Doing Business 2021 – Research on Covid-19

This year, Doing Business is collecting new data on the impact of Covid-19 for entrepreneurs. Through the
life cycle of a company, the research will assess the effects of Covid-19 and the measures taken by
governments to respond to the challenges posed by the pandemic. The data are collected in the 120 most
populated economies around the world. These extra data do not affect the Doing Business scoring or
ranking.

Starting a Business
In the area of Starting a Business, Doing Business will analyze how the Covid-19 pandemic is impacting the
services provided by the company registry and how governments are addressing challenges for new
entrepreneurs. In some economies in lockdown, business registries are restricting access, changing
working hours or closing their doors for some time. In some other economies suffering from the
pandemic, online services are offered to incorporate and operate a new business. Some of these online
services were already existing and remain operational; some of them are being introduced as a response
in the pandemic context. More broadly, Doing Business will keep track of any measures related to the
business start-up process, and adopted due to the Covid-19 situation. The project is also keeping records
of any planned reform that has been rescheduled because of the pandemic.

Dealing with Construction Permits

Around the world, the Covid-19 pandemic has led to a reduction of activities for building permitting
authorities, which are either in weeks-long lockdowns or limiting their efforts to emergency operations.
Doing Business will collect new data on the operational status of the permitting authorities - whether
there is a lockdown, if routine activities are still being conducted during the lockdown period, if reduced
working hours are in place, if only emergency and critical tasks are being undertaken, or if a complete
shutdown is in effect. The project will also measure if the government has enacted any restrictions to
construction activity during the Covid-19 outbreak, and whether water and sewage utility companies are
undertaking any measures to ensure continuity of services. Information will also be collected on measures
taken by governments to support the architecture, engineering and construction industry.

Getting Electricity
In many economies worldwide, especially in Europe, Asia and the Middle East, electricity distribution
utilities and electricity regulators had to change their modes of operation as a result of the global
pandemic. In countries most affected by Covid-19, electricity distribution utilities commenced operating
under strict emergency guidelines. Although guidelines vary from country to country, in most cases
emergency operations include limiting the number of personnel working on the ground, limiting services
to essential repair works, postponing non-critical upgrades as well as offering lenient payment plans to
customers. Doing Business intends to understand how different countries changed their electricity supply
processes to comply with the new regulations and social distancing norms. It will identify the scope of
“essential” electricity services; assess changes and delays to ongoing and new infrastructure upgrade and
electricity connection projects, as well as assess changes to electricity tariffs and payment schedules.

Registering Property
When it comes to Registering Property, Doing Business will assess the different initiatives taken by
governments to ensure business continuity of the Land Registry and the Cadastre. It will provide
information on the preparedness of economies during the Covid-19 pandemic. For instance, the project
will assess whether business hours have been altered, whether a national contingency plan is in place to
ensure business continuity, and whether initiatives were taken by the government to facilitate land
transactions during this crisis (such as enforcing the use of the online platform to submit applications to
register property, or offering lower interest rates to encourage land transactions) .

Getting Credit
Through its network of credit reporting service providers, collateral registries, banks and other private
sector representatives, Doing Business will collect information on how the Covid-19 pandemic has
affected access to credit - specifically the credit reporting infrastructure - and the rights of borrowers and
secured creditors. In the area of credit information, this research includes actions by the government to
protect the economy from the effects of the pandemic, changes to the credit information structure, as
well as the outbreak’s effect on the supply and demand for credit data. This effort will contribute to
creating a single database of steps that governments and credit information providers are taking to
mitigate the impact of the outbreak on the financial sector and on credit reporting systems. In the area of
legal rights, Doing Business will collect data on various changes in the law adopted as part of emergency
measures that aim to protect borrowers and facilitate lending activity, which may include expanding the
pool of assets used as collateral and imposing moratoriums on both in court and out of court enforcement
of claims. Doing Business will also focus on operations of a collateral registry during the pandemic. In
economies with modern secured transaction systems, collateral registries shall remain operational and
their use shall increase provided that the lending activity in the economy continues. In others, collateral
registries might be either shut down or might operate in a limited capacity, with some services either
slowed down or unavailable.

Protecting Minority Investors

Capital market operations and company milestones are being disrupted worldwide. With movement
restrictions in place in many economies, firms are facing practical constraints. They may not be able to
convene either board meetings or general meetings. In normal times, these meetings are essential for
companies to run, pass key resolutions, approve finances and meet government filing requirements. The
research aims at identifying the extent of disruptions as well as whether technology and regulators are
taking steps to accommodate or mitigate the effects. For example, it will assess whether trading has been
suspended, whether filing deadlines have been postponed or whether firms are allowed to convene
meetings and count votes virtually.

Paying Taxes
Governments around the world are implementing tax relief measures to address the problem of liquidity
for households and businesses during this health crisis. The relief measures fall into several categories by
the type of taxes that are affected - personal taxes, business taxes, consumption taxes - and by the type
of actions undertaken - extension of deadlines, deferral or waiver of payments, reduction in rates,
speeding up tax refunds, suspension of tax audits, waiver of late payment surcharges and interest, etc.
Doing Business will be analyzing the measures by type of action taken. Additionally, Doing Business will
monitor how the Covid-19 pandemic has affected the services provided by the tax administrations
globally. This includes: reduction/extension of office hours, office closures, remote work for tax agents,
access restriction to offices, delays or suspension in issuing advance tax rulings, and issuing tax refunds,
delays/suspension of audit process, shifting functions to online such as filing of tax returns/payment of
taxes instead of in-person visits.

Trading across Borders

In the area of Trading across Borders, Doing Business will assess the impact of the Covid-19 outbreak on
the process of exporting or importing goods in an economy. The research aims at understanding the
operational status of local ports and land borders as well as alterations in the export and import
procedures. It will analyze whether ports and land borders remain operational and for which type of trade
operations (i.e. regular trade; trade of basic goods). Besides, it will assess if additional control procedures
are in place related to Covid-19 (i.e. fumigation; inspections; documents; etc.). The aim of the research is
to measure if importers and exporters are able to trade in each economy in the context of Covid-19.

Enforcing Contracts
Regarding Enforcing Contracts, Doing Business will look at the operations of courts during the pandemic.
The research questions address whether and how courts can continue operations; and what Covid-19
related measures have authorities taken in the short term (i.e. during the pandemic) and in the medium
term (i.e. once normal operations resume). Such measures could include temporarily allowing hearings
via phone or videoconference, relaxing rules of procedure, temporarily allowing filing of cases, service of
summons or notifications between the court and the parties to a dispute via email, suspending procedural
deadlines, limiting court operations to urgent matters, creating specific venues to resolve breach of
contract disputes related to the Covid-19 situation, etc. This is relevant to understand what measures
courts are putting in place to minimize the impact of unexpected external shocks on normal operations.

Resolving Insolvency
The Covid-19 pandemic crisis will result in a large number of companies—including many SMEs—facing
defaults and illiquidity. Across the world, businesses look to governments with a hope that specific
solutions are implemented to prevent a rapid increase in corporate indebtedness and save viable
companies hit by the crisis from going bankrupt, which would drive an increase in alternative and creative
mechanisms to prevent bankruptcy and keep distressed companies as a going concern. On this basis,
Doing Business will explore how the Covid-19 pandemic engendered instruments to prevent premature
bankruptcies of healthy companies and what measures have been enacted to modify the insolvency
framework. Those instruments could include: suspension of all debt-collection activities against debtors
and implementing statutory moratoriums on foreclosure proceedings; promotion of out-of-court
workouts (OCW); promotion of pre-insolvency proceedings which give a debtor in financial difficulties the
opportunity to restructure and to avoid the commencement of formal insolvency proceedings; revision of
the existing insolvency standards on a temporary basis; measures promoting access new credit,
refinancing existing loans, writing off debts, injection of cash.

Contracting with the Government

The Covid-19 pandemic is having a considerable impact on public procurement processes. Governments
are prioritizing the purchase of essential goods and services to fight the pandemic. Given the short number
of suppliers and the time pressure, most purchases are being carried out through direct methods of
procurement. While these methods are faster to get the goods or services, they also limit competition
and have higher risks of faulty implementation. Using a standardized works contract as a comparative
baseline, the pilot indicator on public procurement measured by Doing Business asks what the most
common method of procurement for such contract is. Lockdown regimes may be used to award contracts
directly even though they might not be related to the pandemic. In addition, the indicator also captures
aspects of contract management that might be affected by the pandemic, such as how often contract
renegotiations would be justified due to emergency grounds, and how often simple road resurfacing
works would be delivered within budget and within the initially agreed timeline. Finally, it collects data on
the likelihood of some irregular public procurement practices that might arise in exceptional situations
with limited oversight.
 Subnational Doing Business 2021 – Research on Covid-19

As part of the Subnational Doing Business study currently being conducted in Brazil, in partnership with
the Government, the team will collect data and analyze the impact of Covid-19 for entrepreneurs. Through
the life cycle of a domestic company, the research will assess the effects of Covid-19 and the measures
taken by Brazilian state and local authorities to respond to the challenges posed by the pandemic. This
initiative aims to shed light on policy measures different state governments have taken to ensure
continuity in the provision of businesses services—both contingency plans organized around the health
crisis, but also long-term solutions (i.e., online services) that would tackle both the challenges presented
by the crisis but would also serve businesses well after. The data is collected in the 26 state capitals plus
the national capital (Brasília), in five Doing Business indicator areas: starting a business, dealing with
construction permits, registering property, paying taxes and enforcing contracts.

Contact people:
Rita Ramalho
Senior Manager
rramalho@[Link]

Valeria Perotti
Program Manager
vperotti@[Link]