BizCLIR

Closing a business is a complicated decision in itself; when a business must consider the country's laws and regulations that allow it to take place, the experience can be overwhelming. A sound insolvency system is a basic necessity for economies in transition, where it can play a crucial role in addressing the problems of insolvent state-owned enterprises, and also for failing enterprises in need of an exit plan. A clear and enforceable insolvency system permits businesses to efficiently reallocate the debtor's resources, which itself leads to greater confidence in the security of investments.

The Doing Business indicators identify weaknesses in existing bankruptcy law and the main procedural and administrative bottlenecks in the bankruptcy process by reviewing: average time to complete a procedure, cost of the bankruptcy proceedings, and the recovery rate, which calculates how many cents on the dollar claimants (creditors, tax authorities, and employees) recover from an insolvent firm.

The BizCLIR methodology probes further into the system of insolvency to understand its role in a developing economy. BizCLIR's tool takes extra steps to review the whole business, legal and social environment as it relates to bankruptcy. It considers the content and implementation of the bankruptcy law, as it must be compatible and coordinated with other aspects of a country's legal system and be in line with implementing and supporting institutions. A team of experts interview stakeholders in government, the private sector, and civil society to understand the process of closing a business. These areas are evaluated using indicators divided among the four pillars:

BizCLIR's inclusive investigation allows for a 360-degree view of the current business environment. BizCLIR's qualitative assessment of the entire system helps us understand the reasoning underlying the indicator scores. For example, if a Doing Business report shows that it takes 5.7 years to close a business in the Philippines, BizCLIR's analysis will clients understand why. Perhaps the paperwork is too cumbersome for supporting institutions to handle, or maybe the country's key stakeholders are not receptive to change and refuse to permit it. These answers create an opportunity to change a country's economy at its core. BizCLIR's analysis offers our clients rapid, comprehensive assessments and recommendations in order to determine real solutions for the world's developing economies.