Monday, 22 June 2015

Do foreign owners have a more difficult time in Rwanda than local owners?

Foreign owners of companies can suffer some disadvantages relative to local owners.  As foreign owners may not know the best ways to protect their assets or handle local officials, they may fall victims to crime more easily, or they may suffer delays in administration, or they may be excluded from government contracts.

A 2011 survey of medium sized companies in Rwanda found that foreign companies did experience a higher rate of crime (in the form of theft, robbery, vandalism, or arson in the previous year):

Companies experiencing crime in the previous year:
Foreign owners: 38%
Rwandan owners: 24%

For the amount of time spent on government regulation, the advantage is reversed - foreign owners spend less time on them:

Percentage of management time spent on government regulation in the previous year:
Foreign owners: 8%
Rwandan owners: 11%

When it comes to corruption, foreign owners say that it is less of a problem for them:

How severe is corruption as a problem, on a scale of 0 (no problem) to 4 (very severe problem)?
Foreign owners: 0.3
Rwandan owners: 0.8

Overall, it looks like foreign owners are not at a disadvantage relative to Rwandan owners, at least in the factors considered here, although crime may be more of an issue for them.

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