The private sector is the engine of economic development. A business-enabling environment is necessary for entrepreneurs to start up, expand and sustain a new business. This concerns all the regulations and laws governing company foundation, business operations and liquidation.
An effective business environment places all market participants on an equal footing and promotes economic growth.
The business environment can be quite discouraging in many developing countries. Anyone trying to set up a company, for example, may have to approach several government departments to get a licence; there may be lots of forms to fill out when declaring taxes; and after a company is dissolved, shareholders have to wait a long time before investing their capital again. Business regulation reforms take years to implement, from the time they are first identified until eventually passed by Parliament.
A more service-oriented state
Some ways in which SECO supports partner countries are as follows:
- One-stop shops for company formation, so that they do not have to contact all government departments involved. This makes it easier and quicker to register a new business and start operating.
- Tourism and agriculture are important business sectors and create many jobs. These can become more competitive by removing sector-specific barriers and administrative hurdles. SECO works in Cuzco in Peru, for example, where tourism is one of the main sources of income.
- A country should be clear on the reforms it needs in order to improve its business environment. SECO finances diagnostic tools to assist in such decision-making.
More time for the core business means higher productivity
Reforms improving the business environment help companies save on both time and money. This leaves them more scope for business development, capital investments and job creation. A more conducive business environment makes a country a preferred choice for doing business and attracts new investments.
Better Corporate Governance
SECO supports numerous companies in several of its priority countries in improving their Corporate Governance. This results in companies operating more transparently and obtaining capital more easily. Better-managed companies are generally more sustainable financially and economically and can contribute to the creation of new jobs through further investment.
Project examples from Vietnam:
Last modification 27.08.2018