As U.S. and European countries economic growth is being obstructed, the businessmen are making plans to invest in the countries with emerging markets to churn out better profits. Countries like Brazil, Russia and Indonesia have experienced huge FDI records in 2011 which is 3 times more than last year. The business people’s assumption of making great money from the establishment in these countries is just a myth. The rules and regulations in these nations can destruct the growth as they follow very strict laws. Here are the countries that are named as a worst place for business establishment.
1. Venezuela:
Venezuela is the most difficult place to do business. This country ranks amongst the world’s 50 biggest economies. The South American nation faces huge problems in the tax payment process. A lot of hindrances are faced when people have to approach for loans, investor protection laws and cross border trading. The companies in Venezuela spend 864 hours per year on the payment of taxes which is two times more than the time taken in Caribbean and other parts of Latin America. The GDP of the country in the year 2010 was $387.8 billion and the FDI was $1.4 billion. The time taken in the country is four times more than OECD countries. Even though the country has one of the world’s largest oil and natural gas reserves most of the people in the country live in poverty. Being a socialist country, the privatization of business is a great difficulty. The oil sector under the control of the government is one of the main incomes for the nation. The strict currency controls has limited the distribution of money among people. When money is withdrawn from the bank, the account holder should provide not only the signature but also the finger prints and sometimes also photographs. ATMs have their own money withdrawing limits per day. Identification is even required for minimal purchases like groceries. Another major problem in the nation is inflation. The inflation rate in the country is getting out of control as the annual inflation is summed as 26.5 percent.
2. Ukraine
The second largest country in Europe stands second in the list of worst countries to do business too. The country’s GDP in the year 2010 was $137.9 billion and the FDI is worth 6.5 billion. Ever since the country got freedom from Russia, it is expecting to incorporate with Western Europe and merging with Russia as they provide most of the country’s energy needs. Even Ukraine has strict tax payment formalities, construction authorizations and electricity access. The business in Ukraine takes 27 days to pay taxes. The 57 percent of the business profits are to be paid as taxes so hardly people get money for their living. For the construction permit, the country takes twice over the number of days when compared to OECD countries. The political issues are also one of the major reasons. The orange revolution where Viktor Yanukovych supported the reconciliation with Russia resulted to the mass protest. The political wrangling in Ukraine is always in news.
3. Algeria:
Fifth oil rich nation in the world is stands third in the most difficult countries to do the business. The country’s GDP and FDI in the year 2010 were $159.4 billion and $2.3 million respectively. The nation is greatly dependent on the hydrocarbon sector as they are one of the largest providers of natural gas to the European Union. People in Algeria face a lot of issues for initializing the business, getting access to electricity, registration of property and filing taxes. Maximum of 48 days is taken for registering a property and about half year to get an electricity connection. The political conflicts in the Arab countries had a positive impact on Algeria’s social and political scenario. The expenses by the government for improving the social and political situation has led to the public sector wage increase and liberal food subsidies IMF has predicted the nation’s economic growth will increase by 3 percent in the year 2012. But this growth will deter in coming years as the gas production from the oil fields has reached the end and will come to an end.
4. Philippines:
This Asian country hardly attracts other countries to make any money investment. The FDI rate in this country is just 1.7 percent out of which 10 nations are from the ASEAN. The GDP of the country is $199.6 billion which is also not that great to brag about. The country has enormous mineral wealth which still unexploited which is a greatest drawback. The country does not encourage speaking of English which is another reason for not having great communication with their neighboring countries and fall in economic growth. The imbalanced legal system, sadism and government polices hardly encourage foreign business to enter the nation. The country is bad for starting a business and resolving bankruptcy which takes around 6 years whereas it is one year and seven months in OECD countries. The Philippine president Benigno Aquino visited U.S., China and Japan to generate more foreign investment and to let them know the changes happening in the country after failed and corrupt administrations in the by the previous leaders. The china tour cashed in about $9 billion investment.
5. Nigeria:
Africa’s largest oil producing nation is the fifth worst country for business. Political turmoil and religious conflicts is the major reason for being a worst place for business. Accessing of electricity, registering property for business is a great pain in this nation. This country is a jackpot for energy and resources companies but the trading of oil has stimulated violence and corruption in Niger delta. Many tycoons had to close down the production due to increase in oil pilfers. The FDI in this nation according to 2010 is $6.1 billion. The people in this oil rich country live in less than $2 per day. The country is polluted and the political instability has led to the great suffering by people.
6. India:
One of the superpower economy in the world has also made into the list because of corruption in government offices. Bribe is the major reason as for establishment of business a person has to give millions of money and the court takes at least 4 years to activate the contract. Even the real estate suffers in this country because of huge delay in issuing a construction permit. There are recent issues where India has been fighting against political and government scandals have piled up $39 billion revenue which also created a public dissatisfaction with the politicians. The unsocial environment has not hampered the reputation of the country when it comes to foreign investment. UNCTAD predicted India as a home for second largest population in world and also listed the country in the top 5 attractive destinations for international investors over 2010-12.
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