downing a concern in Madagascar would necessitate 2 processs, takes 7 yearss to be completed, be 12.9 % of income per capita and required paid in minimal capital of 248.1 % of income per capita. On the other manus, in 2011, get downing a concern in Madagascar would necessitate 3 processs, takes 8 yearss to be completed, be 12.1 % and required paid in capital 0.0 % .

When all the four factors have been taken into consideration, the starting costs are obtained. In 2010, Madagascar was ranked 70h while in 2011, it was ranked twentieth out of 183 states on the easiness of making concern. This showed that get downing costs was more in 2010 than in 2011 for Madagascar. This is because Madagascar eliminates the minimal capital demand.

9.0 Covering with Construction Permits in Madagascar in 2010 and 2011

In Madagascar, covering with the building permits is really of import to protect the general populace. In 2010, Madagascar was ranked hundred-and-thirtieth overall dealing with building licenses where as in 2011, Madagascar was ranked 131th. In both 2010 and 2011, the figure of processs and the clip ( yearss ) was 16 and 172 yearss severally. However the cost ( % per capita ) was 468.8 % in 2010 and 422.2 % in 2011.

Procedures

The indexs reported here for Madagascar are based on a set of specific procedures-the stairss that a company must finish to lawfully construct a warehouse. First, the enterpriser should subject all relevant paperss and obtain all necessary clearances, licenses, licenses and certifications. Second, the enterprisers should finish all needed presentments and receive all necessary reviews. Third, he should obtain public-service corporation connexions for H2O, sewage and a fixed telephone line. Finally, the enterpriser should register the warehouse after its completion. There are 16 processs for 2010 and 2011.

Since the processs are the same for 2010 and 2011, a tabular array is provided overleaf to exemplify the processs:

Number

Procedure

2010

2011

Time to finish ( yearss )

Cost to finish ( MGA )

Time to finish ( yearss )

1

Acquire belongings enrollment certifications

30

2,000

30

2

Obtain official topographical program of the secret plan

7

6,000

7

3

Acquire batch program with Commune seal

7

No Charge

7

4

Obtain preliminary blessing from the Urban Commune

1

No Charge

1

5

Submit application for edifice license

1

No Charge

1

6

Receive review from Provincial Service of Land Development ( SPAT )

1

No Charge

1

7

Obtain edifice license

90

1,170,540

90

8

Receive concluding review at the terminal of building by SPAT

1

No Charge

1

9

Receive review by fire protection service

1

No Charge

1

10

Obtain tenancy certification

7

No Charge

7

11

* Apply for a telephone line

1

No Charge

1

12

* Malagasy Telecom performs review of the edifice in order to fix estimation

1

No Charge

1

13

Obtain telephone connexion

30

100,000

30

14

* Apply for H2O connexion ( However in 2010, this process besides involves the application for Electricity Connection

1

No Charge

1

15

* JIRAMA inspects the edifice to fix an estimation

1

No Charge

1

16

* Obtain H2O connexion ( In 2010, this process besides involves the geting of electricity connexion

21

4,000,000

21

Time

In such a instance, the clip required to finish each process does non include clip exhausted assemblage information. Each process will get down on a separate twenty-four hours. Each process is completed once the concluding papers is received. There are no anterior contacts with functionaries. The figure of yearss to cover with the building permits remains the same in 2010 and 2011 that is 172 yearss.

Cost

The cost required to finish each process decreases from 468.8 % to 422.2 % from 2010 to 2011.

10.0 Cost of acquiring Electricity in Madagascar in 2010 and 2011

1. The client applies for electricity connexion and awaits estimation of connexion fees from Jiro sy rano Malagasy.

( JIRAMA ) A ( 15days )

The application can be submitted by mail, missive, or in individual at one of the public-service corporation ‘s bureaus. The client will necessitate to attach some paperss to the application, with the client ‘s personal and professional inside informations, a description of the plants and of the electrical installing, every bit good as a Signing Authority ( “ pouvoir de signature ” ) and a Commitment Letter ( “ lettre d’engagement ” ) .The last 2 paperss have to be notarized.A Agency: A Jiro sy rano malagasy ( JIRAMA )

2. The client obtains external review by Jiro sy rano Malagasy. ( JIRAMA ) ( 1 twenty-four hours )

3. The client obtains right of manner from the local authorization ( Commune ) ( 50 yearss )

4. The client buys the stuff for the external plants from a local shop ( 18 yearss )

5. The client obtains proving of stuff and external plants by Jiro sy rano malagasy ( JIRAMA ) A ( 19 yearss )

6. The client marks a supply contract with, pays an progress on ingestion to, and awaits concluding connexion from JIRAMA ( 366 yearss ) .

Economy

Year

Ease of Making Business Rank

Geting Electricity

Rank

Procedures ( figure )

Time ( yearss )

Malagasy republic

DB2010

..

..

6

450

Malagasy republic

DB2011

..

..

6

450

11.0 Cost of acquiring Credit in Madagascar in 2010 and 2011

Economy

Year

Rank

Geting Recognition

Strength of legal rights index.

( 0-10 )

Depth of recognition information index ( 0-6 )

Public register coverage ( % of grownups )

Malagasy republic

DB2010

167

2

1

0.1

Malagasy republic

DB2011

177

2

0

0

Madagascar finds itself ranked even lower in 2011 compared to 2010, possibly due to political instability, houses find it more hard to happen entree to recognition, a impairment of 10 topographic points show clearly there is a immense job in happening recognition in Madagascar since despite a non so favorable 167th topographic point, it must intend that, the cost of making concern has shoot up in Madagascar when it comes to the instance of acquiring recognition.

12.0Paying revenue enhancements in Madagascar in 2010 and 2011

Economy

Paying Taxs

Malagasy republic

Rank

Payments ( figure per twelvemonth )

Time ( hours per twelvemonth )

2010

72

23

201

2011

72

23

201

Madagascar is ranked 72 for paying revenue enhancements for both the twelvemonth 2010 and 2011. On norm, a steadfast return 201 hours per twelvemonth to fix and pay revenue enhancements in Madagascar and about 23 payments per twelvemonth. These figures remained changeless through the clip period. Furthermore, the entire revenue enhancement rate decreased from 39.2 % in 2010 to 37.7 % in 2011 which means that houses has to pay a lesser per centum of revenue enhancement out of net income cut downing the cost of making concern. Madagascar opted to cut down revenue enhancement rate which is one of the many ways to simplify the paying of revenue enhancements such as cut downing the figure of payments or leting electronic filing.

13.0 Trading across boundary lines in Madagascar in 2010 and 2011

Malagasy republic 114th in 2010 as compared to 106th in 2011 for trading across boundary lines.

Trading across boundary lines informations

2010

2011

Rank

114

106

Cost to export ( US $ /container )

1279

1197

Cost to import ( US $ /container )

1660

1555

Documents to export ( figure )

4

4

Documents to import ( figure )

9

9

Time to export ( yearss )

21

21

Time to import ( yearss )

26

24

From the above tabular array it can be seen that there is a little betterment in Madagascar cost of trading. The latter managed to cut down cost to import, cost to export and it ‘s clip taken for import processs.

Export processs

Duration

Cost ( US $ )

Documents readying

14

200

Customss clearance and proficient control

2

272

Port and terminal handling

2

225

Inland transit and handling

3

500

Entire

21

1197

The above tabular array distinguishes the different export processs for Madagascar in 2011. The continuance and cost for these processs is considered to be high.

Import processs

Duration

Cost ( US $ )

Documents readying

17

189

Customss clearance and proficient control

3

315

Port and terminal handling

2

551

Inland transit and handling

2

500

Entire

24

1555

The old tabular array shows the different import processs and its several continuance and cost for the twelvemonth 2011.

Despite Madagascar ‘s effort to cut down the costs and continuance of trading across boundary lines, they are still considered to be high.

14.0 Comparison for get downing costs between Mauritius and Madagascar for 2010

Start up cost can be divided into 4 wide classs: clip, cost, processs and paid-in minimal capital.

Mauritius is ranked 12th while Madagascar is ranked 70th.Madagascar is in this worse state of affairs due to its political instability, such that investors will non be willing to put at that place. On the other manus Mauritius has political stableness and a sound legal system which attracts investors, such that integrating a company is easier and quicker in Mauritius. Normally companies will desire to get down production every bit shortly as possible, so they will prefer Mauritius to Madagascar.

The cost of start up processs for Madagascar was of 12.9a„… of Gross National Income ( GNI ) per capita while for Mauritius, it was only3.8a„… . Although Mauritius has a GNI per capita of $ 13,800 which is higher than the GNI per capita of Madagascar which is $ 950, the cost of start up processs was much lower in Madagascar than in Mauritius. In other words the cost of start up processs was $ 123 in Madagascar while in Mauritius, it was $ 524. This can be explained by the fact that Mauritius tend to hold a higher cost of life and there is a sound legal system. So, companies need to pay for the sound legal system. This explains the complexness in start up processs for Mauritius. The figure of processs for get downing a concern in Mauritius was 5 as compared to Madagascar which had a comparatively lower figure of processs viz. 2 processs. So companies will prefer to put in Madagascar as it is easier to get down a concern at that place.

The clip to register the company is lower in Mauritius than in Madagascar. In Mauritius it takes merely 6 yearss to register a company where as in Madagascar, it takes 7 yearss. So incorporation of a company is quicker in Mauritius than Madagascar. This is because Mauritius is a more developed state than Madagascar. Mauritius uses better engineering than Madagascar, that ‘s why it takes a smaller period of clip to register a company in Mauritius.

Furthermore, cost ( a„… of income per capita ) for Mauritius is 3.8a„… while for Madagascar, it is 12.9a„… . These figures explained why investors prefer to put in Mauritius than in Madagascar. This is because they spend less in Mauritius. Lower cost will be given to maximise net incomes. So net incomes of a company puting in Mauritius will be higher than another company puting in Madagascar.

The paid-in minimal capital is nil for Mauritius and 248.1 % for Madagascar. So it can be concluded, Mauritius has a lower cost than Madagascar except for the start up costs. This is showed in the ranking of start up concern whereby Mauritius is 15th while Madagascar is 20th.

15.0 Comparison for get downing costs between Mauritius and Madagascar for 2011

In 2011 Mauritius is ranked fifteenth while Madagascar is ranked twentieth. There has been a considerable betterment in Madagascar ‘s ordinance such as the abolition of the paid-in minimal capital. However in 2011 besides, Mauritius is better ranked than Madagascar even though Mauritius was ranked 12th in the old twelvemonth.

Cost of start up processs for Mauritius is 3.6 % of Gross National Income ( GNI ) per capita while for Madagascar, it was 12.1 % . Mauritius has a GNI per capita of $ 14,760 which is higher than the GNI per capita of Madagascar which remains $ 950. Even though, the cost of start up processs was lower in Madagascar than in Mauritius as the cost of start up processs was $ 114 in Madagascar while in Mauritius, it was $ 531.

Refering the clip to register the company, it remains 6 yearss in Mauritius while it increases from 7 yearss to 8 yearss in Madagascar. Integrating a company is quicker in Mauritius in 2011. This besides supports the fact that Mauritius is better ranked than Madagascar.

Furthermore, cost ( a„… of income per capita ) for Mauritius is 3.6a„… while for Madagascar, it is 12.1a„… . So investing is lower in Mauritius in 2011 besides. Lower cost leads to large net incomes, therefore pulling investors to put in Mauritius.

Paid-in minimal capital is nil for both states. This is because of ordinance which levered this demand in order to pull investors. No minimal capital demand involves any cost for both states.

16.0 Comparison for Construction Permits between Mauritius and Madagascar for 2010

Refering building permits ranking, Mauritius is 39th while Madagascar is 130th connoting a lower building permits costs in Mauritius than in Madagascar. This is so because Mauritius tends to take down its costs to pull investors. Companies look building licenses ‘ cost as a load, so they prefer to take states which give the best installations.

Although there were 18 processs in Mauritius, it requires merely 107 yearss to be completed it as compared to Madagascar who need 172 yearss to finish 16 processs. So building licenses will be received more quickly in Mauritius than in Madagascar. The cost of building licenses processs for Madagascar was of 468.8a„… of Gross National Income ( GNI ) per capita while for Mauritius, it was only32.3a„… . Although Mauritius has a GNI per capita of $ 13,800 which is higher than the GNI per capita of Madagascar which is $ 950, the cost of start up processs was lower in Madagascar than in Mauritius. In other words the cost of start up processs was $ 4453 in Madagascar while in Mauritius, it was $ 4457. However this is non a large difference. This can be explained by the higher cost of life and there is a sound legal system found in Mauritius which explains the complexness of the processs for Mauritius.

Furthermore, cost ( a„… of income per capita ) for Mauritius is 32.3a„… while for Madagascar, it is 468.8a„… . Investors would prefer to put in Mauritius than in Madagascar due to the lower costs involved when covering with the building permits. This will take to higher net incomes for the company puting in Mauritius.

As illustrated above, an investor will hold more advantage covering with building licenses in Mauritius than in Madagascar in 2010.

17.0 Comparison for Construction Permits between Mauritius and Madagascar for 2011

Mauritius was ranked 53th while Malagasy republic was at the 131th topographic point in cost of building licenses. Both states was better ranked the old twelvemonth, nevertheless the autumn in the rank for Mauritius is greater comparative to Madagascar. Both states have 16 processs to cover with the building permits. However Madagascar still required more yearss to finish their process, that is 172 yearss which is more than Mauritius which is 136 yearss. The cost ( a„… of income per capita ) was besides much lower in Mauritius than in Madagascar.

18.0 Comparison for acquiring electricity between Mauritius and Madagascar for 2010 and 2011

Madagascar has a lower cost of acquiring electricity and hence a lower cost of making concern than Mauritius in the old ages 2010 and 2011.It takes 15 yearss in Madagascar for the await estimation compared to Mauritius where it will take 10 more yearss. Madagascar besides is more favorable for the external review with 6 yearss less than Mauritius. Having a cost of Rs 34, 897.40 to use for electricity for concern intent makes the cost of making concern and acquiring electricity higher compared to Madagascar where no fees are charged for an application and to obtain electricity. The grounds for these differences are that Madagascar are mostly more technically-advanced, they are a far bigger economic system and more have power Stationss compared to Mauritius who suffer from immense reverse of engineering.

The per capita ingestion of electricity in Madagascar is 46kWh while in Mauritius it is 1,668kWh. This entry consists of entire electricity generated yearly plus imports and subtractions exports, expressed in kilowatt-hours. The disagreement between the sum of electricity generated and/or imported and the sum consumed and/or exported is accounted for as loss in transmittal and distribution.

19.0 Comparison for acquiring recognition between Mauritius and Madagascar for 2010 and 2011

When comparing both economic systems, it is to no surprise that Mauritius carves itself a better ranking both in 2010 and 2011. It may be the smaller economic system but it is besides going the fitter one. Cost of acquiring recognition is decidedly lower but it besides depends on the graduated table concern is being conducted. Mauritius may happen itself gaining little undertakings and therefore the finance will be available, Madagascar being a large island will desire to gain bigger undertakings but the resources and finance cost are higher.

Still Mauritius is manner far in front of Madagascar where the easiness of acquiring recognition is concerned connoting a lower cost of concern.

20.0 Comparison for Paying Taxes between Mauritius and Madagascar for 2010 and 2011

Mauritius ranked 11th while Madagascar was 72th for paying revenue enhancements in 2010.

Paying Taxes informations

2010

Mauritius

Malagasy republic

Entire revenue enhancement rate

22.9

39.2

Payments

7

23

Time

161

201

The above tabular array shows that Mauritius has lower revenue enhancement rates for all three classs whether in the revenue enhancement rate as a per centum of net incomes, the mean figure of payments to be made or the clip taken to finish and pay revenue enhancement. Having high revenue enhancement rates acts as a deterrence for houses to put in Madagascar hence, experiences low inward FDI as compared to Mauritius.

In 2011, Mauritius and Madagascar ranked 12th and 72nd severally while Mauritius lost one rank, Madagascar remained steady.

Paying Taxes informations

2011

Mauritius

Malagasy republic

Entire revenue enhancement rate

24.1

37.7

Payments

7

23

Time

161

201

There have been no alterations in both the mean payments and the mean clip for both states. However, the entire revenue enhancement rate of Mauritius increased whilst that of Madagascar decreased because of the latter ‘s revenue enhancement rate decrease policy. We can still reason that the cost of paying revenue enhancements in Mauritius is still lower than in Madagascar.

21.0 Comparison for Trading across boundary lines between Mauritius and Madagascar for 2010 and 2011

By comparing Mauritius against Madagascar, it is obvious to state that the cost of trading in Mauritius is lower than in Madagascar.

Trading across boundary lines informations

Mauritius ( 2010 )

Madagascar ( 2010 )

Rank

24

114

Cost to export ( US $ /container )

737

1279

Cost to import ( US $ /container )

689

1660

Documents to export ( figure )

5

4

Documents to import ( figure )

6

9

Time to export ( yearss )

14

21

Time to import ( yearss )

14

26

The tabular array compares Mauritius with Madagascar in the assorted factors for trading across boundary lines. It should be noted that Madagascar promotes export to imports as its cost of export is lower as compared to Mauritius which is frailty versa.

Trading across boundary lines informations

Mauritius ( 2011 )

Madagascar ( 2011 )

Rank

22

106

Cost to export ( us $ /container )

737

1197

Cost to import ( us $ /container )

689

1555

Documents to export ( figure )

5

4

Documents to import ( figure )

6

9

Time to export ( yearss )

13

21

Time to import ( yearss )

13

24

For the twelvemonth 2011, both states improved their ranks and their figures. However, the cost of trading in Mauritius is still lower than in Madagascar.

22.0 Decision

Ranked reasonably good in both 2010 and 2011 in comparing to Madagascar, Mauritius as an economic system deserves the figure 1 topographic point in Africa for making concern despite the presence of bigger economic systems. Mauritius ‘ sound economic policies and prudent banking patterns helped to extenuate negative effects from the planetary fiscal crisis in 2008-09. GDP grew more than 4 % per twelvemonth in 2010-11, and the state continues to spread out its trade and investing outreach around the Earth thereby spurring a lower cost of making concern compared to Madagascar but a higher 1 in the economic system itself.

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