Business environment in Saudi Arabia is making great strides as shown in this year's Forbes list of “Best Countries for Business,” in which it has been dramatically elevated to number 47 spot, up 37 slots from a year ago. Topping the list for 2008 is Denmark, which rose three slots from last year, Ireland (up 19 places to No. 2), Finland (up four to third place), the US (down three to fourth) and UK (up five to fifth). Big movers like Ireland, Estonia (No. 10, up 24 spots) and Saudi Arabia (No. 47, up 37) “have limited bureaucracy standing in the way of entrepreneurs hoping to do business within their borders,” the report said. Saudi Arabia, despite higher inflation, has tackled inequities in its markets, expanding investor rights as it evolves from an oil producer to a center for investment in the Middle East. Low inflation and unemployment, an emphasis on entrepreneurship and lower taxes, plus high marks for innovation and technological savvy, were the primary criteria used by Forbes in the 3rd annual ranking of the Best Countries for Business (formerly the Forbes Capital Hospitality Index). The report covered and analyzed business climates in each of more than 120 national economies, focusing on degrees of personal freedoms, like freedom of expression and organization. Protection of investor examines the recourse held by minority shareholders in cases of corporate misdeeds, while corruption looks at the number and frequency of similar misuse of corporate assets for personal gain. Together with economic policies supportive of free trade and low inflation, these key points form a snapshot of countries' suitability for capital investment. Ireland continued to see businesses take advantage of its low levy on corporate profits as pharmaceutical company Shire became the latest to relocate from the UK in April of this year. EBay subsidiary and telecommunications company Skype calls Estonia home, thanks to its emerging profile as a technology center in the Baltics. India (No. 64, down 13) and China (No. 79, down two) fell in this year's ranking as political instability demonstrated resistance to increasing personal freedoms. Higher inflation from food and other commodity costs, as well as increased burdens on entrepreneurs also held the world's most populous nations back as business destinations. In developed nations like Germany (No. 21, down nine) and France (No. 25, down nine), scandals in the banking sector and tougher barriers for entrepreneurs led to declines. Meanwhile, anti-bureaucrat leaders like president Lech Kaczynski and prime minister Mirek Topolanek are succeeding in introducing more business friendly reforms to Europe's smaller participants in Poland (No. 33, up six) and the Czech Republic (No. 29, unchanged), respectively. One of the biggest declines came from Japan (No. 24, down 21), where a Council on Economic and Fiscal Policy spelled out problems with the world's second-largest economy earlier this year. Among others, the committee's report cites the nation's 40 percent corporate tax rate as uncompetitive compared with regional rivals like Hong Kong at 17.5 percent and South Korea at 25 percent. Antiquated restrictions on foreign investment are also a concern. So-called cross-shareholdings that limit the ability of foreign investors to take controlling stakes in Japanese companies is just one example of why foreign direct investment totaled a paltry 2.5 percent of GDP in 2006. That compares to 13.5 percent in the US and 40 percent in Britain. Expertise, research and published reports from the Heritage Foundation, World Economic Forum, World Bank, Transparency International, Freedom House, Deloitte Tax, the US Chamber of Commerce and Central Intelligence Agency all contributed vital analyses of various socioeconomic indicators on the countries included. __
