Doing Business 2018 United States Economy Pro le of United States Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation United States Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region OECD high income DB 2018 Rank 190 1 United States Income Category High income 6 Population 323,127,513 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 56,180 0 100 82.54 City Covered New York City DB 2018 Distance to Frontier (DTF) 0 100 82.54: United States (Rank: 6) 82.22: United Kingdom (Rank: 7) 79.29: Canada (Rank: 18) 79.00: Germany (Rank: 20) 77.46: Regional Average (OECD high income) Page 3   aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) United States Ease of Doing Business in Region OECD high income DB 2018 Rank 190 1 United States Income Category High income 6 Population 323,127,513 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 56,180 0 100 82.54 City Covered New York City DB 2018 Distance to Frontier (DTF) 0 100 82.54: United States (Rank: 6) 82.22: United Kingdom (Rank: 7) 79.29: Canada (Rank: 18) 79.00: Germany (Rank: 20) 77.46: Regional Average (OECD high income) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - United States 2 3 1 16 28 36 37 36 36 42 49 49 55 82 Rank 109 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - United States 100 95.00 91.23 92.01 91.07 82.14 84.13 80 75.77 76.80 72.61 64.67 60 DTF 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:0.00 Change:0.00 Change:0.00 Investors Change:+0.05 Borders Change:0.00 Change:-0.11 Change:0.00 Permits Change:0.00 Change:0.00 Change:+0.03 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:0.00 Change:0.00 Change:0.00 Investors Change:+0.05 Borders Change:0.00 Change:-0.11 Change:0.00 Permits Change:0.00 Change:0.00 Doing Business 2018 United States Change:+0.03 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Page 5   Starting a Business - New York City before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 United States Starting a Business - New York City Standardized Company Legal form NY Limited Liability Company Paid-in minimum capital requirement USD 0 City Covered New York City OECD high OECD high Indicator New York City income income Overall Best Performer Procedure – Men (number) 6 4.9 4.9 1.00 (New Zealand) Time – Men (days) 4 8.5 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 1.3 3.1 3.1 0.00 (United Kingdom) Procedure – Women (number) 6 4.9 4.9 1.00 (New Zealand) Time – Women (days) 4 8.5 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 1.3 3.1 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 8.7 8.7 0.00 (113 Economies) Figure – Starting a Business in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 98.23: Canada (Rank: 2) 94.58: United Kingdom (Rank: 14) 91.61: New York City 83.46: Germany (Rank: 113) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in New York City – Procedure, Time and Cost Time Cost 4 0.9 3.5 0.8 ome per capita) 0.7 3 0.6 2.5 (days) Page 6   0.5 2 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 United States Figure – Starting a Business in New York City – Procedure, Time and Cost Time Cost 4 0.9 3.5 0.8 Cost (% of income per capita) 0.7 3 0.6 2.5 Time (days) 0.5 2 0.4 1.5 0.3 1 0.2 0.5 0.1 0 0 1 2 3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in New York City – Procedure, Time and Cost Time to Associated No. Procedure Complete Costs 1 Reserve the company's business name (optional), le the company's articles of Less than one USD 275 (USD organization and adopt the company's operating agreement day (online 200 filing fee, Agency : New York State Department of State, Division of Corporations procedure) USD 75 expedited The company founders may reserve the name of the company with the New York State service fee) Department of State Division of Corporations prior to ling the company's articles of organization. To reserve a name, the founders should le an application for Reservation of Name and pay a fee of USD 20. The name reservation can be done online at the following: http://www.dos.ny.gov/corps/llccorp.html . The application holds the name for 60 days and may be extended twice for additional periods of 60 days. The fee to extend the reservation of name is also USD 20. The company name must contain the words "Limited Liability Company," "L.L.C.," or "LLC." The founders must le the company's articles of organization with the New York Department of State Division of Corporations. Forms can be purchased at a legal supply store or downloaded from the department’s website. The application processing time is about seven business days. However, optional expedited processing is available according to the following fee schedule: - 2-hour turnaround: USD 150 (additional fee) - Same-day service: USD 75 (additional fee) - 24-hour turnaround: USD 25 (additional fee) New York State requires an LLC to have a written operating agreement but such agreement does not have to be led with the state. The business members may enter into an operating agreement before, at the time of, or within 90 days after the ling of the articles of organization. Regardless of when such an agreement was entered into, it Page 7   may be e ective upon the formation of the LLC or at a later date speci ed in the (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 United States Details – Starting a Business in New York City – Procedure, Time and Cost Time to Associated No. Procedure Complete Costs 1 Reserve the company's business name (optional), le the company's articles of Less than one USD 275 (USD organization and adopt the company's operating agreement day (online 200 filing fee, Agency : New York State Department of State, Division of Corporations procedure) USD 75 expedited The company founders may reserve the name of the company with the New York State service fee) Department of State Division of Corporations prior to ling the company's articles of organization. To reserve a name, the founders should le an application for Reservation of Name and pay a fee of USD 20. The name reservation can be done online at the following: http://www.dos.ny.gov/corps/llccorp.html . The application holds the name for 60 days and may be extended twice for additional periods of 60 days. The fee to extend the reservation of name is also USD 20. The company name must contain the words "Limited Liability Company," "L.L.C.," or "LLC." The founders must le the company's articles of organization with the New York Department of State Division of Corporations. Forms can be purchased at a legal supply store or downloaded from the department’s website. The application processing time is about seven business days. However, optional expedited processing is available according to the following fee schedule: - 2-hour turnaround: USD 150 (additional fee) - Same-day service: USD 75 (additional fee) - 24-hour turnaround: USD 25 (additional fee) New York State requires an LLC to have a written operating agreement but such agreement does not have to be led with the state. The business members may enter into an operating agreement before, at the time of, or within 90 days after the ling of the articles of organization. Regardless of when such an agreement was entered into, it may be e ective upon the formation of the LLC or at a later date speci ed in the operating agreement (provided, however, that under no circumstances shall an operating agreement become e ective prior to the formation of such company). Section 203(e) of NY LLC Law contains speci c requirements as to what is required to be in the articles of incorporation. 2 Apply for federal identi cation number (EIN) for tax and employer purposes Less than one no charge Agency : US Internal Revenue Service day (online procedure) The company needs to apply for a federal Employer Identi cation Number ("EIN"), which is used for tax and employer purposes. Founders must le IRS Form SS-4 (available from the US Internal Revenue Service). It is possible to apply online at http://www.irs.gov/Businesses/Small-Businesses-&-Self- Employed/Employer-ID-Numbers-EINs (processing time: immediate), by telephone (processing time: immediate), by fax (processing time: 4 business days), or by mail (processing time: 4 weeks). If applicants apply online, they do not need ll out IRS Form SS-4. 3 Register to collect state sales tax Less than one no charge Agency : New York State Department of Taxation and Finance day (online procedure) Businesses that "sell taxable tangible personal property, perform taxable services, receive amusement charges, or operate a hotel or motel, and restaurants, taverns, or other establishments that sell food and drink" must register as a sales tax vendor and obtain a Certi cate of Authority, as well as those businesses that buy and sell for resale Page 8   (for example, a wholesale distributor). See the Department of Taxation and Finance's (processing time: 4 weeks). If applicants apply online, they do not need ll out IRS Form DoingSS-4. Business 2018 United States 3 Register to collect state sales tax Less than one no charge Agency : New York State Department of Taxation and Finance day (online procedure) Businesses that "sell taxable tangible personal property, perform taxable services, receive amusement charges, or operate a hotel or motel, and restaurants, taverns, or other establishments that sell food and drink" must register as a sales tax vendor and obtain a Certi cate of Authority, as well as those businesses that buy and sell for resale (for example, a wholesale distributor). See the Department of Taxation and Finance's O cial Publication 750, "A Guide to Sales Tax in New York State." To register, the founders must le Form DTF-17 or register online at the website of the New York State Department of Taxation and Finance (http://www.tax.ny.gov/). After the company has registered, it generally must le quarterly sales and use tax returns regardless of whether it has started or done any business. If the company expects to make taxable sales in the State of New York, it must register with the Tax Department at least 20 days before it begins business. New York State will then send to the company a Certi cate of Authority which must be displayed at your place of business at all times. 4 Register as an employer with the Unemployment Insurance Division at the State Less than one no charge Labor Department day (online Agency : New York State Department of Labor procedure) Founders must register as an employer by completing Form NYS-100 to determine whether or not the company is liable under the New York State Unemployment Insurance Law. If the company is determined liable, the Department of Labor will send the company quarterly combined withholding, wage reporting and unemployment insurance returns for reporting wages paid to the company's employees. General business employers may register online at the New York State Department of Labor website (https://applications.labor.ny.gov/eRegWeb/registerEmployer/uiEPMWelcomeMain.faces) or by completing Form NYS-100 and submitting it by mail or fax. 5 Arrange for workers' compensation and disability insurance 1 day no charge Agency : New York State Workers' Compensation Board As New York employers, the LLC founders must obtain and maintain workers’ compensation insurance and disability insurance for its employees by purchasing a workers’ compensation insurance policy and a disability bene ts insurance policy from an authorized private insurance carrier or through the NYS Insurance Fund (or by self- insurance for workers' compensation). The company’s federal Employer Identi cation Number (""EIN"") is the company’s primary identi cation with respect to communications with the Workers’ Compensation Board or by becoming a member of a group self-insurer authorized by the board. The company must give its EIN to its insurance carrier when obtaining or maintaining its workers’ compensation or disability coverage. Workers’ compensation insurance oor is calculated using each employee’s risk classi cation, salary, and total payo . 6 Arrange for publication and submit certi cate and a davits of publication 1 day USD 475 Agency : New York State Department of State, Division of Corporations Section 206 of the New York State Limited Liability Company Law requires that within 120 days (after the e ectiveness of the initial articles of organization), a limited liability company (LLC) must publish in two newspapers a copy of the Articles of Organization or a notice related to the formation of the LLC once a week for six successive weeks. The newspapers must be designated by the county clerk of the county in which the o ce of the LLC is located, as stated in the Articles of Organization. Page 9   The State of New York website has a directory of all New York county websites compensation or disability coverage. Workers’ compensation insurance oor is Doingcalculated Business using 2018 employee’s each United risk classi cation, salary, and total payo . States 6 Arrange for publication and submit certi cate and a davits of publication 1 day USD 475 Agency : New York State Department of State, Division of Corporations Section 206 of the New York State Limited Liability Company Law requires that within 120 days (after the e ectiveness of the initial articles of organization), a limited liability company (LLC) must publish in two newspapers a copy of the Articles of Organization or a notice related to the formation of the LLC once a week for six successive weeks. The newspapers must be designated by the county clerk of the county in which the o ce of the LLC is located, as stated in the Articles of Organization. The State of New York website has a directory of all New York county websites (http://www.nysegov.com/citguide.cfm?context=citguide&content=munibycounty1), which entrepreneurs can use as a reference to nd their relevant county for publishing. The cost of notice of publication varies by county. After publication, the printer or publisher of each newspaper will provide the entrepreneur with a Certi cate of Publication, with the a davits of publication of the newspapers attached. It must be submitted to the New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231. The fee for ling the Certi cate of Publication is USD 50. Applies to women only. Takes place simultaneously with previous procedure. Starting a Business - Los Angeles Standardized Company Legal form Limited Liability Company Paid-in minimum capital requirement USD 0 City Covered Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Procedure – Men (number) 6 4.9 4.9 1.00 (New Zealand) Time – Men (days) 8 8.5 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 0.8 3.1 3.1 0.00 (United Kingdom) Procedure – Women (number) 6 4.9 4.9 1.00 (New Zealand) Time – Women (days) 8 8.5 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 0.8 3.1 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 8.7 8.7 0.00 (113 Economies) Figure – Starting a Business in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 Page 10   Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 United States Starting a Business - Los Angeles Standardized Company Legal form Limited Liability Company Paid-in minimum capital requirement USD 0 City Covered Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Procedure – Men (number) 6 4.9 4.9 1.00 (New Zealand) Time – Men (days) 8 8.5 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 0.8 3.1 3.1 0.00 (United Kingdom) Procedure – Women (number) 6 4.9 4.9 1.00 (New Zealand) Time – Women (days) 8 8.5 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 0.8 3.1 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 8.7 8.7 0.00 (113 Economies) Figure – Starting a Business in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 98.23: Canada (Rank: 2) 94.58: United Kingdom (Rank: 14) 90.66: Los Angeles 83.46: Germany (Rank: 113) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Los Angeles – Procedure, Time and Cost Time Cost 8 0.9 7 0.8 ome per capita) 0.7 6 0.6 5 (days) Page 11   0.5 4 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 United States Figure – Starting a Business in Los Angeles – Procedure, Time and Cost Time Cost 8 0.9 7 0.8 Cost (% of income per capita) 0.7 6 0.6 5 Time (days) 0.5 4 0.4 3 0.3 2 0.2 1 0.1 0 0 1 2 3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Los Angeles – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Reserve the company name and le the Articles of Organization 2 days (with 24- USD 70 (official fee Agency : California Secretary of State hour rush filing) for organization of an LLC) + USD 10 Organization of the company (i.e., company registration) has to be done in (name reservation person at the O ce of the Secretary of State of California located in fee) + USD 350 (24- Sacramento or can be mailed to the O ce of the Secretary of State of hour rush fee) California. The formation date is the date in which the document is received and accepted by the Secretary of State. The company may hire a “messenger” located in Sacramento to le on its behalf so that founders do not have to personally go to the Secretary of State o ce. The fee for hiring a messenger would be USD 20 in addition to the o cial company organization fees. The name of the limited liability company may not contain the words "bank," "trust," "trustee," "incorporated," "inc.," "corporation," or "corp.," and the name must not contain the words "insurer" or "insurance company" or any other words suggesting that it is in the business of issuing policies of insurance and assuming insurance risks. Pursuant to Section 17702.01, Articles of Organization shall contain the below statement: The purpose of the Limited Liability Company is to engage in any lawful act or activity for which a limited liability company may be organized under the California revised uniform Limited Liability Company Act. Page 12   (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 United States Details – Starting a Business in Los Angeles – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Reserve the company name and le the Articles of Organization 2 days (with 24- USD 70 (official fee Agency : California Secretary of State hour rush filing) for organization of an LLC) + USD 10 Organization of the company (i.e., company registration) has to be done in (name reservation person at the O ce of the Secretary of State of California located in fee) + USD 350 (24- Sacramento or can be mailed to the O ce of the Secretary of State of hour rush fee) California. The formation date is the date in which the document is received and accepted by the Secretary of State. The company may hire a “messenger” located in Sacramento to le on its behalf so that founders do not have to personally go to the Secretary of State o ce. The fee for hiring a messenger would be USD 20 in addition to the o cial company organization fees. The name of the limited liability company may not contain the words "bank," "trust," "trustee," "incorporated," "inc.," "corporation," or "corp.," and the name must not contain the words "insurer" or "insurance company" or any other words suggesting that it is in the business of issuing policies of insurance and assuming insurance risks. Pursuant to Section 17702.01, Articles of Organization shall contain the below statement: The purpose of the Limited Liability Company is to engage in any lawful act or activity for which a limited liability company may be organized under the California revised uniform Limited Liability Company Act. The special handling fee or preclearance and expedited ling services are not applicable to documents submitted by mail. In addition to the time-frames speci ed in the previous years report, the Secretary of State o ers a 4-hour expedited ling service for additional $500.00 to those who precleared their documents, i.e. submitted their documents for review in advance and paid special fee. 2 Apply for a Federal Employer Identi cation Number (EIN) Less than one day no charge Agency : US Internal Revenue Service (online procedure) The company needs to apply for the federal employer identi cation number (""EIN""), used for tax and employer purposes, founders must le IRS Form SS-4 (available from the US Internal Revenue Service). It is possible to apply online (processing time: immediate), by telephone (processing time: immediate), by fax (processing time: 4 business days) or by mail (processing time: 4 weeks). 3 Register for California State Sales Tax and Obtain Seller’s Permit from Less than one day no charge the California Board of Equalization (online procedure) Agency : Board of Equalization Businesses that are either: (i) engaged in business in California; (ii) intend to sell or lease tangible personal property that would ordinarily be Page 13   subject to sales tax if sold at retail (this includes wholesalers, manufactures (processing time: immediate), by fax (processing time: 4 business days) or by Doing mail (processing Business 2018 time: 4 weeks). United States 3 Register for California State Sales Tax and Obtain Seller’s Permit from Less than one day no charge the California Board of Equalization (online procedure) Agency : Board of Equalization Businesses that are either: (i) engaged in business in California; (ii) intend to sell or lease tangible personal property that would ordinarily be subject to sales tax if sold at retail (this includes wholesalers, manufactures and retailers.); or (iii) will make sales for a temporary period, normally lasting no longer than 90 days at one or more locations (for example, reworks booth, Christmas tree lots, garage sale) must register for a seller’s permit with Board of Equalization (""BOE"") . A company may register online at the BOE website or in person at one of the BOE eld o ces. After the company has registered, the BOE assigns a ling frequency (quarterly prepay, quarterly, monthly, scal yearly, yearly) based on your reported sales tax or your anticipated taxable sales at the time of registration. 4 Register for taxes with the City of Los Angeles and Obtain the Tax Less than one day no charge Registration Certi cate (TRC) (online procedure) Agency : City of Los Angeles O ce of Finance Pursuant to Section 21.03 of the Los Angeles Municipal Code (Imposition of Tax), every person engaged in any trade, calling, occupation, vocation, profession or other means of livelihood in the City of Los Angeles, must obtain a Tax Registration Certi cate (TRC) and pay the required business tax due, speci ed in Sections 21.41 to 21.199 of the Business Tax Ordinance. The O ce of Finance of the City of Los Angeles is responsible for the collection of business taxes. The amount of business tax due is based on the company’s gross receipts generated during the previous reporting period, subject to applicable reductions under City Clerk Rulings. After submitting the online application, a temporary business tax registration certi cate will be issued for the company to print and display at its place of business (please see below a sample TRC certi cate for a Professional Corporation, similar to that of a Limited Liability Company as an example). A permanent certi cate will be sent via mail and should arrive within 4 weeks from completing the online registration. Inspectors may sometimes pass by the business premises to make sure that this certi cate is properly displayed and that the taxpayer company has ful lled all of its tax duties. 5 Register for the California State Employer Payroll Tax Account Number Less than one day no charge Agency : Employment Development Department (online procedure) All employers conducting business in California are subject to the employment tax laws of the California Unemployment Insurance Code (CUIC). Pursuant to Section 1086 of the California Unemployment Insurance Code, every employer in California must register for employer tax payroll number. Once a business hires an employee, the business is considered an employer and must register with the Employment Development Department (EDD) within 15 days after paying wages in excess of $100 in a quarter. No distinction is made between full-time and part-time or permanent and temporary employees in meeting this requirement. Beginning January 1, 2017, Employers with 10 or more employees are now required to electronically submit employment tax returns, wage reports, and payroll tax deposits to the Employment Development Department. Page 14   is properly displayed and that the taxpayer company has ful lled all of its tax Doing duties. Business 2018 United States 5 Register for the California State Employer Payroll Tax Account Number Less than one day no charge Agency : Employment Development Department (online procedure) All employers conducting business in California are subject to the employment tax laws of the California Unemployment Insurance Code (CUIC). Pursuant to Section 1086 of the California Unemployment Insurance Code, every employer in California must register for employer tax payroll number. Once a business hires an employee, the business is considered an employer and must register with the Employment Development Department (EDD) within 15 days after paying wages in excess of $100 in a quarter. No distinction is made between full-time and part-time or permanent and temporary employees in meeting this requirement. Beginning January 1, 2017, Employers with 10 or more employees are now required to electronically submit employment tax returns, wage reports, and payroll tax deposits to the Employment Development Department. 6 File a Statement of Information with the California Secretary of State 4 days USD 20 Agency : California Secretary of State Pursuant to Article 2 (Formation: Articles of Organization and Other Filings [17702.09]) of the California Revised Uniform Limited Liability Company Act (RULLCA), every registered limited liability company must le a Statement of Information with the Secretary of State in Sacramento within 90 days after ling of its original Articles of Organization. In addition, a Statement of Information must be led every 2 years thereafter during the applicable ling period. The Statement of Information is to be led on form LLC-12 by mailing the form to the Secretary of State with a USD 20 ling fee. It can also be delivered in person to the Secretary of State's Sacramento o ce. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the Page 15   warehouse upon its completion. Does not include time spent gathering Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 United States Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures. Building quality control index (0-15) - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Dealing with Construction Permits - New York City Page 16   and 4 inches in diameter for the sewerage connection. Doing Business 2018 United States Dealing with Construction Permits - New York City Standardized Warehouse Estimated value of warehouse USD 2,901,253.90 City Covered New York City OECD high OECD high Indicator New York City income income Overall Best Performer Procedures (number) 15 12.5 12.5 7.00 (Denmark) Time (days) 89 154.6 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 0.3 1.6 1.6 0.10 (5 Economies) Building quality control index (0-15) 8.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.39: United Kingdom (Rank: 14) 78.16: Germany (Rank: 24) 73.44: New York City 72.87: Canada (Rank: 54) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in New York City – Procedure, Time and Cost Time Cost 0.14 80 0.12 70 Cost (% of warehouse value) 0.1 60 Time (days) 50 0.08 40 0.06 30 0.04 20 0.02 10 0 0 1 2 *3 4 5 6 7 *8 9 * 10 11 * 12 13 * 14 * 15 Page 17   component indicators. Doing Business 2018 United States Figure – Dealing with Construction Permits in New York City – Procedure, Time and Cost Time Cost 0.14 80 0.12 70 Cost (% of warehouse value) 0.1 60 Time (days) 50 0.08 40 0.06 30 0.04 20 0.02 10 0 0 1 2 *3 4 5 6 7 *8 9 * 10 11 * 12 13 * 14 * 15 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in New York City and comparator economies – Measure of Quality 16 14.0 14 12 11.4 9.5 Index score 10 9.0 8.0 8 6 4 2 0 New York City Canada Germany United Kingdom OECD high income Details – Dealing with Construction Permits in New York City – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit the new Zoning Diagram (ZD1), PW1, Schedule A, Form TR2 & TR3 30 days USD 2,040 and obtain approval Agency : New York City Department of Buildings (DOB) BuildCo must submit the Zoning Diagram (ZD1), PW1 and Schedule A. PW1 Plan/Work Approval Application must include information about the project such as a description, intended location, etc. However, separate PW1 applications must be led for: 1. General construction 2. Sprinkler protection 3. Fire alarm Page 18   4. Standpipe System New York City Canada Germany United Kingdom OECD high income Doing Business 2018 United States Details – Dealing with Construction Permits in New York City – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit the new Zoning Diagram (ZD1), PW1, Schedule A, Form TR2 & TR3 30 days USD 2,040 and obtain approval Agency : New York City Department of Buildings (DOB) BuildCo must submit the Zoning Diagram (ZD1), PW1 and Schedule A. PW1 Plan/Work Approval Application must include information about the project such as a description, intended location, etc. However, separate PW1 applications must be led for: 1. General construction 2. Sprinkler protection 3. Fire alarm 4. Standpipe System 5. Boiler 6. Plumbing 7. Pavement 8. Foundation and earth work 9. Electrical 10. Elevator/lift (to comply with law on disability) For Forms TR2 and TR3, the director of the licensed concrete laboratory must provide his/her name, sign and date the report, and place his/her seal in the space provided identifying responsibility of conducting the testing in accordance with Building Code 1905.6 and Building Code 1704.1. 2 Request and obtain plan approval from the New York City Department 21 days USD 3,640 of Buildings (DOB) Agency : New York City Department of Buildings (DOB) The applicant must be either a Registered Architect (RA) or a Professional Engineer (PE) to submit the plans. The Department of Buildings (DOB) reviews construction plans to ensure that they comply with the Building Code and meet current safety standards and zoning requirements. Once plans are approved, a contractor or contractor’s representative may apply for a construction work permit. Simple projects, as in the case of BuildCo, can opt for a fast-track service o ered by the New York City Department of Buildings (DOB), called the Professional Certi cation Program. The program, introduced in 1996, enables registered architects and professional engineers to certify, through an a davit signed by the owner, contractor, and all responsible professionals (architects, engineers, plumbers, and the like) that the plans they le with the department are in compliance with all applicable laws. This reduces the amount of time a builder normally would wait for a DOB permit by eliminating the process of DOB examination and approval of the plans. The professional certi cation must be submitted at the time of pre- ling and in advance. A professionally certi ed application goes through the same pre- ling, payment, and data entry process as normal applications: • Information on the availability of a public sewer system • If a private sewage treatment plant is proposed, evidence of submission of plans for approval of such a plant to the department of environmental protection and the department of health as required by law • The lot diagram showing compliance with the zoning resolution Page 19   • Information on the availability of a public sewer system • If a private sewage treatment plant is proposed, evidence of submission of Business Doing plans 2018 of United for approval States such a plant to the department of environmental protection and the department of health as required by law • The lot diagram showing compliance with the zoning resolution • The foundation plans • The oor and roof plans showing compliance with exit requirements • The detailed architectural, structural, and mechanical drawings • General description of the proposed work After analyzing the plans (assuming that all required documents are present), the DOB approves the application at the end of data entry. A professionally certi ed application does not go through plan examination. The applicant can check the application status by using the Buildings Information System and, upon approval, can retrieve the application folder from the DOB to apply for a permit. Twenty percent of all professionally certi ed applications are selected for audit within 10 days of rst permit issuance. The audits for new projects may take place within 30 days after the application is issued. The overall time of application clearance is 5 days on average. According to the 2008 Building Code No. 26-212, the fee for the new building permit is USD 0.26 per square foot. The plumbing permit and foundation fee are calculated inside the above at rate. The Building Code says that " fty percent of the total fee for the work permit, but not less than one hundred dollars, or the total fee for the work permit where such fee is less than one hundred dollars, shall be paid by or on behalf of the owner or lessee of the building premises or property a ected, and shall accompany the rst application for the approval of plans or other statement describing the building work when submitted prior to submission of the permit application; and the whole or remainder of the total fee shall be paid before the work permit may be issued.” Still, most companies of BuildCo’s size would opt to pay the amount upfront, not in two separate transactions. Only for large projects is dividing the amount widespread. Starting in 2011, the NYC Department of Buildings began accepting digital plans for new buildings. While our contributors have noted that the processing time isn't any faster in practice than submitting in person, it does allow the applicant more project control and improved accessibility to the plan examiner and inter-agency communications, as well as online tracking of application progress. 3 Submit application and receive Sewer Availability Certi cation 21 days no charge Agency : Department of Environmental Protection (DEP) Sewer certi cation application must be submitted by a New York State licensed Professional Engineer (PE) or Registered Architect (RA). Applicant submits 6 copies of the application form, signed and sealed by RA/PE, with signed cover letter, fees, attachments and completed checklist to DEP. DEP reviews the application to ensure it is accurate, complete and compliant with applicable DEP rules and regulations. DEP then issues Sewer Certi cation (valid for 2 years). Once the application is certi ed, the applicant is noti ed that it may be picked up from the DEP Borough Water and Sewer O ce or it may be mailed upon request. 4 Master Plumber applies for and receives Sewer Connection Permit 21 days USD 2,155 Agency : Department of Environmental Protection (DEP) The Licensed Master Plumber must apply for a Sewer Connection Permit Page 20   prior to obtaining the work permit. DEP Bureau of Water and Sewer reviews that it may be picked up from the DEP Borough Water and Sewer O ce or it Doing may be mailed Business upon request. 2018 United States 4 Master Plumber applies for and receives Sewer Connection Permit 21 days USD 2,155 Agency : Department of Environmental Protection (DEP) The Licensed Master Plumber must apply for a Sewer Connection Permit prior to obtaining the work permit. DEP Bureau of Water and Sewer reviews the permit application for accuracy and completion. Licensed Master Plumber brings stamped DEP permit along with permit fees to to DEP Bureau of Customer Service local o ce. Once the permit is approved, the Master Plumber can connect to water and sewage at any point during or after construction. 5 Notarize signatures of contractor and site safety manager on work 1 day USD 12 permit application form, PW2 form and cost a davit form (PW3 form) Agency : Notary The site safety manager must be an employee of BuildCo and possess a valid site safety manager certi cate. The cost a davit must be led to certify estimated and actual costs, in order to obtain a work permit. A site safety manager or site safety coordinator must be designated and present at the construction or demolition of a major building in accordance with Section 3310 of the New York Building Code. 6 Obtain work permit from the Department of Buildings (DOB) 1 day no charge Agency : Department of Buildings (DOB) After obtaining the Building permit, the company must request a work permit. The request should be accompanied by a copy of the current insurance policy of workers’ compensation insurance. This procedure must be done by the contractor even if they are not the owner of the land. Di erent types of work require separate licenses. However, in one application, more than one permit can be requested. For instance, plumbing and construction work permits can be requested in the same application. For a warehouse, BuildCo must request a new building permit, a plumbing permit, and a foundation and earthwork permit. The request must include the detailed architectural, structural, and mechanical plans. One to two days prior to construction works, the company must notify the DOB by phone. 7 Submit notice to Department of Buildings on commencement of 1 day no charge foundation and earthwork Agency : New York City Department of Buildings (DOB) The foundation and earthwork permit shall be issued on the condition that the applicant provides a written notice to the Department of Buildings at least 24 hours, but no more than 48 hours prior to the commencement of the foundation or earthwork. 8 Notify all the owners of adjacent plots about the works 1 day no charge Agency : Owners of adjacent plots Noti cation of adjacent owners, done 5 days prior to excavations for new building foundations, is necessary for obtaining the foundation and earthwork permit. 9 Request and obtain work permit from the Department of 2 days USD 50 Transportation Agency : Department of Transportation A Construction Activity Permit fee costs USD 50.00, and is valid for 90 days Page 21   unless otherwise stated. Once the 90 days expire, the company buys another building foundations, is necessary for obtaining the foundation and Doing earthwork Business permit. 2018 United States 9 Request and obtain work permit from the Department of 2 days USD 50 Transportation Agency : Department of Transportation A Construction Activity Permit fee costs USD 50.00, and is valid for 90 days unless otherwise stated. Once the 90 days expire, the company buys another work permit for the remaining period of construction. Upon applying, the company gets an account number, and the next day obtains the work permit. Unless otherwise authorized, permits shall be kept at the work site or designated eld headquarters at all times and shall be made available for inspection upon request of any police o cer or any authorized employee of the Departments of Environmental Protection, Buildings, Police, and Transportation, or any other city employees speci cally authorized by the Commissioner to enforce these rules. Receive on-site inspection by the Department of Transportation (DOT) 1 day USD 320 10 and obtain approval Agency : Department of Transportation Approval from the Department of Transportation is granted after inspection. 11 Request occupancy certi cate from the Department of Buildings (DOB) 1 day no charge Agency : Department of Buildings (DOB) Upon completion of construction, the company must arrange for DOB inspections. For construction and plumbing, the company should contact the borough o ce where property is located. After completion of satisfactory inspections and submission of the required llings (including inspections reports), DOB issues a new certi cate of occupancy that describes the legal use and occupancy of a property. Each application must be accompanied by an accurate and complete lot survey made by a licensed surveyor. If the certi cate of occupancy application is not signed by a professional engineer or registered architect, the form must be notarized by an o cial notary public. To obtain the certi cate of occupancy, the company must obtain the work permit/approval from the Bureau of Electrical Control, the Department of Environmental Protection, and the Department of Transportation. If these approvals have not yet been granted at the time of applying for the certi cate of occupancy, a temporary certi cate can be issued. The company then has a year to obtain all the necessary approvals. If the building does not comply with all the plans and the New York City building code, the company must make the necessary changes. Then the Department of Buildings inspects the warehouse again. This process is repeated until the building complies with all the rules. It is common to have 2 -- 3 inspections of this sort. Once the building passes the inspection, the issuance of the certi cate of occupancy is immediate. Receive nal inspection by the Department of Buildings (DOB) 1 day no charge 12 Agency : Department of Buildings (DOB) The inspection takes place after all inspections (electricity, water and sewerage, and transport) have taken place. 13 Obtain occupancy certi cate from the Department of Buildings (DOB) 8 days USD 100 Page 22   -- 3 inspections of this sort. Once the building passes the inspection, the Doing issuance Businessof the cate of occupancy certi United 2018 States is immediate. Receive nal inspection by the Department of Buildings (DOB) 1 day no charge 12 Agency : Department of Buildings (DOB) The inspection takes place after all inspections (electricity, water and sewerage, and transport) have taken place. 13 Obtain occupancy certi cate from the Department of Buildings (DOB) 8 days USD 100 Agency : Department of Buildings (DOB) Receive nal inspection by the Department of Environmental Protection 1 day no charge 14 (DEP) and obtain approval Agency : Department of Environmental Protection (DEP) Approval from the Department of Environmental Protection is granted after inspection. Receive sewer connection inspection and obtain Certi cate of Inspection 1 day no charge 15 Agency : Department of Environmental Protection (DEP) The licensed master plumber will notify DEP when sewer connection is ready for inspection. The trench must be open for any un-inspected length and all work on pipes, joints etc must be visible. The connection inspection must be scheduled at least 24 hours in advance. DEP will issue Certi cate of Inspection after all works are in compliance with the sewer certi cation. The original Certi cate of Inspection is stored with the DEP Burough Water and Sewer O ce and a copy is sent to the plumber and DOB. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in New York City – Measure of Quality Answer Score Building quality control index (0-15) 8.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect. Quality control during construction index (0-3) 0.0 What types of inspections (if any) are required by law to be carried out during No inspections 0.0 construction? (0-2) are legally required during construction.. Page 23   Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 0.0 Takes place simultaneously with previous procedure. Doing Business 2018 United States Details – Dealing with Construction Permits in New York City – Measure of Quality Answer Score Building quality control index (0-15) 8.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect. Quality control during construction index (0-3) 0.0 What types of inspections (if any) are required by law to be carried out during No inspections 0.0 construction? (0-2) are legally required during construction.. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 0.0 inspections are not always done in practice during construction. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural aws or problems in the No party is held 0.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Page 24   Professional certi cations index (0-4) 2.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the Doing Business 2018 United States law. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 2.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certi cation exam. What are the quali cation requirements for the professional who supervises the Minimum 0.0 construction on the ground? (0-2) number of years of experience; Being a registered architect or engineer. Dealing with Construction Permits - Los Angeles Standardized Warehouse Estimated value of warehouse USD 2,901,253.90 City Covered Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Procedures (number) 17 12.5 12.5 7.00 (Denmark) Time (days) 68 154.6 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 1.9 1.6 1.6 0.10 (5 Economies) Building quality control index (0-15) 13.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 Page 25   80.39: United Kingdom (Rank: 14) architect or engineer. Doing Business 2018 United States Dealing with Construction Permits - Los Angeles Standardized Warehouse Estimated value of warehouse USD 2,901,253.90 City Covered Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Procedures (number) 17 12.5 12.5 7.00 (Denmark) Time (days) 68 154.6 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 1.9 1.6 1.6 0.10 (5 Economies) Building quality control index (0-15) 13.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.39: United Kingdom (Rank: 14) 79.27: Los Angeles 78.16: Germany (Rank: 24) 72.87: Canada (Rank: 54) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Los Angeles – Procedure, Time and Cost Time Cost 1.8 60 1.6 Cost (% of warehouse value) 1.4 50 1.2 Time (days) 40 1 30 0.8 0.6 20 0.4 10 0.2 Page 26   0 0 component indicators. Doing Business 2018 United States Figure – Dealing with Construction Permits in Los Angeles – Procedure, Time and Cost Time Cost 1.8 60 1.6 Cost (% of warehouse value) 1.4 50 1.2 Time (days) 40 1 30 0.8 0.6 20 0.4 10 0.2 0 0 1 *2 *3 *4 5 6 7 8 9 10 11 12 13 * 14 15 16 17 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Los Angeles and comparator economies – Measure of Quality 16 14.0 14 13.0 12 11.4 9.5 Index score 10 9.0 8 6 4 2 0 Los Angeles Canada Germany United Kingdom OECD high income Details – Dealing with Construction Permits in Los Angeles – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Receive building plan check and permit 15 days USD 48,646 Agency : Department of Building and Safety (LADBS) Building plans are screened for completeness and accuracy. An option to expedite the plan check is available for an expedite fee of 50% of the plan check fee. Plans that are expedited are usually handled in 5 calendar days, as expedited plans can include weekend work, instead of the normal 3-4 week waiting period. Smaller projects such as tenant improvements and small o ces may receive a counter plan check that takes only 45-60 minutes. Page 27   Building plans must be submitted to the Department of Building and Safety, Los Angeles Canada Germany United Kingdom OECD high income Doing Business 2018 United States Details – Dealing with Construction Permits in Los Angeles – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Receive building plan check and permit 15 days USD 48,646 Agency : Department of Building and Safety (LADBS) Building plans are screened for completeness and accuracy. An option to expedite the plan check is available for an expedite fee of 50% of the plan check fee. Plans that are expedited are usually handled in 5 calendar days, as expedited plans can include weekend work, instead of the normal 3-4 week waiting period. Smaller projects such as tenant improvements and small o ces may receive a counter plan check that takes only 45-60 minutes. Building plans must be submitted to the Department of Building and Safety, including: • Description of the work to be covered by the permit. • Description of the land on which the proposed work is to be done, and the street address. • Description of the use for which the proposed work is intended. • Two sets of site plans, including all boundaries, lot lines, existing and proposed buildings and structures, neighboring public ways, and dimensions. • Valuation of any new building. • Be signed by the permittee, or an authorized agent. • Give such other data and information as may be required by the Superintendent of Building. Building plan checks include electrical, mechanical, disabled access and structural plan checks. Grading plan checks may also be required if the location is in a hillside area. Mechanical plan checks may also be required when there are HVAC systems or elevators required. HVAC systems may be required if the building is in the desert areas, but would not be required in the beach or basin areas. BuildCo's warehouse is also not likely to require an elevator, according to the CBC Title 42 Chapter 11B, because it is fewer than three stories, and "a reasonable portion of [the] facilities and accommodations normally sought by the public... are accessible to and usable by persons with disabilities." Costs include: - For the plan check, a total of $22,782.75 including: • Plan check fee: $9,699 (90% of the building permit fee) but if expedited this amounts to $14,548.53 (additional 50% of the plan check fee for expedited services) • Planning fee: $1,610.34 • One stop surcharge: $290.97 • System development surcharge: $872.91 • Arts development surcharge: $5,460.00 ($0.39 / sq. ft. and it is only applicable to commercial projects valued at $500,000 or more) - For the building permit, total of $25,863.45 including: • Permit fee: $10,776.69 • Fire hydrant fee: $5,526.82 • Plan maintenance fee: $215.53 • EQ instrumentation fee: $531.38 Page 28   • Planning fee: $1,209.14 - For the building permit, total of $25,863.45 including: • Permit fee: $10,776.69 Doing •Business 2018 Fire hydrant United States fee: $5,526.82 • Plan maintenance fee: $215.53 • EQ instrumentation fee: $531.38 • Planning fee: $1,209.14 • One stop surcharge: $230.47 • System development surcharge: $691.42 • State green building surcharge: $102.00 • School district fee: $6,580.00 (applicable to projects with a total area of 500 square feet or more) 2 Receive plumbing plan check and permit 1 day USD 376 Agency : Department of Building and Safety (LADBS) The cost includes the following: - For the plumbing plan check, a total of $179.63 including: • Plan check fee of $110.88 (70% of the plumbing permit fee) but if expedited this amounts to $166.32 (additional 50% of the permit fee for expedited services) • One stop surcharge: $3.33 • System development surcharge: $9.98 - For the plumbing permit, a total of $195.91 including: • Expedited permit includes: 1 sink/lavatory ($23.00), 1 water service connection ($64.00), one water using device (sub-pump) ($17.00), 1 public sewer connection ($40.00) • Permit issuance fee: $23 • One stop surcharge: $3.63 • System development surcharge: $10.88 3 Bonded plumber applies for and receives sewer connection permit. 1 day USD 715 Agency : Los Angeles Department of Sanitation A sewer permit is required for all new connections to sewers. This is an over- the-counter permit and can be issued in as little as 30 minutes. In order to issue an S-Permit, BuildCo must identify the address of the property and work. This will be veri ed by the Bureau of Engineering (BOE) sta , and they will con rm the availability of the main line sewer. Furthermore, the BOE District O ce where the project is located must be identi ed, in case the District Engineer’s input is required. Only a bonded plumber can apply for this permit. The Doing Business methodology assumes that BuildCo has a registered plumber on sta . The cost includes: • $265 at fee • 2% one-stop surcharge • 7% equipment and training surcharge • $2.84 per linear foot of sewer connection for the inspection 4 File a Service Advisory Request (SAR) and receive the maximum ow 10 days USD 210 requirements report Agency : Los Angeles Department of Water and Power A Service Advisory Request (SAR) must be led with the Los Angeles Department of Power and Water. Information required: • Address of proposed service installation or legal description of property • Proposed service location (distance from property line or distance to Page 29   • 7% equipment and training surcharge $2.84 per linear Doing •Business of sewer 2018footUnited connection for the inspection States 4 File a Service Advisory Request (SAR) and receive the maximum ow 10 days USD 210 requirements report Agency : Los Angeles Department of Water and Power A Service Advisory Request (SAR) must be led with the Los Angeles Department of Power and Water. Information required: • Address of proposed service installation or legal description of property • Proposed service location (distance from property line or distance to centerline of nearest cross street) • Flow requirements (gallons per minute [gpm]) or size, and type of service desired ( re, domestic, irrigation) A customized hydraulic analysis of existing LADWP facilities serving your location is made. The analysis is based on your service location and your maximum ow requirements. The time required to analyze and process your SAR report generally ranges from a few days to two weeks depending on the volume of requests and the complexity of the analysis. At this time, the average turnaround time is approximately 10 days. The SAR report will be mailed and/or faxed to you at your request. A copy of the completed report is sent to the DBS so that you may obtain your re sprinkler permit. 5 Receive re sprinkler plan check and permit 1 day USD 1,381 Agency : Department of Building and Safety (LADBS) The cost details include the following: - For the sprinkler plan check, a total of $620.30 including: • Plan check fee: $382.90 but if expedited this amounts to $574.35 (50% additional fee for expedited services) • One stop surcharge: $11.49 • System development surcharge: $34.46 - For the sprinkler permit, a total of $760.32 including: • Expedited permit: 180 sprinkler heads (about 90 per oor) ($547.00) and 2 standpipe ush risers (1 per oor) ($134.00) • Permit issuance fee: $23 • One stop surcharge: $14.08 • System development surcharge: $42.24 6 Request and receive foundation inspection 1 day no charge Agency : Department of Building and Safety (LADBS) This inspection occurs when the excavation for footings is complete and footing forms and required reinforcing steel are in place, but before any concrete is placed. The request can be made online. The cost of inspection is included in the cost of the permit. 7 Request and receive inspection of wood framing 1 day no charge Agency : Department of Building and Safety (LADBS) This inspection occurs when all roof, walls and oor framing, re stopping and bracing are complete and all pipes are in place, but before any of this work is covered. Page 30   The request can be made online. The cost of inspection is included in the Doing cost of the permit. Business 2018 United States 7 Request and receive inspection of wood framing 1 day no charge Agency : Department of Building and Safety (LADBS) This inspection occurs when all roof, walls and oor framing, re stopping and bracing are complete and all pipes are in place, but before any of this work is covered. The request can be made online. The cost of inspection is included in the cost of the permit. 8 Request and receive inspection of wall covering 1 day no charge Agency : Department of Building and Safety (LADBS) This inspection takes place when the backing and lath or drywall are in place ready for plaster, stucco or taping. The request can be made online. The cost of inspection is included in the cost of the permit. 9 Request and receive inspection of reinforced concrete 1 day no charge Agency : Department of Building and Safety (LADBS) This inspection takes place when forms and reinforcing steel are in place ready for concrete. The request can be made online. The cost of inspection is included in the cost of the permit. 10 Request and receive inspection of reinforced masonry 1 day no charge Agency : Department of Building and Safety (LADBS) This inspection takes place in grouted masonry when vertical reinforcing steel is in place and other reinforcing steel distributed and ready for placing, but before any units are laid up. The request can be made online. The cost of inspection is included in the cost of the permit. 11 Request and receive inspection of structural steel 1 day no charge Agency : Department of Building and Safety (LADBS) This inspection takes place when structural steel members are in place and required connections are complete, but before concealing any members or connection. The request can be made online. The cost of inspection is included in the cost of the permit. 12 Request and receive nal interior plumbing inspection 1 day no charge Agency : Department of Building and Safety (LADBS) The plumbing inspection must be completed before water may be turned on. This inspection would include inspection of the installed sub-meter. The request can be made online. The cost of the plumbing inspection is included in the cost of the plumbing permit. Note: There may also be one or two rough inspections of the installation of the plumbing during the construction, but the main control check takes place during the nal inspection Page 31   The request can be made online. The cost of inspection is included in the Doing cost of the permit. Business 2018 United States 12 Request and receive nal interior plumbing inspection 1 day no charge Agency : Department of Building and Safety (LADBS) The plumbing inspection must be completed before water may be turned on. This inspection would include inspection of the installed sub-meter. The request can be made online. The cost of the plumbing inspection is included in the cost of the plumbing permit. Note: There may also be one or two rough inspections of the installation of the plumbing during the construction, but the main control check takes place during the nal inspection 13 Request and receive water connection 42 days USD 3,584 Agency : Los Angeles Department of Water and Power The sub-meter purchased from the LADWP can be installed by a licensed plumber. After installation, LADWP will turn on the meter for usage. Request and receive nal sewer inspection 1 day no charge 14 Agency : Bureau of Contract Administration The sewer connection is made by a bonded plumber, which BuildCo is assumed to have on sta . Upon completion of the sewer connection work, the inspector will perform a nal inspection. If the work is done correctly, the inspector will sign o on the permit, and a copy of the permit with the inspector's signature will be sent electronically to the Bureau of Engineering. If the work is part of a Department of Building and Safety (DBS) permit and all other conditions are cleared, the Department of Public Works will agree to the issuance of a Certi cate of Occupancy by LADBS. The cost of the nal inspection is included in the cost of the sewer permit. 15 Request and receive nal re sprinkler inspection 1 day no charge Agency : Los Angeles Fire Department (LAFD) This inspection takes place to ensure full functionality of re sprinklers after everything is completed. The request can be made online. The cost of the re inspection is included in the cost of the re sprinkler permit. 16 Request and receive nal building inspection 1 day no charge Agency : Department of Building and Safety (LADBS) This inspection takes place when the construction or work is completed and the structure ready for occupancy, but before being occupied. The request can be made online. The cost of inspection is included in the cost of the building permit. 17 Receive certi cate of occupancy 1 day no charge Agency : Department of Building and Safety (LADBS) After the receipt and approval of the nal inspection report from each of the divisions of the Department of Building and Safety, and after the city engineer has reported that all required public improvements have been completed, the Superintendent of Building shall issue a certi cate of occupancy, without charge, to the owner of the building. Page 32   The request can be made online. The cost of inspection is included in the Doing cost 2018 permit. of the building Business United States 17 Receive certi cate of occupancy 1 day no charge Agency : Department of Building and Safety (LADBS) After the receipt and approval of the nal inspection report from each of the divisions of the Department of Building and Safety, and after the city engineer has reported that all required public improvements have been completed, the Superintendent of Building shall issue a certi cate of occupancy, without charge, to the owner of the building. In practice this takes 1-2 days. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Los Angeles – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in Page 33   practice. Takes place simultaneously with previous procedure. Doing Business 2018 United States Details – Dealing with Construction Permits in Los Angeles – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Page 34   Liability Insurance or Decennial Insurance)? (0-1) to obtain Construction Doing Business 2018 United States company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certi cation exam. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Passing a certi cation exam. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Page 35   Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square certi cation exam. Doing Business 2018 United States Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 36   Getting Electricity - New York City frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 United States Getting Electricity - New York City Standardized Connection Price of electricity (US cents per kWh) 26.6 Name of utility Con Edison City Covered New York City OECD high OECD high Indicator New York City income income Overall Best Performer Procedures (number) 4 4.7 4.7 2 (United Arab Emirates) Time (days) 60 79.1 79.1 10 (United Arab Emirates) Cost (% of income per capita) 13.6 63.0 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 8 7.4 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 98.79: Germany (Rank: 5) 93.29: United Kingdom (Rank: 9) 91.23: New York City 66.89: Canada (Rank: 105) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in New York City – Procedure, Time and Cost Time Cost 60 14 12 50 (% of income per capita) 10 40 Time (days) 8 30 6 Page 37   20 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 United States Figure – Getting Electricity in New York City – Procedure, Time and Cost Time Cost 60 14 12 50 Cost (% of income per capita) 10 40 Time (days) 8 30 6 20 4 10 2 0 0 1 2 3 4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in New York City and comparator economies – Measure of Quality 8.2 8 8 8 8 7.8 7.6 Index score 7.4 7.4 7.2 7 7 6.8 6.6 6.4 New York City Canada Germany United Kingdom OECD high income Details – Getting Electricity in New York City – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 File contractor work request with Con Edison and receive service layout 16 calendar days USD 7,500 Agency : Con Ed Application for service may be made by mail, fax or by using Con Edison web site at www.coned.com/es/. However, written con rmation is required. The customer or their contractor should consult Con Edison regarding the characteristics of service available before plans are completed, equipment purchased or construction started on facilities to be connected to the company's distribution system. Information the customer or their contractor furnishes Con Edison with regard to the customer's proposed electrical installation, must be in writing. The company has Electrical Page 38   Contractor or Work Request Pads for your convenience. Only licensed New York City Canada Germany United Kingdom OECD high income Doing Business 2018 United States Details – Getting Electricity in New York City – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 File contractor work request with Con Edison and receive service layout 16 calendar days USD 7,500 Agency : Con Ed Application for service may be made by mail, fax or by using Con Edison web site at www.coned.com/es/. However, written con rmation is required. The customer or their contractor should consult Con Edison regarding the characteristics of service available before plans are completed, equipment purchased or construction started on facilities to be connected to the company's distribution system. Information the customer or their contractor furnishes Con Edison with regard to the customer's proposed electrical installation, must be in writing. The company has Electrical Contractor or Work Request Pads for your convenience. Only licensed electricians can conduct electrical connections. The licensing is done by the City of NY. The electrician hired by customer should be a licensed master electrician. The licensing is done by the City of New York. The service layout usually requires an inspection by Coned's sta who then give the technical conditions on the spot. After that the electrician can start the works. The electrician could have completed the works until the panels/ switchboard before Coned comes and inspects and then only do the wiring when they know from Coned where the service room is going to be. If the electrician however, wants to avoid to have to re-wire, they can rst wait for the service layout that tells them where the service room should be. The electrician is in charge of all the works until the connection point. The connection point should be on the customer's land and within a distance of 10 feet from the property line (border between public and private lands), which we assume here. The service layout usually require an inspection by Coned's sta who then give the technical conditions on the spot. After that the electrician can start the works. Now, the electrician could have completed the works until the panels/ switchboard before Coned comes and inspects and then only do the wiring when they know from Coned where the service room is going to be, etc. If they want to avoid to have to re-wire though, they can rst wait for the service layout that tells them where the service room should be. The electrician is in charge of all the works until the connection point. The connection point should be on the customer's land and within a distance of 10 feet from the property line (border between public and private lands). 2 Submit nal checklist to Con Edison, pay security deposit and request 30 calendar days USD 0 and receive external works Agency : Con Ed The security deposit will not be recorded as it is refunded to the customer in 3 months time. The security deposit amount is twice the average monthly usage. Con Edison representative performs an inspection to verify that the site is ready for service construction (property-line box or sweep is installed, area graded to within 6” of nal grade, curbs are installed, sewer & water lines installed, etc.). Electrician submits nal checklist to Coned, requests and receives the works. The works consist of laying out a cable from the connection point to the closest supply source on the LV network (usually a manhole and not necessarily all the way to the distribution transformer). The works by Coned can be carried out in parallel with the electrician's works. 3 Request and receive internal wiring inspection by NYC Department of 7 calendar days USD 380 Buildings Page 39   manhole and not necessarily all the way to the distribution transformer). The Doing works by Coned Business 2018can be carried United out in parallel with the electrician's works. States 3 Request and receive internal wiring inspection by NYC Department of 7 calendar days USD 380 Buildings Agency : NY Dept. of Buildings The NY Building Dept Electric division inspector does the internal and external wiring inspection once all wiring and connections are nal. This step is usually carried out after electricity has been turned on, and is not a requirement to obtain supply. It is required however in order to obtain an occupancy permit. If the inspector nds that everything is ok, he submits his report to the clerk in the NY Buildings o ce, who les it, and then publishes the Certi cate of Completion online on the NY Buildings Website. This is usually done on the same day or next business day after inspection. The actual application for Certi cate of Internal Inspection is done by the electrician before internal wiring commences. The Dept of Buildings then issues a Control Number to the electrician. 4 Request meter installation and electricity turn-on from Con Edison 7 calendar days USD 0 Agency : Con Ed The electrician contacts the utility to inform them that the certi cate of completion has been obtained, gives them the Dept of Buildings Control Number, and requests the utility to turn electricity on. Takes place simultaneously with previous procedure. Details – Getting Electricity in New York City – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.3 System average interruption frequency index (SAIFI) 0.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Page 40   Are e ective tari s available online? Yes Takes place simultaneously with previous procedure. Doing Business 2018 United States Details – Getting Electricity in New York City – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.3 System average interruption frequency index (SAIFI) 0.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online https://www.coned.c om/en/rates- tari s/rates Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Getting Electricity - Los Angeles Standardized Connection Price of electricity (US cents per kWh) 17.1 Name of utility Los Angeles Department of Water and Power City Covered Los Angeles Page 41   If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 United States Getting Electricity - Los Angeles Standardized Connection Price of electricity (US cents per kWh) 17.1 Name of utility Los Angeles Department of Water and Power City Covered Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Procedures (number) 6 4.7 4.7 2 (United Arab Emirates) Time (days) 134 79.1 79.1 10 (United Arab Emirates) Cost (% of income per capita) 38.9 63.0 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 6 7.4 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 98.79: Germany (Rank: 5) 93.29: United Kingdom (Rank: 9) 68.52: Los Angeles 66.89: Canada (Rank: 105) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Los Angeles – Procedure, Time and Cost Time Cost 40 120 35 (% of income per capita) 100 30 25 Time (days) 80 20 60 Page 42   15 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 United States Figure – Getting Electricity in Los Angeles – Procedure, Time and Cost Time Cost 40 120 35 Cost (% of income per capita) 100 30 25 Time (days) 80 20 60 15 40 10 20 5 0 0 1 2 3 *4 *5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Los Angeles and comparator economies – Measure of Quality 9 8 8 8 7.4 7 7 6 6 Index score 5 4 3 2 1 0 Los Angeles Canada Germany United Kingdom OECD high income Details – Getting Electricity in Los Angeles – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application materials and await commitment letter 70 calendar days USD 0 Agency : Los Angeles Department of Water and Power At the time of initial contact with the utility o ce, customer provides the following items: a. A completed Service Planning Information sheet b. Electrical plans including load schedules, single-line diagrams, and equipment elevation drawings. c. Plot, grading, elevation, and site improvement plans. d. Any additional information requested by the service planner needed to assist the Department in nalizing the customer’s plans. Page 43   2 Receive commitment letter and request and receive external site 1 calendar day USD 0 Los Angeles Canada Germany United Kingdom OECD high income Doing Business 2018 United States Details – Getting Electricity in Los Angeles – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application materials and await commitment letter 70 calendar days USD 0 Agency : Los Angeles Department of Water and Power At the time of initial contact with the utility o ce, customer provides the following items: a. A completed Service Planning Information sheet b. Electrical plans including load schedules, single-line diagrams, and equipment elevation drawings. c. Plot, grading, elevation, and site improvement plans. d. Any additional information requested by the service planner needed to assist the Department in nalizing the customer’s plans. 2 Receive commitment letter and request and receive external site 1 calendar day USD 0 inspection Agency : Los Angeles Department of Water and Power Once the utility has reviewed the project, they provide a commitment letter. After receiving the commitment letter, the customer contacts the utility's Electric Service Representative to schedule a site inspection. . The utility engineer visits the warehouse to locate the site of the transformer and connection 3 Await completion of external works by utility 56 calendar days USD 2,500 Agency : Los Angeles Department of Water and Power The utility furnishes the customer with a commitment letter, along with estimated cost. The cost of transformer itself is borne by the utility. The customer is charged for certain administrative fees and taxes. The connection works project could be sent out for bid by the utility depending on the utility's work load. With regards to transformer installation at customer premises, the utility furnishes and installs: (a) All electrical equipment at, or in, the installation except for equipment which is provided by the customer as speci ed in the utility's customer requirement drawings. (b) Conductors supplying the primary side of the utility-owned transformers and secondary distribution conductors to supply points. (c) Service supply conductors from the utility-owned transformer, or supply point, to the point of service. (5) The customer shall furnish and install all facilities speci ed by the utility on the Customer requirement drawings, including: (a) Cable bus structures from the terminating room or enclosure to the service terminating enclosure when required or approved for use by the customer station design engineer. The Department will furnish and supply the conductors. (b) Busway service (bus duct) from the transformer room or enclosure to the point of service when approved for use by the customer station design engineer. The bus duct will be owned and maintained by the customer at the customer's cost. 4 Submit internal wiring plan to obtain electrical permit and internal 21 calendar days USD 97.2 wiring inspection Agency : Los Angeles Department of Building and Safety The customer's electrical contractor applies for a electrical permit with the Page 44   engineer. The bus duct will be owned and maintained by the customer at the Business cost. Doing customer's 2018 United States 4 Submit internal wiring plan to obtain electrical permit and internal 21 calendar days USD 97.2 wiring inspection Agency : Los Angeles Department of Building and Safety The customer's electrical contractor applies for a electrical permit with the Los Angeles Department of Building & Safety. This permit can be applied for online. The contractor needs to specify the type of work, and pay the necessary fees online. Once the contractor has received the permit number online, he can request for an inspection (this request can be done online or by phone). The proposed date of the inspection is then informed to the contractor. 5 Hire private contractor to undertake civil works 14 calendar days USD 20,000 Agency : Customer's contractor Customer's contractor undertakes underground wiring, excavation, conduits, construction of concrete slab. 6 Submit application for energizing connection and receive meter 7 calendar days USD 0 installation and electricity ow Agency : Los Angeles Department of Water and Power Customer's contractor applies online for "turn on" of electricity, providing details of connection and proof of electrical permit approval by Los Angeles Department of Building and Safety. Contractor calls the utility for scheduling of inspection of power release. Takes place simultaneously with previous procedure. Details – Getting Electricity in Los Angeles – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 2.1 System average interruption frequency index (SAIFI) 0.9 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 0 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on No reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes Page 45   exceed a certain cap? Takes place simultaneously with previous procedure. Doing Business 2018 United States Details – Getting Electricity in Los Angeles – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 2.1 System average interruption frequency index (SAIFI) 0.9 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 0 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on No reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online https://www.ladwp.c om/ladwp/faces/wcn av_externalId/a-fr- elecrate-schel? _adf.ctrl- state=ky4hi9d9n_4& _afrLoop=555001444 222369 Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the Page 46   quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 United States Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Registering Property - New York City Standard Property Transfer Property value USD 2,901,253.90 Page 47   Doing Business 2018 United States Registering Property - New York City Standard Property Transfer Property value USD 2,901,253.90 City Covered New York City OECD high OECD high Indicator New York City income income Overall Best Performer Procedures (number) 4 4.6 4.6 1.00 (4 Economies) Time (days) 12 22.3 22.3 1.00 (3 Economies) Cost (% of property value) 3.5 4.2 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 18.0 22.7 22.7 29.00 (Singapore) Figure – Registering Property in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 79.31: Canada (Rank: 33) 76.64: New York City 74.51: United Kingdom (Rank: 47) 65.71: Germany (Rank: 77) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in New York City – Procedure, Time and Cost Time Cost 12 3.5 3 10 Cost (% of property value) 2.5 8 Time (days) 2 6 1.5 4 1 2 0.5 0 0 1 *2 3 4 Procedures (number) Page 48   registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 United States Figure – Registering Property in New York City – Procedure, Time and Cost Time Cost 12 3.5 3 10 Cost (% of property value) 2.5 8 Time (days) 2 6 1.5 4 1 2 0.5 0 0 1 *2 3 4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in New York City and comparator economies – Measure of Quality 30 24.5 25 22.0 22.7 21.5 20 18.0 Index score 15 10 5 0 New York City Canada Germany United Kingdom OECD high income Details – Registering Property in New York City – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a title report 10 days 9,500 (title report Agency : Private Company (simultaneous with and title insurance) Procedure 2) A title report is obtained from one of many competing private companies, regulated by the state. Fees for title insurance are set by state regulators. Fees for services vary. A title report is not technically mandatory, but is routinely used to analyze the quality of title. A title report is an essential prerequisite to securing title insurance. No title company would o er title insurance without a title report tracing the deed history and clearly articulating the liens, covenants and other limitations on title. A title report and title insurance are typically required by lenders. Most buyers purchase a title insurance to assure the title is clear (i.e. no defects in the title). One Page 49   application for title report and title insurance is enough. Thus, no additional New York City Canada Germany United Kingdom OECD high income Doing Business 2018 United States Details – Registering Property in New York City – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a title report 10 days 9,500 (title report Agency : Private Company (simultaneous with and title insurance) Procedure 2) A title report is obtained from one of many competing private companies, regulated by the state. Fees for title insurance are set by state regulators. Fees for services vary. A title report is not technically mandatory, but is routinely used to analyze the quality of title. A title report is an essential prerequisite to securing title insurance. No title company would o er title insurance without a title report tracing the deed history and clearly articulating the liens, covenants and other limitations on title. A title report and title insurance are typically required by lenders. Most buyers purchase a title insurance to assure the title is clear (i.e. no defects in the title). One application for title report and title insurance is enough. Thus, no additional Procedure or time is needed. Banks usually require title insurance for a property to be accepted as a collateral for a loan. The cost of such title insurance is USD 9,500 given the assumptions of our case study, including the cost of the title report. 2 Conduct an environmental review 9 days Depends on nature Agency : Private Company (simultaneous with and extent of Procedure 1) contamination, if any (According to the assumptions of the case study, it is assumed that no violation nor problem is found in the rst phase of the review, and that the whole Procedure does not take more than the 10 days that it takes to obtain the title report in Procedure 1) The environmental review is typically conducted by a private rm specializing in the eld. It is not technically mandatory, but a prudent investor will routinely require an environmental review and no bank would ever advance a commercial mortgage without conducting an environmental review. The environmental review may have up to 3 phases: 1. The history of the property in the public records is analyzed to check if there was any record of contamination or any violation. 2. If yes, an inspection of the property takes place, where some samples are taken 3. Clean-up phase if needed. 3 The buyer obtains and lls the forms needed for the transfer 1 day Filing fee for state Agency : O ce of the City Register form RP-5217 is $250 + Filing fee for state All NYC transfers should be done using ACRIS system. It generates all of the form TP-584 is $5 + required transfer tax forms, i.e. NYS Transfer Tax Form TP-584 regarding real 2.625% of property estate transfer tax, and the NYS Real Property Transfer Report (Equalization) value greater than Form RP-5217, as well as necessary documents as smoke detector's a davit, $500 000 (NYC customer registration, etc. The state forms RP-5217 and TP-584 are available in many local government o ces and on the Internet. Additionally, the transfer tax) + property disclosure form is typically drafted by the attorney for the seller $2.00/500 of and given to the buyer prior to or at closing. The title deed is usually property value (NYS prepared by the seller. The fees for state forms RP-5217 and TP-584 are transfer tax) typically collected by the title company at closing, prior to recording, and must be paid to the state upon ling the deed for recording with the registry. It is common practice to obtain title insurance from one of the competing title insurance companies. (The cost of title insurance will cost $9,500). The title insurance can only be acquired at closing, after the transaction has been completed between buyer and seller and the price has been paid. Where nancing is involved, the lender typically requires the purchaser to Page 50   obtain insurance as a condition of the loan. There is a separate mortgage contamination or any violation. 2. If yes, an inspection of the property takes Doing place, some samples where2018 Business United are taken 3. Clean-up phase if needed. States 3 The buyer obtains and lls the forms needed for the transfer 1 day Filing fee for state Agency : O ce of the City Register form RP-5217 is $250 + Filing fee for state All NYC transfers should be done using ACRIS system. It generates all of the form TP-584 is $5 + required transfer tax forms, i.e. NYS Transfer Tax Form TP-584 regarding real 2.625% of property estate transfer tax, and the NYS Real Property Transfer Report (Equalization) value greater than Form RP-5217, as well as necessary documents as smoke detector's a davit, $500 000 (NYC customer registration, etc. The state forms RP-5217 and TP-584 are available in many local government o ces and on the Internet. Additionally, the transfer tax) + property disclosure form is typically drafted by the attorney for the seller $2.00/500 of and given to the buyer prior to or at closing. The title deed is usually property value (NYS prepared by the seller. The fees for state forms RP-5217 and TP-584 are transfer tax) typically collected by the title company at closing, prior to recording, and must be paid to the state upon ling the deed for recording with the registry. It is common practice to obtain title insurance from one of the competing title insurance companies. (The cost of title insurance will cost $9,500). The title insurance can only be acquired at closing, after the transaction has been completed between buyer and seller and the price has been paid. Where nancing is involved, the lender typically requires the purchaser to obtain insurance as a condition of the loan. There is a separate mortgage recording tax required to be paid, in addition to the real property transfer tax. Real property transfer tax is paid by the seller at rates 0.4% for NYS transfer tax and 2.625% for NYC transfer tax (of property value exceeding $500,000). The title insurance company will take the responsibility of recording the title at the county clerk. 4 The title is recorded with the County Clerk 1 day $32 + $5 cover page Agency : County Clerk + $5 per page (assuming that the The transfer deed (together with the applicable tax forms and payment) is title consists of then presented to the applicable public o cial, e.g. county clerk, for about 12 pages) recordation in the public records of the jurisdiction. The date of acceptance of the deed by the clerk is the date which controls for transfer purposes. Nonetheless, it often can take many weeks (and even months) for the actual recordation to take place and become available on the public record. However, the transaction is valid and opposable to third parties on the date it is submitted. Although the law states that title passes upon delivery of the deed, where there are competing claims the law recognizes the 1st recorded deed. The title insurance company usually takes the responsibility of recording the title at the County Clerk, paying the fees for state forms RP-5217 and TP-584 . The documentation shall include: Title deed NYS Real Property form TP-584 on real estate transfer tax Property Disclosure Form Real Property form RP-5217 Title Insurance Takes place simultaneously with previous procedure. Details – Registering Property in New York City – Measure of Quality Answer Score Quality of the land administration index (0-30) 18.0 Reliability of infrastructure index (0-8) 7.0 Page 51   Takes place simultaneously with previous procedure. Doing Business 2018 United States Details – Registering Property in New York City – Measure of Quality Answer Score Quality of the land administration index (0-30) 18.0 Reliability of infrastructure index (0-8) 7.0 What is the institution in charge of immovable property registration? O ce of the City Register In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: NY Digital Tax Map In what format are the majority of maps of land plots kept in the largest business city— Computer/Fully 2.0 in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 3.0 Who is able to obtain information on land ownership at the agency in charge of Freely accessible 1.0 immovable property registration in the largest business city? by anyone Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://a836- acris.nyc.gov/CP/ Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: https://a836- acris.nyc.gov/CP/ CoverPage/Calcu lateTaxes Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 Page 52   legally binding document that proves property ownership within a speci c time frame– and if Doing so, how does Business 2018it communicate the service standard? United States Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Freely accessible 0.5 by anyone Is the applicable fee schedule for accessing maps of land plots made publicly available No cost 0.5 —and if so, how? Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 4.0 Does the law require that all property sale transactions be registered at the immovable No 0.0 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Lawyer. Page 53   property transaction (e.g., checking the compliance of contracts with requirements of the law)? Doing Business 2018 United States If yes, who is responsible for checking the legality of the documents? Registrar; Lawyer. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a NYS Supreme property worth 50 times gross national income (GNI) per capita and located in the Court largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Between 1 and 2 2.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Registering Property - Los Angeles Standard Property Transfer Property value USD 2,901,253.90 City Covered Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Procedures (number) 5 4.6 4.6 1.00 (4 Economies) Time (days) 20 22.3 22.3 1.00 (3 Economies) Cost (% of property value) 0.9 4.2 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 17.0 22.7 22.7 29.00 (Singapore) Figure – Registering Property in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 79.31: Canada (Rank: 33) 77.03: Los Angeles 74.51: United Kingdom (Rank: 47) Page 54   65.71: Germany (Rank: 77) Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 United States Registering Property - Los Angeles Standard Property Transfer Property value USD 2,901,253.90 City Covered Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Procedures (number) 5 4.6 4.6 1.00 (4 Economies) Time (days) 20 22.3 22.3 1.00 (3 Economies) Cost (% of property value) 0.9 4.2 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 17.0 22.7 22.7 29.00 (Singapore) Figure – Registering Property in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 79.31: Canada (Rank: 33) 77.03: Los Angeles 74.51: United Kingdom (Rank: 47) 65.71: Germany (Rank: 77) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Los Angeles – Procedure, Time and Cost Time Cost 20 0.6 0.5 Cost (% of property value) 15 0.4 Time (days) 10 0.3 0.2 5 0.1 0 0 Page 55   1 2 3 4 5 registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 United States Figure – Registering Property in Los Angeles – Procedure, Time and Cost Time Cost 20 0.6 0.5 Cost (% of property value) 15 0.4 Time (days) 10 0.3 0.2 5 0.1 0 0 1 2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Los Angeles and comparator economies – Measure of Quality 30 24.5 25 22.0 22.7 21.5 20 Index score 17.0 15 10 5 0 Los Angeles Canada Germany United Kingdom OECD high income Details – Registering Property in Los Angeles – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a title report About 3 days Included in Agency : Private company procedure 2 The preliminary title report is to investigate any outstanding issues on the property such as easements or dues to utility companies, existing mortgages on the property, and CC&Rs (Covenants, Conditions and Restrictions which are rules and restrictions placed on the property by the owners association, etc.) 2 Obtain Title Insurance policy (Environmental requirement and 2 weeks USD 10,003 (Title inspections) Insurance, Escrow, Agency : Private company Environmental Page 56   report, Natural Los Angeles Canada Germany United Kingdom OECD high income Doing Business 2018 United States Details – Registering Property in Los Angeles – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a title report About 3 days Included in Agency : Private company procedure 2 The preliminary title report is to investigate any outstanding issues on the property such as easements or dues to utility companies, existing mortgages on the property, and CC&Rs (Covenants, Conditions and Restrictions which are rules and restrictions placed on the property by the owners association, etc.) 2 Obtain Title Insurance policy (Environmental requirement and 2 weeks USD 10,003 (Title inspections) Insurance, Escrow, Agency : Private company Environmental report, Natural Parties sign an escrow agreement. The agreement would usually allow for a Hazards Disclosure period of 30 days for due diligence checks and is subject to certain report) contingencies (i.e. the property meeting the contingency requirements to move forward with the sale). At the end of this period, the buyer's deposit will no longer be refundable. During this period, a variety of inspections take place. The checks may be completed before this period ends, but cannot exceed this period. In the due-diligence phase, the two following requirements have to be undertaken: - Phase I Environmental inspection. This is a visual inspection to check if there are any hazardous materials such as oil stains or chemicals on the property or if it is located near or formerly used as a gas station or dry cleaners for instance. - Natural Hazards Disclosure Statement (usually ordered online by the escrow company and provided to the Buyer; it is public data. This Report is required by law as of 1998 for all real estate transactions in California: Assembly Bill 1195 now knows as California Civil Code 1103. It mandates 3 natural hazard disclosures into one statutory form: Seismic, re and oods, given that California is especially sensitive to seismic movements and earthquakes. More information can be found here: http://archive.calbar.ca.gov/calbar/2cbj/99aug/mclestdy.htm) 3 Sign and Notarize Deed with a Notary Public 1 day USD 20 Agency : Notary 4 The buyer obtains and lls the forms needed for the transfer 1 day USD 4.5 per 1,000 Agency : Los Angeles County Treasurer and tax collector (Los Angeles City) and USD 1.1 per Documentary Transfer Tax Los Angeles City charges $4.5 per 1,000 and Los 1,000 (Los Angeles Angeles County (according to LA City Ordinance) charges $1.10 per 1,000 (or County) 0.55 cents per $500, rounding up to the highest $500 according to the California Revenue and Taxation Code) 5 The title is recorded with the County Clerk 1 day USD 23 Agency : County clerk's o ce To record the deed, the following documents must be led: - Notarized Deed - Preliminary Change of Ownership Form (If this is not led, a USD 20 fee is added per Revenue and Taxation Code 480.3) - Declaration of Documentary Transfer Tax These forms can be obtained from the website of the RRCC: http://www.lavote.net/recorder/Document_Recording.cfm The recording fees are: - Base Fee, $10.00 (Cal. Govt. Code § 27361(a)); - First Page, $1.00 (Cal. Govt. Code §27361.4(a), (b), and (c); - Each additional page, $3.00; - Page 57   Electronic recording fee, $1.00 (Cal. Govt. Code § 27397(c)(1)).   - Special Real County) 0.55 cents per $500, rounding up to the highest $500 according to the Doing California Business 2018 and Revenue Taxation United Code) States 5 The title is recorded with the County Clerk 1 day USD 23 Agency : County clerk's o ce To record the deed, the following documents must be led: - Notarized Deed - Preliminary Change of Ownership Form (If this is not led, a USD 20 fee is added per Revenue and Taxation Code 480.3) - Declaration of Documentary Transfer Tax These forms can be obtained from the website of the RRCC: http://www.lavote.net/recorder/Document_Recording.cfm The recording fees are: - Base Fee, $10.00 (Cal. Govt. Code § 27361(a)); - First Page, $1.00 (Cal. Govt. Code §27361.4(a), (b), and (c); - Each additional page, $3.00; - Electronic recording fee, $1.00 (Cal. Govt. Code § 27397(c)(1)).   - Special Real Estate Fraud Prosecution Program Fee, $4.00; - Social Security Number Truncation Program, $1.00 (AB 1168, § 627) Takes place simultaneously with previous procedure. Details – Registering Property in Los Angeles – Measure of Quality Answer Score Quality of the land administration index (0-30) 17.0 Reliability of infrastructure index (0-8) 7.0 What is the institution in charge of immovable property registration? Los Angeles County Recorder O ce In what format are the majority of title or deed records kept in the largest business city Computer/Fully 2.0 —in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: County Recorder In what format are the majority of maps of land plots kept in the largest business city— Computer/Fully 2.0 in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 3.5 Who is able to obtain information on land ownership at the agency in charge of Freely accessible 1.0 immovable property registration in the largest business city? by anyone Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://www.lavot e.net/home/reco Page 58   Takes place simultaneously with previous procedure. Doing Business 2018 United States Details – Registering Property in Los Angeles – Measure of Quality Answer Score Quality of the land administration index (0-30) 17.0 Reliability of infrastructure index (0-8) 7.0 What is the institution in charge of immovable property registration? Los Angeles County Recorder O ce In what format are the majority of title or deed records kept in the largest business city Computer/Fully 2.0 —in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: County Recorder In what format are the majority of maps of land plots kept in the largest business city— Computer/Fully 2.0 in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 3.5 Who is able to obtain information on land ownership at the agency in charge of Freely accessible 1.0 immovable property registration in the largest business city? by anyone Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://www.lavot e.net/home/reco rds/real-estate- records/general- info Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: https://www.lavo te.net/home/rec ords/property- document- recording/fees  Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Page 59   document- Doing Business 2018 United States recording/fees  Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Freely accessible 0.5 by anyone Is the applicable fee schedule for accessing maps of land plots made publicly available No cost 0.5 —and if so, how? Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that Yes 0.5 occurred at the cadastral or mapping agency? Contact information: http://www.bpels g.ca.gov/consum ers/complaint_lic ensee.shtml Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 2.5 Does the law require that all property sale transactions be registered at the immovable No 0.0 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Page 60   Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Doing Business 2018 United States Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Lawyer; Interested Parties. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Notary. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a Los Angeles property worth 50 times gross national income (GNI) per capita and located in the Superior Court largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Between 2 and 3 1.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Page 61   registration of security interests is possible). The case scenarios involve a Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 United States Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Getting Credit - New York City OECD high OECD high Indicator New York City income income Overall Best Performer Strength of legal rights index (0-12) 11 6.0 6.0 12.00 (4 Economies) Page 62   possible). ABC keeps ownership and possession of the assets. Doing Business 2018 United States Getting Credit - New York City OECD high OECD high Indicator New York City income income Overall Best Performer Strength of legal rights index (0-12) 11 6.0 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 6.6 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 18.3 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 100.0 63.7 63.7 100.00 (23 Economies) Figure – Getting Credit in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 95.00: New York City 85.00: Canada (Rank: 12) 75.00: United Kingdom (Rank: 29) 70.00: Germany (Rank: 42) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in New York City and comparator economies 12 11 10 9 8 Index score 7 6 6.0 6 4 2 0 New York City Canada Germany United Kingdom OECD high income Details – Legal Rights in New York City Strength of legal rights index (0-12) 11 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Page 63   New York City Canada Germany United Kingdom OECD high income Doing Business 2018 United States Details – Legal Rights in New York City Strength of legal rights index (0-12) 11 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically No and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be Yes performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised Yes reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in New York City and comparator economies 10 8 8 8 8 8 6.6 Index score 6 4 2 0 New York City Canada Germany United Kingdom OECD high income Details – Credit Information in New York City Page 64   0 York City United States New 2018 Doing Business Canada Germany United Kingdom OECD high income Details – Credit Information in New York City Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes No 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 8 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 220,000,000 0 Number of firms 25,270,000 0 Total 245,270,000 0 Percentage of adult population 100.0 0.0 Getting Credit - Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Strength of legal rights index (0-12) 11 6.0 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 6.6 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 18.3 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 100.0 63.7 63.7 100.00 (23 Economies) Figure – Getting Credit in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) Page 65   Percentage of adult population 100.0 0.0 Doing Business 2018 United States Getting Credit - Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Strength of legal rights index (0-12) 11 6.0 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 6.6 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 18.3 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 100.0 63.7 63.7 100.00 (23 Economies) Figure – Getting Credit in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 95.00: Los Angeles 85.00: Canada (Rank: 12) 75.00: United Kingdom (Rank: 29) 70.00: Germany (Rank: 42) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Los Angeles and comparator economies 12 11 10 9 8 Index score 7 6 6.0 6 4 2 0 Los Angeles Canada Germany United Kingdom OECD high income Details – Legal Rights in Los Angeles Strength of legal rights index (0-12) 11 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes Page 66   enforcement of functional equivalents to security interests in movable assets exist in the economy? Los Angeles Canada Germany United Kingdom OECD high income Doing Business 2018 United States Details – Legal Rights in Los Angeles Strength of legal rights index (0-12) 11 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically No and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be Yes performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised Yes reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Los Angeles and comparator economies 10 8 8 8 8 8 6.6 Index score 6 4 2 0 Los Angeles Canada Germany United Kingdom OECD high income Details – Credit Information in Los Angeles Page 67   0 Angeles Los 2018 Doing Business Canada United States Germany United Kingdom OECD high income Details – Credit Information in Los Angeles Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes No 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 8 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 220,000,000 0 Number of firms 25,270,000 0 Total 245,270,000 0 Percentage of adult population 100.0 0.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 68   transactions; Available legal remedies (damages, Percentage of adult population 100.0 0.0 Doing Business 2018 United States Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Protecting Minority Investors - New York City OECD high OECD high Indicator New York City income income Overall Best Performer Extent of conflict of interest regulation index (0- 8.3 6.4 6.4 9.3 (New Zealand) Page 69   10) and the other parties that approved the transaction. Doing Business 2018 United States Protecting Minority Investors - New York City OECD high OECD high Indicator New York City income income Overall Best Performer Extent of conflict of interest regulation index (0- 8.3 6.4 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 4.3 6.4 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 78.33: Canada (Rank: 8) 75.00: United Kingdom (Rank: 10) 63.33: New York City 58.33: Germany (Rank: 62) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in New York City and comparator economies – Measure of Quality New York City 5 9 7 4 4 9 Canada 8 9 8 7 6 9 Germany 7 5 5 6 7 5 United Kingdom 8 7 10 5 7 8 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in New York City – Measure of Quality Page 70   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 United States Details – Protecting Minority Investors in New York City – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 8.3 Extent of disclosure index (0-10) 7 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders or 1.0 board of directors including interested parties Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 2.0 2) the transaction and on the con ict of interest Extent of director liability index (0-10) 9 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if unfair or 2.0 caused to Buyer? (0-2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused Liable if unfair or 2.0 to Buyer (0-2) prejudicial Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if unfair 2.0 or prejudicial Ease of shareholder suits index (0-10) 9 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Page 71   shareholder Ease ofBusiness Doing suits index 2018 (0-10) United States 9 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without Yes 1.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 4.3 Extent of shareholder rights index (0-10) 4 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of No 0.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? No 0.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 4 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 Page 72   of Buyer? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board Doing members? Business 2018 United States Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 5 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general No 0.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? No 0.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Protecting Minority Investors - Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Extent of conflict of interest regulation index (0- 8.3 6.4 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 5 6.4 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) Page 73   0 100 Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Doing Business 2018 United States Protecting Minority Investors - Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Extent of conflict of interest regulation index (0- 8.3 6.4 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 5 6.4 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 78.33: Canada (Rank: 8) 75.00: United Kingdom (Rank: 10) 66.67: Los Angeles 58.33: Germany (Rank: 62) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Los Angeles and comparator economies – Measure of Quality Los Angeles 6 8 8 5 4 9 Canada 8 9 8 7 6 9 Germany 7 5 5 6 7 5 United Kingdom 8 7 10 5 7 8 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Page 74   con ict of interest regulation index and the extent of shareholder governance index. Doing Business 2018 United States Figure – Protecting Minority Investors in Los Angeles and comparator economies – Measure of Quality Los Angeles 6 8 8 5 4 9 Canada 8 9 8 7 6 9 Germany 7 5 5 6 7 5 United Kingdom 8 7 10 5 7 8 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Los Angeles – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 8.3 Extent of disclosure index (0-10) 8 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 2.0 2) the transaction and on the con ict of interest Extent of director liability index (0-10) 8 Page 75   Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 United States Details – Protecting Minority Investors in Los Angeles – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 8.3 Extent of disclosure index (0-10) 8 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 2.0 2) the transaction and on the con ict of interest Extent of director liability index (0-10) 8 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if unfair or 2.0 to Buyer (0-2) prejudicial Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if unfair 2.0 or prejudicial Ease of shareholder suits index (0-10) 9 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 Page 76   shareholder Ease ofBusiness Doing suits index 2018 (0-10) United States 9 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without Yes 1.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 5 Extent of shareholder rights index (0-10) 4 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? No 0.0 Are changes to the rights of a class of shares only possible if the holders of the a ected No 0.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 5 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 Page 77   of Buyer? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board Doing members? Business 2018 United States Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 6 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general No 0.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? No 0.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Page 78   Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Doing Business 2018 United States Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Paying Taxes - New York City OECD high OECD high Indicator New York City income income Overall Best Performer Page 79   Paying Taxes - New York City Doing Business 2018 United States OECD high OECD high Indicator New York City income income Overall Best Performer Payments (number per year) 11 10.9 10.9 3 (Hong Kong SAR, China) Time (hours per year) 175 160.7 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 45.8 40.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 94.04 83.45 83.45 99.38 (Estonia) Figure – Paying Taxes in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 88.05: Canada (Rank: 16) 86.70: United Kingdom (Rank: 23) 83.25: New York City 82.14: Germany (Rank: 41) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in New York City and comparator economies – Measure of Quality 120 94.04 97.67 100 83.45 80 73.23 71.00 Index score 60 40 20 0 New York City Canada Germany United Kingdom OECD high income Details – Paying Taxes in New York City Total tax and contribution Payments Notes on Time Statutory tax rate (% of Notes Tax or mandatory contribution (number) Payments (hours) rate Tax base profit) TTR onPage 80   Doing Business 2018 United States Figure – Paying Taxes in New York City and comparator economies – Measure of Quality 120 94.04 97.67 100 83.45 80 73.23 71.00 Index score 60 40 20 0 New York City Canada Germany United Kingdom OECD high income Details – Paying Taxes in New York City Total tax and contribution Payments Notes on Time Statutory tax rate (% of Notes Tax or mandatory contribution (number) Payments (hours) rate Tax base profit) on TTR Federal corporate income tax 1 87 34% taxable 17.93 (progressive income schedule) NY City and State property tax 1 10.574% per 45% of FMV 7.05 $100 valuation Employer paid - Federal old-age, 1 online 55 6.2% gross 6.99 survivors and disability insurance salaries with tax (OASDI) ceiling NYC corporation tax 0 jointly 8.85% taxable 5.47 income NYS corporation tax 1 online 6.5% taxable 3.67 income Employer paid - Hospital 0 jointly 1.45% gross 1.64 insurance contributions salaries NYC real estate transfer tax 1 2.63% sale price 1.59 Employer paid - NYS 1 online 4.1% gross 0.88 unemployment tax salaries with ceiling Employer paid - Metropolitan 1 online 0.34% gross 0.38 commuter transportation salaries mobility tax (MCTMT) Employer paid - Federal 1 online 0.6% (6% gross 0.08 unemployment tax (FUTA) FUTA - 5.4% salaries with tax credit) ceiling NY City and State sales and use 1 8.875% leasing 0.07 tax of lease truck expenses Page 81   unemployment tax (FUTA) FUTA - 5.4% salaries with Doing Business 2018 United States tax credit) ceiling NY City and State sales and use 1 8.875% leasing 0.07 tax of lease truck expenses Sales tax 1 online 33 8.875% sales 0.00 withheld Employee paid - Federal old-age, 0 online 6.2% gross 0.00 withheld survivors and disability insurance and salaries with tax (OASDI) jointly ceiling Employee paid - Hospital 0 jointly 1.45% gross 0.00 withheld insurance contributions salaries Fuel tax 1 18.4 cents + fuel 0.00 small 8 cents per consumption amount gallon Totals 11 175 45.8 Details – Paying Taxes in New York City – Tax by Type Taxes by type Answer Profit tax (% of profit) 27.1 Labor tax and contributions (% of profit) 10.0 Other taxes (% of profit) 8.7 Details – Paying Taxes in New York City – Measure of Quality Answer Score Post ling index (0-100) 94.04 VAT refunds Does VAT exist? No Does a VAT refund process exist per the case study? N/A Restrictions on VAT refund process N/A Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT No VAT Time to obtain a VAT refund (weeks) No VAT No VAT Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Page 82   Time to comply with a corporate income tax audit (hours) 8.0 88.07 corporate income DoesBusiness Doing 2018 tax exist? States United Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 8.0 88.07 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Paying Taxes - Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Payments (number per year) 10 10.9 10.9 3 (Hong Kong SAR, China) Time (hours per year) 175 160.7 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 40.9 40.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 94.04 83.45 83.45 99.38 (Estonia) Figure – Paying Taxes in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 88.05: Canada (Rank: 16) 86.70: United Kingdom (Rank: 23) 85.46: Los Angeles 82.14: Germany (Rank: 41) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Page 83   Figure – Paying Taxes in Los Angeles and comparator economies – Measure of Quality a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 United States Paying Taxes - Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Payments (number per year) 10 10.9 10.9 3 (Hong Kong SAR, China) Time (hours per year) 175 160.7 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 40.9 40.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 94.04 83.45 83.45 99.38 (Estonia) Figure – Paying Taxes in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 88.05: Canada (Rank: 16) 86.70: United Kingdom (Rank: 23) 85.46: Los Angeles 82.14: Germany (Rank: 41) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Los Angeles and comparator economies – Measure of Quality 120 94.04 97.67 100 83.45 80 73.23 71.00 Index score 60 40 20 0 Los Angeles Canada Germany United Kingdom OECD high income Details – Paying Taxes in Los Angeles Page 84   Doing Business 2018 United States Figure – Paying Taxes in Los Angeles and comparator economies – Measure of Quality 120 94.04 97.67 100 83.45 80 73.23 71.00 Index score 60 40 20 0 Los Angeles Canada Germany United Kingdom OECD high income Details – Paying Taxes in Los Angeles Total tax and contribution Payments Notes on Time Statutory tax rate (% of Notes Tax or mandatory contribution (number) Payments (hours) rate Tax base profit) on TTR Federal corporate income tax 1 online 87 34% taxable 20.27 (progressive income schedule) Federal Old-age, survivors and 1 online 55 6.2% gross 6.99 disability insurance tax (OASDI) salaries with ceiling CA State corporation tax 1 online 8.84% taxable 6.74 income Los Angeles City Business Tax 1 online 0.127% gross 2.25 ("LACBT") receipts LA & State Property Taxes 1 online 1.198% MV of land 1.77 and buildings Employer paid - Hospital 0 jointly 1.45% gross 1.64 insurance contributions salaries CA State unemployment tax 1 online 4.5% (3.4% UI gross 0.76 + 0.1% ETT + salaries with 1% SDI ) ceiling LA Real Estate Transfer Tax 1 $2.80 per sale price 0.34 $500 of consideration Federal unemployment tax 1 online 0.6% (6% gross 0.08 (FUTA) FUTA - 5.4% salaries with tax credit) ceiling CA State & City Sales and Use Tax 0 jointly 8.875% leasing 0.07 on lease of new truck expenses Sales tax 1 online 33 9% sales 0.00 withheld Page 85   Fuel tax 1 18.4 cents + 8 fuel 0.00 small CA State & City Sales and Use Tax 0 jointly 8.875% leasing 0.07 on lease Doing of new truck Business 2018 United States expenses Sales tax 1 online 33 9% sales 0.00 withheld Fuel tax 1 18.4 cents + 8 fuel 0.00 small cents per consumption amount gallon Employee paid - Federal old-age, 0 jointly 6.2% gross 0.00 withheld survivors and disability salaries with insurance tax (OASDI) ceiling Employee paid - Hospital 0 jointly 1.45% gross 0.00 withheld insurance contributions salaries Totals 10 175 40.9 Details – Paying Taxes in Los Angeles – Tax by Type Taxes by type Answer Profit tax (% of profit) 29.3 Labor tax and contributions (% of profit) 9.5 Other taxes (% of profit) 2.2 Details – Paying Taxes in Los Angeles – Measure of Quality Answer Score Post ling index (0-100) 94.04 VAT refunds Does VAT exist? No Does a VAT refund process exist per the case study? N/A Restrictions on VAT refund process N/A Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT No VAT Time to obtain a VAT refund (weeks) No VAT No VAT Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 8.0 88.07 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study Page 86   to comply with TimeBusiness Doing 2018 a corporate Statestax audit (hours) United income 8.0 88.07 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the Page 87   chosen export or import product and the trading partner, as is the a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 United States Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 88   of agriculture or industry, national security agencies and any other Doing Business 2018 United States government authorities. Trading across Borders - New York City OECD high OECD high Indicator New York City income income Overall Best Performer Time to export: Border compliance (hours) 1.5 12.7 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 175 149.9 149.9 0.00 (19 Economies) Time to export: Documentary compliance 1.5 2.4 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 60 35.4 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 1.5 8.7 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 175 111.6 111.6 0.00 (27 Economies) Time to import: Documentary compliance 7.5 3.5 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 100 25.6 25.6 0.00 (30 Economies) Figure – Trading across Borders in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.76: United Kingdom (Rank: 28) 92.01: New York City 91.77: Germany (Rank: 39) 88.36: Canada (Rank: 46) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in New York City – Time and Cost Time Cost 8 7.5 200 175 175 7 6 150 Time (hours) Cost (USD) 5 100 4 100 3 60 2 1.5 1.5 1.5 50 1 Page 89   Doing Business 2018 United States Figure – Trading across Borders in New York City – Time and Cost Time Cost 8 7.5 200 175 175 7 6 150 Time (hours) Cost (USD) 5 100 4 100 3 60 2 1.5 1.5 1.5 50 1 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in New York City Characteristics Export Import Product HS 84 : Nuclear reactors, boilers, machinery and mechanical HS 8708: Parts and accessories of appliances; parts thereof motor vehicles Trade partner Canada Mexico Border Buffalo border crossing Laredo border crossing Distance (km) 600 3192 Domestic transport 24 109 time (hours) Domestic transport 1361 4373 cost (USD) Details – Trading across Borders in New York City – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 1.3 175.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 0.5 0.0 Import: Clearance and inspections required by customs authorities 1.5 175.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 0.5 0.0 Details – Trading across Borders in New York City – Trade Documents Export Import Page 90   cost (USD) Doing Business 2018 United States Details – Trading across Borders in New York City – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 1.3 175.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 0.5 0.0 Import: Clearance and inspections required by customs authorities 1.5 175.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 0.5 0.0 Details – Trading across Borders in New York City – Trade Documents Export Import Inland bill of lading Inland bill of lading Commercial Invoice/ cargo control document NAFTA - Certificate of origin NAFTA Certificate of origin/ Canadian Customs Invoice Commercial Invoice Packing List Packing List Customs Release Form 3461 Customs Entry Form 7501 Trading across Borders - Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Time to export: Border compliance (hours) 1.5 12.7 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 175 149.9 149.9 0.00 (19 Economies) Time to export: Documentary compliance 1.5 2.4 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 60 35.4 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 1.5 8.7 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 175 111.6 111.6 0.00 (27 Economies) Time to import: Documentary compliance 7.5 3.5 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 100 25.6 25.6 0.00 (30 Economies) Page 91   Customs Entry Form 7501 Doing Business 2018 United States Trading across Borders - Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Time to export: Border compliance (hours) 1.5 12.7 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 175 149.9 149.9 0.00 (19 Economies) Time to export: Documentary compliance 1.5 2.4 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 60 35.4 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 1.5 8.7 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 175 111.6 111.6 0.00 (27 Economies) Time to import: Documentary compliance 7.5 3.5 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 100 25.6 25.6 0.00 (30 Economies) Figure – Trading across Borders in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.76: United Kingdom (Rank: 28) 92.01: Los Angeles 91.77: Germany (Rank: 39) 88.36: Canada (Rank: 46) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Los Angeles – Time and Cost Time Cost 8 7.5 200 175 175 7 6 150 Time (hours) Cost (USD) 5 100 4 100 3 60 2 1.5 1.5 1.5 50 1 Page 92   Doing Business 2018 United States Figure – Trading across Borders in Los Angeles – Time and Cost Time Cost 8 7.5 200 175 175 7 6 150 Time (hours) Cost (USD) 5 100 4 100 3 60 2 1.5 1.5 1.5 50 1 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Los Angeles Characteristics Export Import Product HS 84 : Nuclear reactors, boilers, machinery and mechanical HS 8708: Parts and accessories of appliances; parts thereof motor vehicles Trade partner Canada Mexico Border Detroit border crossing El Paso border crossing Distance (km) 3670 1295 Domestic transport 85 31 time (hours) Domestic transport 6017 1931 cost (USD) Details – Trading across Borders in Los Angeles – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 1.3 175.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 0.5 0.0 Import: Clearance and inspections required by customs authorities 1.5 175.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 0.5 0.0 Details – Trading across Borders in Los Angeles – Trade Documents Export Import Page 93   cost (USD) Doing Business 2018 United States Details – Trading across Borders in Los Angeles – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 1.3 175.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 0.5 0.0 Import: Clearance and inspections required by customs authorities 1.5 175.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 0.5 0.0 Details – Trading across Borders in Los Angeles – Trade Documents Export Import Inland bill of lading Inland bill of lading Commercial invoice/ cargo control document NAFTA - Certificate of origin NAFTA Certificate of origin/ Canadian Customs Invoice Commercial Invoice Packing List Packing List Customs Release Form 3461 Customs Entry Form 7501 Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) Page 94   - The seller sues the buyer before the court with jurisdiction over Customs Entry Form 7501 Doing Business 2018 United States Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Enforcing Contracts - New York City Standardized Case Claim value USD 112,874.00 Court name Supreme Court of the State of New York, Civil Branch City Covered New York City OECD high OECD high Indicator New York City income income Overall Best Performer Time (days) 370 577.8 577.8 164.00 (Singapore) Cost (% of claim value) 22.9 21.5 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 15.0 11.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 Page 95   79.06: New York City of judicial processes Quality Business Doing index (0-18) 2018 United States 15.0 11.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 79.06: New York City 71.32: Germany (Rank: 22) 68.69: United Kingdom (Rank: 31) 54.35: Canada (Rank: 114) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in New York City – Time and Cost Time Cost 1000 50 910 45.7 Cost (% of claim value) 800 40 577.8 Time (days) 600 30 499 22.3 22.9 21.5 437 400 370 20 14.4 200 10 0 0 Canada Germany New York City OECD high income United Kingdom Figure – Enforcing Contracts in New York City and comparator economies – Measure of Quality New York City 2.5 4.5 3 5 Canada 2 2 1 4.5 Germany 3 1.5 2 4.5 United Kingdom 2 5 3.5 4.5 OECD high income 2.5 2.9 2 3.6 0 2 4 6 8 10 12 14 Page 96   16 0 0 Canada Germany New York City OECD high income United Kingdom Doing Business 2018 United States Figure – Enforcing Contracts in New York City and comparator economies – Measure of Quality New York City 2.5 4.5 3 5 Canada 2 2 1 4.5 Germany 3 1.5 2 4.5 United Kingdom 2 5 3.5 4.5 OECD high income 2.5 2.9 2 3.6 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in New York City Indicator Time (days) 370 Filing and service 30 Trial and judgment 240 Enforcement of judgment 100 Cost (% of claim value) 22.9 Attorney fees 14.4 Court fees 5 Enforcement fees 3.5 Quality of judicial processes index (0-18) 15.0 Court structure and proceedings (-1-5) 5.0 Case management (0-6) 4.5 Court automation (0-4) 3.0 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in New York City – Measure of Quality Page 97   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 United States Details – Enforcing Contracts in New York City – Measure of Quality Answer Score Quality of judicial processes index (0-18) 15.0 Court structure and proceedings (-1-5) 5.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 4.5 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.5 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by lawyers? Court automation (0-4) 3.0 1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 98   1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 Businesscourt? the competent Doing 2018 United States 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the Yes general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Enforcing Contracts - Los Angeles Standardized Case Claim value USD 112,874.00 Court name Superior Court of California, County of Los Angeles City Covered Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Time (days) 495 577.8 577.8 164.00 (Singapore) Cost (% of claim value) 42.0 21.5 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 12.0 11.0 11.0 15.50 (Australia) Page 99   if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 United States Enforcing Contracts - Los Angeles Standardized Case Claim value USD 112,874.00 Court name Superior Court of California, County of Los Angeles City Covered Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Time (days) 495 577.8 577.8 164.00 (Singapore) Cost (% of claim value) 42.0 21.5 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 12.0 11.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 71.32: Germany (Rank: 22) 68.69: United Kingdom (Rank: 31) 62.93: Los Angeles 54.35: Canada (Rank: 114) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Los Angeles – Time and Cost Time Cost 1000 910 45.7 50 42.0 Cost (% of claim value) 800 40 577.8 Time (days) 600 30 499 495 22.3 21.5 437 400 20 14.4 200 10 0 0 Canada Germany Los Angeles OECD high income United Kingdom Page 100   Figure – Enforcing Contracts in Los Angeles and comparator economies – Measure of Quality 0 0 Canada Germany Los Angeles OECD high income United Kingdom Doing Business 2018 United States Figure – Enforcing Contracts in Los Angeles and comparator economies – Measure of Quality Los Angeles 2.5 5 1 3.5 Canada 2 2 1 4.5 Germany 3 1.5 2 4.5 United Kingdom 2 5 3.5 4.5 OECD high income 2.5 2.9 2 3.6 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Los Angeles Indicator Time (days) 495 Filing and service 30 Trial and judgment 365 Enforcement of judgment 100 Cost (% of claim value) 42.0 Attorney fees 30 Court fees 5 Enforcement fees 7 Quality of judicial processes index (0-18) 12.0 Court structure and proceedings (-1-5) 3.5 Case management (0-6) 5.0 Court automation (0-4) 1.0 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Los Angeles – Measure of Quality Page 101   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 United States Details – Enforcing Contracts in Los Angeles – Measure of Quality Answer Score Quality of judicial processes index (0-18) 12.0 Court structure and proceedings (-1-5) 3.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 5.0 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) Yes 1.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by lawyers? Court automation (0-4) 1.0 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 102   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 United States 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the Yes general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 103   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 United States Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Resolving Insolvency - New York City OECD high OECD high Indicator New York City income income Overall Best Performer Recovery rate (cents on the dollar) 82.1 71.2 71.2 93.1 (Norway) Page 104   Creditor participation index (0-4) Doing Business 2018 United States Resolving Insolvency - New York City OECD high OECD high Indicator New York City income income Overall Best Performer Recovery rate (cents on the dollar) 82.1 71.2 71.2 93.1 (Norway) Time (years) 1.0 1.7 1.7 0.4 (Ireland) Cost (% of estate) 10.0 9.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 1 .. .. .. concern) Strength of insolvency framework index (0-16) 15.0 12.1 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 91.07: New York City 90.27: Germany (Rank: 4) 81.46: Canada (Rank: 11) 80.24: United Kingdom (Rank: 14) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in New York City – Time and Cost Time Cost 1.8 1.7 12 1.6 10.0 9.1 10 1.4 1.2 8.0 Cost (% of estate) 1.2 8 Time (years) 7.0 1.0 1.0 1 6.0 0.8 6 0.8 0.6 4 0.4 2 0.2 0 0 Canada Germany New York City OECD high income United Kingdom Figure – Resolving Insolvency in New York City and comparator economies – Measure of Quality Page 105   New York City 6 3 3 3 0 0 Canada Germany New York City OECD high income United Kingdom Doing Business 2018 United States Figure – Resolving Insolvency in New York City and comparator economies – Measure of Quality New York City 6 3 3 3 Canada 4.5 2.5 3 1 Germany 6 3 3 3 United Kingdom 5 3 2 1 OECD high income 5.4 2.8 2.3 1.9 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in New York City and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 90 87.5 85.2 85 82.1 80.6 80 75 71.2 70 65 60 New York City Canada Germany United Kingdom OECD high income Details – Resolving Insolvency in New York City Indicator Answer Explanation Proceeding reorganization As a general rule, unless a debtor believes that restructuring is hopeless, a debtor will likely seek bankruptcy protection. This is particularly true in a case where the chairman or other decision-maker controls and/or owns a large portion of the debtor equity. Moreover, under U.S. bankruptcy law, absent evidence of fraud or gross mismanagement, existing management is permitted to operate the debtor during the bankruptcy and has the first opportunity to file a plan. Mirage would therefore likely file for bankruptcy protection and seek and likely achieve a reorganization. However, there is a chance in the current environment that the case could end in a sale or return of the security (i.e., liquidation after a voluntary filing). Outcome going concern The hotel will continue operating after reorganization. Even if the hotel is sold, it will likely be sold as a going concern, because it would be worth less if it stopped operating. Page 106   New York City Canada Germany United Kingdom OECD high income Doing Business 2018 United States Details – Resolving Insolvency in New York City Indicator Answer Explanation Proceeding reorganization As a general rule, unless a debtor believes that restructuring is hopeless, a debtor will likely seek bankruptcy protection. This is particularly true in a case where the chairman or other decision-maker controls and/or owns a large portion of the debtor equity. Moreover, under U.S. bankruptcy law, absent evidence of fraud or gross mismanagement, existing management is permitted to operate the debtor during the bankruptcy and has the first opportunity to file a plan. Mirage would therefore likely file for bankruptcy protection and seek and likely achieve a reorganization. However, there is a chance in the current environment that the case could end in a sale or return of the security (i.e., liquidation after a voluntary filing). Outcome going concern The hotel will continue operating after reorganization. Even if the hotel is sold, it will likely be sold as a going concern, because it would be worth less if it stopped operating. Time (in years) 1.0 A Chapter 11 restructuring takes approximately 12 months. Hotel management will file for voluntary reorganization under Chapter 11. At that time, all other proceedings will be automatically stayed. Hotel management will continue operating the hotel under supervision of the US Trustee and a committee of unsecured creditors (appointed by the US Trustee). Unofficial (ad hoc) committees may also be involved. The hotel management will prepare a schedule of assets and liabilities, where it will list all of the known claims against Mirage. The court will then issue an order setting the date for all creditors to submit proof of their claims. If debtor and creditors do not agree on each other's representation of the loan, the issues will be litigated before the court. Once all claims have been confirmed, Mirage will propose a reorganization plan, which must pass "the best interest of the creditors test", so that creditors who vote against the plan receive at least as much as they would have received if the debtor were liquidation. The creditors will vote on the plan and accept it. When the plan becomes effective, the court will enter a final decree closing the case. Cost (% of 10.0 Major expenses will include attorneys' fees (around 6%), fees of accountants involved in the estate) restructuring proceedings (around 3%), and court fees (1%). Recovery rate (cents on the 82.1 dollar) Details – Resolving Insolvency in New York City – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 15.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 Page 107   insolvency framework? generally unable dollar) Doing Business 2018 United States Details – Resolving Insolvency in New York City – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 15.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 6.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit Yes 1.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over 1.0 ordinary unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 3.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are a ected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 3.0 Page 108   Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive Doing at least as Business much as 2018 what they United would obtain in a liquidation? States Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 3.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request Yes 1.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Resolving Insolvency - Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Recovery rate (cents on the dollar) 82.1 71.2 71.2 93.1 (Norway) Time (years) 1.0 1.7 1.7 0.4 (Ireland) Cost (% of estate) 10.0 9.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 1 .. .. .. concern) Strength of insolvency framework index (0-16) 15.0 12.1 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 91.07: Los Angeles 90.27: Germany (Rank: 4) 81.46: Canada (Rank: 11) 80.24: United Kingdom (Rank: 14) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Page 109   the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 United States Resolving Insolvency - Los Angeles OECD high OECD high Indicator Los Angeles income income Overall Best Performer Recovery rate (cents on the dollar) 82.1 71.2 71.2 93.1 (Norway) Time (years) 1.0 1.7 1.7 0.4 (Ireland) Cost (% of estate) 10.0 9.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 1 .. .. .. concern) Strength of insolvency framework index (0-16) 15.0 12.1 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in United States and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 91.07: Los Angeles 90.27: Germany (Rank: 4) 81.46: Canada (Rank: 11) 80.24: United Kingdom (Rank: 14) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Los Angeles – Time and Cost Time Cost 1.8 1.7 12 1.6 10.0 9.1 10 1.4 1.2 8.0 Cost (% of estate) 1.2 8 Time (years) 7.0 1.0 1.0 1 6.0 0.8 6 0.8 0.6 4 0.4 2 0.2 0 0 Canada Germany Los Angeles OECD high income United Kingdom Figure – Resolving Insolvency in Los Angeles and comparator economies – Measure of Quality Page 110   0 0 Canada Germany Los Angeles OECD high income United Kingdom Doing Business 2018 United States Figure – Resolving Insolvency in Los Angeles and comparator economies – Measure of Quality Los Angeles 6 3 3 3 Canada 4.5 2.5 3 1 Germany 6 3 3 3 United Kingdom 5 3 2 1 OECD high income 5.4 2.8 2.3 1.9 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Los Angeles and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 90 87.5 85.2 85 82.1 80.6 80 75 71.2 70 65 60 Los Angeles Canada Germany United Kingdom OECD high income Details – Resolving Insolvency in Los Angeles Indicator Answer Explanation Proceeding liquidation The outcome depends on whether (i) BizBank will work with Mirage to implement a (after an restructuring of its debt; or (ii) the terms governing BizBank's loan are over-market and can attempt at be forcibly restructured (called "cram-down") such that the payment amount will be reduced reorganization) sufficiently to enable Mirage to propose a plan to service its debt. In the latter case, Mirage would need to provide some treatment for and obtain the favorable votes of a sufficient number and amount of unsecured creditors because the United States Bankruptcy Code requires that a single class of impaired creditors vote in favor of the plan where the plan is not fully consensual. (Creditors are "impaired" where a plan affects their legal rights). A chapter 11 plan also must satisfy the "best interests of creditors" test, meaning that it must pay creditors at least as much as they would receive in a chapter 7 liquidation - under such a liquidation, BizBank would receive around 70% of its debt amount (since its debt is equal to the FMV of the property and the liquidation value is 70% of such value). However, given Mirage's cash flow in 2015 and anticipated future performance, liquidation after a Page 111   Los Angeles Canada Germany United Kingdom OECD high income Doing Business 2018 United States Details – Resolving Insolvency in Los Angeles Indicator Answer Explanation Proceeding liquidation The outcome depends on whether (i) BizBank will work with Mirage to implement a (after an restructuring of its debt; or (ii) the terms governing BizBank's loan are over-market and can attempt at be forcibly restructured (called "cram-down") such that the payment amount will be reduced reorganization) sufficiently to enable Mirage to propose a plan to service its debt. In the latter case, Mirage would need to provide some treatment for and obtain the favorable votes of a sufficient number and amount of unsecured creditors because the United States Bankruptcy Code requires that a single class of impaired creditors vote in favor of the plan where the plan is not fully consensual. (Creditors are "impaired" where a plan affects their legal rights). A chapter 11 plan also must satisfy the "best interests of creditors" test, meaning that it must pay creditors at least as much as they would receive in a chapter 7 liquidation - under such a liquidation, BizBank would receive around 70% of its debt amount (since its debt is equal to the FMV of the property and the liquidation value is 70% of such value). However, given Mirage's cash flow in 2015 and anticipated future performance, liquidation after a reorganization effort seems likely. Outcome going concern Given the 30% drop in value if the property is to be liquidated, BizBank may support a sale as a going concern so it captures as much value as possible on account of its secured debt. Time (in years) 1.0 Assuming Mirage did not take steps to prepare for a bankruptcy filing until it defaulted, it would take approximately 2-3 weeks to be prepared to file necessary documents. Then, Mirage will take advantage of its exclusivity period under the Bankruptcy Code, within which only it may propose a plan (11 U.S.C. sec. 1121(c), (d)). The initial period to propose the plan is 120 days. Given the size of the case and the need for the debtor to work with its lender (BizBank) in order for it to succeed, the reorganization effort would take 6 months. Thereafter, if reorganization is not possible and the property is to be sold and other assets liquidated, the liquidation process might take approximately 6 more months. Cost (% of 10.0 The entire procedure, taking into account a reorganization attempt that fails and is estate) converted to liquidation, would cost approximately 10% of the value of Mirage's estate. Major expenses will include attorneys' fees - 5,5%, remuneration of the trustee - 3.5%, and court fees - 1%. Recovery rate (cents on the 82.1 dollar) Details – Resolving Insolvency in Los Angeles – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 15.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization Page 112   dollar) Doing Business 2018 United States Details – Resolving Insolvency in Los Angeles – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 15.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 6.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit Yes 1.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over 1.0 ordinary unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 3.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are a ected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 3.0 Page 113   Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive Doing at least as Business much as 2018 what they United would obtain in a liquidation? States Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 3.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request Yes 1.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost Page 114   (i) notice period for redundancy dismissal; (ii) the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 United States Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Labor Market Regulation - New York City Details – Labor Market Regulation in New York City Answer Page 115   days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 United States Labor Market Regulation - New York City Details – Labor Market Regulation in New York City Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 1846.0 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) n.a. Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 0.0 Paid annual leave for a worker with 5 years of tenure (working days) 0.0 Paid annual leave for a worker with 10 years of tenure (working days) 0.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 0.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Page 116   Third-party Doing cation if United noti 2018 Business nine workers Statesare dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 0.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 0.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 0.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 0.0 Severance pay for redundancy dismissal for a worker with 1 year of tenure 0.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure 0.0 Severance pay for redundancy dismissal for a worker with 10 years of tenure 0.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 0.0 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 0.0 Receive 100% of wages on maternity leave? n.a. Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 6.0 Labor Market Regulation - Los Angeles Details – Labor Market Regulation in Los Angeles Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Page 117   Minimum wage applicable to the worker assumed in the case study (US$/month) 1762.1 Minimum contribution period for unemployment protection (months)? 6.0 Doing Business 2018 United States Labor Market Regulation - Los Angeles Details – Labor Market Regulation in Los Angeles Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 1762.1 Ratio of minimum wage to value added per worker 0.2 Maximum length of probationary period (months) n.a. Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 0.0 Paid annual leave for a worker with 5 years of tenure (working days) 0.0 Paid annual leave for a worker with 10 years of tenure (working days) 0.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 0.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Page 118   Third-party Doing cation if United noti 2018 Business nine workers Statesare dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 0.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 0.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 0.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 0.0 Severance pay for redundancy dismissal for a worker with 1 year of tenure 0.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure 0.0 Severance pay for redundancy dismissal for a worker with 10 years of tenure 0.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 0.0 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 0.0 Receive 100% of wages on maternity leave? n.a. Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 12.0 Business Reforms in United States In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for United States implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Labor Market Regulation: The United States – Los Angeles increased the maximum paid days of sick leave a year. DB2015 Starting a Business: In the United States starting a business became easier in New York City thanks to faster online procedures. Page 119   DB2011 Minimum contribution period for unemployment protection (months)? 12.0 Doing Business 2018 United States Business Reforms in United States In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for United States implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Labor Market Regulation: The United States – Los Angeles increased the maximum paid days of sick leave a year. DB2015 Starting a Business: In the United States starting a business became easier in New York City thanks to faster online procedures. DB2011 Paying Taxes: In the United States the introduction of a new tax on payroll increased taxes on companies operating within the New York City metropolitan commuter transportation district. Page 120   Paying Taxes: In the United States the introduction of a new tax on payroll increased taxes on companies operating within the New York Doing 2018 commuter City metropolitan Business transportation district. United States Page 121