COMPARING REGULATION IN VENETO WITH 181 ECONOMIES GLOBALLY 74684 in Veneto 2009 Veneto COMPARING REGULATION IN VENETO WITH 181 ECONOMIES GLOBALLY in 2009 A copublication of the World Bank and the International Finance Corporation © 2009 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail feedback@worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A publication of the World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank Group does not guarantee the accuracy of the data included in this work. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. Copies of Doing Business 2009, Doing Business 2008, Doing Business 2007: How to Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth and Doing Business in 2004: Understanding Regulations and other subnational reports may be purchased at www.doingbusiness.org. Contents Doing Business in Veneto 2009 measures employing workers, registering property, Overview 2 business regulations and their enforce- getting credit, protecting investors, paying Doing Business topics ment in the Italian region of Veneto, taxes, trading across borders, enforcing Starting a business 4 represented by the city of Padua. It is the contracts and closing a business. Data in Dealing with first subnational report issued for a high Doing Business in Veneto 2009 are current construction permits 6 income economy for the Doing Business as of June 1, 2008. Employing workers 8 series, which currently covers 181 econo- The indicators are used to analyze Registering property 10 mies around the world. economic outcomes and identify what Getting credit 12 Comparisons with Rome and the rest reforms have worked, where and why. Protecting investors 14 of the world are based on the indicators in Other areas important to business—such Doing Business 2009, the 6th in a series of as country’s proximity to large markets, Paying taxes 16 annual reports published by the World Bank quality of infrastructure services (other Trading across borders 18 and the International Finance Corporation. than services related to trading across Enforcing contracts 20 The indicators in Doing Business in Veneto borders), the security of property from Closing a business 22 2009 are also comparable with the data in theft and looting, the transparency of gov- Data notes 24 other subnational Doing Business reports. ernment procurement, macroeconomic Doing Business indicators 36 All Doing Business data and reports are conditions or the underlying strength of Indicator details 37 available at www.doingbusiness.org. institutions—are not directly studied by Acknowledgments 45 Doing Business investigates the regu- Doing Business. lations that enhance business activity and The report was requested by the Gov- those that constrain it. Doing Business ernment of the Veneto Region and has presents quantitative indicators to mea- been prepared with the support of the Re- sure the regulations affecting 10 stages search Centre of Unioncamere del Veneto, of the life of a business: starting a busi- the union of Veneto’s Chambers of Com- ness, dealing with construction permits, merce. Current features Downloads News on the Doing Business project Doing Business reports as well as subnational, http://www.doingbusiness.org country and regional reports and case studies http://www.doingbusiness.org/downloads Rankings How economies rank—from 1 to 181 Subnational projects http://www.doingbusiness.org/ Differences in business regulations at the economyrankings subnational level http://www.doingbusiness.org/subnational Reformers Short summaries of DB2009 reforms, lists Law library of reformers since DB2004 and a ranking Online collection of business laws and simulation tool regulations http://www.doingbusiness.org/reformers http://www.doingbusiness.org/lawlibrary Data time series Local partners Customized data sets since DB2004 More than 6,700 specialists in 181 economies http://www.doingbusiness.org/customquery who participate in Doing Business http://www.doingbusiness.org/LocalPartners Methodology and research The methodologies and research papers Reformers’ Club underlying Doing Business Celebrating the top 10 Doing Business http://www.doingbusiness.org/ reformers MethodologySurveys http://www.reformersclub.org Blog Business Planet Online journal focusing on business Interactive map on the ease of doing business regulation reform http://www.doingbusiness.org/map http://blog.doingbusiness.org 2 TABLE 1.1 Overview Ease of doing business in the EU: global rankings of member states 5 Denmark 36 Slovakia 6 United Kingdom 41 Hungary 7 Ireland 45 Bulgaria 14 Finland 47 Romania 17 Sweden 48 Portugal 19 Belgium 49 Spain 22 Estonia 50 Luxembourg 25 Germany 54 Slovenia 26 Netherlands 67 Padua (Veneto) 27 Austria 68 Rome 28 Lithuania 75 Czech Republic 29 Latvia 76 Poland Veneto 31 France 96 Greece EU members Source: Doing Business database. From the 13th to the 15th century, Venice among the most dynamic and innovative countries included in the Doing Business was the trade capital of the world. For in Europe. National and local govern- sample (table 1.1). Veneto’s ranking var- a long time, its institutional arrange- ments should try to help them by creating ies across topics (figure 1.2). In starting a ments were looked upon as a model by the regulatory environment that encour- business, dealing with construction per- philosophers and policy-makers. In fact, ages their firms to start-up and grow. mits, registering property, trading across many of the innovations developed by Doing Business studies business reg- borders and closing a business, Padua Venetian traders—such as double-entry ulations from the perspective of a small- stands ahead of Rome. Both metropolitan bookkeeping, the check and maritime to a medium-sized domestic firm. Rome, areas rank the same in regards to enforc- insurance—are still in use today. Com- the most populated city in Italy, represents ing contracts. Padua ranks slightly lower petition among merchants, and stable the country in the global Doing Business than Rome on paying taxes. institutions that encouraged private in- report. However, even in relatively cen- Doing Business rankings do not vestment allowed Venice to expand its tralized countries like Italy, local business tell the whole story about an economy’s commercial domination throughout the regulations and their enforcement may business environment. The indicators do Mediterranean Sea and beyond. Yet, not differ across locations. Doing Business in not account for all factors important for all was perfect. Competition from new Veneto 2009 expands the indicators in FIGURE 1.1 trade routes, banking crises and attacks 7 of the 10 Doing Business topics to the How Veneto compares globally on the ease from other nations all led to the decline Veneto region, represented by the city of of doing business of the Venetian empire. Padua. Three of the indicators—employ- Global ranking (1–181) Now Venice is the capital of the ing workers, protecting investors and get- 1 United States EASIEST region of Veneto, which is the subject of ting credit—are based on the provisions Denmark (EU BEST PRACTICE) 20 United Kingdom this study. Over the last 40 years, Veneto contained on national laws. Therefore, Canada has risen from its ashes to experience an no subnational analysis was conducted. Japan 40 economic miracle that has turned it into This report presents the results for Italy in Germany France one of the richest and most industrialized Doing Business 2009 for these topics. 60 regions of Italy. Veneto currently houses With 10.3 enterprises for every 100 Padua 67 Rome 68 some of Italy’s most famous multination- inhabitants, the province of Padua ranks 80 China als, yet its economic engine is mainly fu- first in enterprise density among the 7 eled by thousands of small- and medium- provinces of Veneto. Together with Ven- 100 sized enterprises. Organized in clusters, ice and Treviso, Padua forms the so- they cover almost all sectors—from the called “Pa-Tre-Ve Metropolitan Area.â€? 120 Russia most traditional (food and wine, artis- With a population of 2.5 million people, India 140 Brazil tic ceramics and glassmaking, goldsmith it is the economic and cultural heart of and silversmith, furniture, fashion, tech- the region.1 160 nical apparel, tourism and machinery) Compared to the 181 economies to the most advanced (nanotechnology, measured by Doing Business indicators 181 MOST biotechnology, information technology, around the globe, Veneto (represented DIFFICULT astrophysics, aerospace and mechatron- by Padua) would rank 67th (figure 1.1)— Note: Rankings on the ease of doing business are the average of the economy's rankings on the 10 topics covered in Doing Business 2009. ics). The entrepreneurs in Veneto are ahead of Rome and 22 of the 25 EU Source: Doing Business database. OVER VIE W 3 FIGURE 1.2 Global rankings on Doing Business topics—Padua, Rome and the EU compared #1 RANKED NEW ST. VINCENT & UNITED SAUDI NEW HONG KONG GLOBALLY SINGAPORE ZEALAND THE GRENADINES STATES ARABIA MALAYSIA ZEALAND MALDIVES SINGAPORE CHINA JAPAN EU average 26 47 47 53 67 75 79 84 Padua Rome 80 133 156 Most difficult (181) Ease of Starting a Dealing with Employing Registering Getting Protecting Paying Trading Enforcing Closing a doing business business construction workers* property credit* investors* taxes across borders contracts business permits * No subnational analysis was conducted for these topics. The rankings are based on Doing Business 2009 and are the same for Padua and Rome. Source: Doing Business database. doing business—for example, macroeco- as reforms to bankruptcy procedures— continues—28 of the 31 states introduced nomic conditions, infrastructure, work- have also applied to businesses in Veneto. a total of 40 reforms. The conclusion: force skills or security. But improvements However, implementation tends to vary what gets measured gets done. in an economy’s ranking do indicate that due to different levels of efficiency in the Research finds that countries with its government is creating a regulatory local branches of national institutions. burdensome regulation have higher un- environment that is more conducive to One example of regional variation is seen employment rates and slower economic business. At the same time, being a top in the courts. Although Italy’s Code of growth. More recent research gives in- performer should not lead to government Civil Procedure applies to all regions, sights into the impact of reforms. One complacency. Both Singapore and New courts in Rome take significantly less study reports some of the payoffs of re- Zealand—numbers 1 and 2 on the ease time to resolve simple commercial dis- forms in Mexico: the number of regis- of doing business—know this well. They putes than those in Padua. Improving the tered businesses rose by nearly 6%, em- introduced several reforms to ease busi- business environment in Veneto requires ployment increased by 2.6% and prices ness entry and operation between June reforms at the national and local level, fell by 1%, thanks to competition from 2007 and June 2008. as well as coordination among different new entrants.2 Where regulation is trans- Since 2004, Doing Business has levels of government to ensure effective parent, efficient and implemented in a recorded almost 1,000 reforms world- implementation of reforms. simple way, it is easier for aspiring entre- wide—239 of those just last year (be- Publishing comparative indicators preneurs to operate within the rule of law tween June 2007 and June 2008). During of business regulations and their enforce- and to benefit from the opportunities and the last 6 years, Italy (as represented by ment inspires governments to act. Com- protections that the law provides. Rome) introduced 10 business environ- parisons among cities within a country ment reforms. Most of them were posi- are even stronger drivers for reform. That NOTES tive for business operations. Consolidated was the case in Mexico where a subna- 1. Located at the crossing of two important highways—the Venezia-Milano (A4) and registration procedures at the Chamber tional report covered 12 states in 2005. the Bologna-Padova (A13)—Padua is well of Commerce in Rome, substantially re- The study created competition to reform connected by road and railway to all the duced the number of steps and time to as governors and mayors had a difficult major cities in the country. A high-speed train connects it to Veneto’s capital Venice (in register a company. Italy also reformed time explaining why it took longer or 20 minutes) and to Italy’s economic capital bankruptcy proceedings, shifting the cost more to do business in their city. Milan (1 hour and 54 minutes). Airports and focus from liquidation to corporate re- States that had not been included the first ports are accessible. Padua’s logistic hub—the organization and restructuring. However, time asked to be measured in subsequent Interporto Intermodale—is one of the largest logistic hubs in Italy as well as an important during that same time, labor regulations reports. The second benchmarking ex- gateway for trade not only with the rest of turned stricter, with the cost of dismiss- panded the analysis to all 31 states and Europe but also with Asia and Africa. Padua’s ing redundant workers increasing. updated the indicators for the first 12, industrial zone (in the eastern part of the Like Rome, Padua has also benefited showing that 9 of the initial 12 states had city) is one of the biggest in Europe. from business start-up reforms. Regis- implemented reforms in the areas cov- 2. Bruhn, Miriam. 2008. “License to Sell: The trations via a single notification at the ered by Doing Business. The third Doing Effect of Business Registration Reform on Entrepreneurial Activity in Mexico.â€? Policy Chamber of Commerce can be completed Business in Mexico report, launched in Research Working Paper 4538, World in just 2 days. National reforms—such 2008, shows that the impetus to reform Bank, Washington, D.C. 4 Starting 25% of the initial capital into a bank ac- FIGURE 2.2 How Veneto compares globally on count. Together, the 4 business start-up starting a business indicators measured by Doing Business a business rank Veneto (represented by Padua) at Global ranking (1–181) 1 Canada 47th place among 181 economies glob- EASIEST Ireland ally (figure 2.2) and 14th within the Eu- (EU BEST PRACTICE) 20 ropean Union (EU). Although registering United States United Kingdom a company in Veneto is faster than in 40 France most EU economies, it costs 3 times the Padua 47 EU average (figure 2.3). The difference in 60 Rome 53 Japan, Russia cost is mainly due to high notary fees for incorporation documents. 80 One reason governments should 100 make business registration easier and Germany more affordable is to encourage the cre- 120 The process of company registration var- ation of new companies. When France India Brazil ies substantially across the world. In New reformed its business registration to re- 140 Zealand—the easiest place to register a duce the time and cost to start a busi- China company—the entire process takes just ness, business registrations increased by 160 1 procedure, 1 day and costs 160 New 18% the following year.1 Furthermore, Zealand dollars (€ 87)—equivalent to easier start-up procedures are correlated 181 MOST DIFFICULT just 0.4% of the country’s income per with higher productivity among existing Note: Rankings are the average of the economy ranking on the capita. But in many other economies, firms. A recent study of 97 countries procedures time, cost and paid-in minimum capital for starting a business. See Data notes for details. entrepreneurs trying to set up a business found that reducing entry costs by 90% Source: Doing Business database. face obstacles such as high costs, delays of income per capita increased total fac- and procedural complexities. tor productivity by an estimated 22%.2 In Padua, starting a business is rela- Simpler and faster business entry makes Commerce in Padua was one of the tively easy: it requires 6 steps, 7 days and it easier for workers and capital to move pilot locations to implement the uni- costs 17.1% of Italy’s income per capita across sectors when economies experi- fied registration procedure, starting from (figure 2.1). The same number of proce- ence economic shocks. A recent study February 2008. Now, 4 of the procedures dures is required in Padua as in Rome, of 28 sectors in 55 countries found that necessary to register a new business may but in Rome the procedures take 3 days sectoral employment reallocation is be carried out with a single notice to longer and cost the equivalent to 17.8% smoother in countries where starting a the Registry of Enterprises based at the of Italy’s income per capita. In addition, business is faster.3 Finally, if it is easy to Chambers of Commerce. The notice is across Italy entrepreneurs must deposit set up a business, companies that would filed electronically. Immediately after fil- FIGURE 2.1 otherwise operate in the informal sec- ing, the official Registry of Enterprises Starting a business in Padua tor are more likely to legalize their op- issues a receipt, which enables the com- Time Cost erations. Formally registered businesses pany to start its business. At the same (days) (% of income per capita) 8 20 grow larger and contribute to govern- time it communicates the registration ment revenues by paying taxes.4 of the new company to all the other Time—7 days Cost—17.1% Recognizing these benefits, coun- relevant authorities—including the local 6 15 tries around the world have developed tax office, Social Security Administration innovative solutions to make starting (INPS) and the Accident Insurance Of- a business easier. Italy is one of them. fice (INAIL). In Padua, registration with 4 10 In April 2007, Law No. 40/2007 (the a single notification can be completed so-called "Bersani Law") significantly within 2 days. However, as in all other simplified the procedure for starting Italian cities that have implemented the 2 a business. The law tackled the issue new procedure, using the new system of registrations with multiple agencies is not yet mandatory and the number 0 0 by establishing a single-notice registra- of companies registering with a single 1 2 3 4 5 6 tion (Comunicazione Unica). As a result, notice remains very low.5 Procedures starting a business in Veneto has become Source: Doing Business database. much easier in 2008. The Chamber of DOING BUSINESS TOPICS 5 FIGURE 2.3 Companies, with no notary’s participa- Procedures, time and cost to start a business in Veneto 17.8 tion. The United Kingdom ranks among It 17.1 the top 10 economies globally for the Padua ease of starting a business. It Rome FACILITATE THE TRANSITION TO THE SINGLE-NOTIFICATION SYSTEM Although registration through a single EU Average It 6 17 5.2 notification has been available to compa- nies in Padua since February 2008, very DENMARK 0 few have taken advantage of it so far. It 10 The single-notice registration (Comuni- BELGIUM Cost EU LOWEST 3 % of income per capita cazione Unica) is soon due to become 7 compulsory for all businesses, and the BELGIUM 4 Chamber of Commerce and other rel- GLOBAL CANADA, 1 LOWEST NEW ZEALAND evant agencies must be prepared for the NEW ZEALAND 1 increase in use. A smooth transition to Procedures Time the single-notification registration sys- Number Days Source: Doing Business database. tem will also require a broad public cam- paign to educate entrepreneurs as well as the professionals assisting in company WHAT TO REFORM? France and Hungary. Today, the 10 econ- formation. omies where registering companies is ELIMINATE THE MINIMUM CAPITAL easiest have no paid-in minimum capital NOTES REQUIREMENT requirements. Eliminating the paid-in minimum capi- 1. World Bank. 2004. Doing Business in MAKE NOTARIZATION OPTIONAL FOR 2005: Removing Obstacles to Growth. tal requirement would require amending Washington, D.C. article 2463, 2nd comma, 4 of the Italian INCORPORATION DOCUMENTS 2. Barseghyan, Levon. 2008. “Entry Costs Civil Code. Currently, businesses in Italy Article 2463, 2nd comma of the Italian and Cross-Country Differences in Produc- must have € 10,000 as start-up capi- Civil Code also requires that limited li- tivity and Output.â€? Journal of Economic tal—25% of which must be deposited in ability companies have a public deed of Growth 13 (92): 145-67. a bank account prior to company’s reg- incorporation—including the company’s 3. Ciccone, Antonio, and Elias Papaioannou. istration. This payment is equivalent to bylaws—drafted and executed before a 2007. “Red Tape and Delayed Entry.â€? Jour- nal of the European Economic Association 9.7% of Italy’s income per capita. Paid-in notary public. The cost of notarization 5 (2-3): 444-58. minimum capital requirements are justi- of documents (averaging € 3,132) rep- 4. Djankov, Simeon, Rafael La Porta, Floren- fied by some countries on the grounds resents over 70% of the total cost to cio Lopez-de-Silanes and Andrei Shleifer. that they protect creditors by protecting register a company in Padua.6 Globally, 2002. “The Regulation of Entry.â€? Quarterly the company from insolvency. However, 86 countries do not require notaries’ Journal of Economics 117 (1): 1-37. bankruptcy recovery rates are no higher involvement in the registration process. 5. The experimental implementation of Comunicazione Unica started on February in countries with paid-in minimum capi- For example, in 2005 Portugal success- 19th 2008. From that day to September tal requirements than in those without. In fully made notary involvement optional 4, 2008, a total of 217,828 new businesses practice, minimum capital requirements, for companies introducing standard were registered in Italy, out of which only rather than protecting creditors, serve incorporation documents provided by 1,202 were registered through Comuni- cazione Unica. One fourth (302) of the only as a barrier to entry since lenders the registry. Of course, larger companies Comunicazione Unica registrations were base their decisions on commercial risks with more complex structures may still initiated in Veneto, including 48 in Pa- and not on government imposed mini- resort to professional consultation. Also, dova. Source: Infocamere. mum capital requirements. Eliminating in the United Kingdom, a standard form 6. The costs are calculated for a company or reducing minimum capital require- for the memorandum and articles of with a capital equal to 10 times Italy’s income per capita (€ 258,630). For more ment has been one of the most popular association is publicly available. It can details on methodology see the Data notes reforms of business start-up world-wide: be purchased from accountants, solici- section. over the last 5 years, 22 economies have tors, company formation agents, or freely either reduced or abolished a minimum downloaded online. Completed forms capital requirement—including Finland, are then submitted to the Registrar of 6 FIGURE 3.2 Dealing with Procedures, time and cost to deal with construction permits in Veneto construction Padua 273 It 136.4 permits It Rome It 257 109.2 EU Average 17 185 83.0 It 14 EU LOWEST DENMARK 6 GLOBAL LOWEST FINLAND 38 KOREA 34 In the regulation of construction, strik- HUNGARY 10.3 ing the right balance between protecting QATAR 0.8 the public while remaining transparent, Procedures Time Cost Number Days % of income per capita efficient and affordable to the private Source: Doing Business database. sector has been a challenge for many governments. Some have succeeded. One average, EU economies require construc- Fire Department, which typically takes success story is Singapore, where obtain- tion permits that take 185 days and cost 45 days. After these hurdles are cleared, ing all construction permits and utility 83% their country’s income per capita the process becomes more efficient. Mid- connections takes 11 steps, 38 days and (figure 3.2). If you compare Padua to construction inspections in Padua con- costs just 21.2% of Singapore’s income the 181 economies around the globe for form to good international practices: per capita. which this Doing Business indicator is structural and utility tests are conducted The same process in Padua is much available, Padua ranks 80th overall (fig- by independent, certified professionals, more lengthy and costly: 14 procedures ure 3.3) and 18th within the EU. thus reducing administrative hassles for take an average of 273 days and cost The main cause for construction- the builders. Finally, occupancy permits € 28,246—equal to 109% of Italy’s in- related delays in Padua is the time to must be released within 30 days of their come per capita (figure 3.1). Within Italy, obtain a building permit. A building applications. After 30 days, a silence-is- Padua’s process takes slightly longer but permit may legally take 135 days to be consent rule applies to this procedure. is less expensive than Rome’s, where it granted—as set in the Decree of the Stricter building rules and regula- takes 257 days and costs 136% of Italy’s President of the Republic n. 380 June tions result in fewer accidents. But where income per capita. Other economies 06, 2001, Art. 20, cc. 3, 7, and 8.1 The the process is too burdensome, fewer proj- within the EU are more efficient. On second bottleneck is clearance from the ects get started and construction can move FIGURE 3.1 to the informal economy, which does not Obtaining a building permit and utility connections in Padua Cost serve the public interest. Streamlining the Time (days) (% of income per capita) process to obtaining construction per- 300 120 mits has several benefits. First, countries Time—273 days Cost—109.2% with simpler procedures and less costly regimes have larger construction sectors. Second, they have cheaper offices and 200 80 warehouses for businesses. In Denmark and Germany—the 2 easiest countries in the EU to comply with building regulation 100 40 and obtain utility connections—the rental prices for warehouse space are some of the lowest in the EU.2 Third, reducing the cost and hassle of obtaining licenses keeps 0 0 more businesses in the formal economy, 1 14 therefore improving public safety. Finally, Procedures Source: Doing Business database. DOING BUSINESS TOPICS 7 FIGURE 3.3 approvals. In Singapore, the agencies re- a building permit and allows for efficient How Veneto compares globally on sponsible for building permits have re- processing. Once an online application dealing with construction permits cently halved their internal time limits, is submitted, builders receive regular Global ranking (1–181) making its system one of the most ef- updates on the status of their pending 1 EASIEST Denmark ficient in the world. Twenty-seven econ- application via e-mail or text messaging. (EU BEST PRACTICE) 20 Germany omies—including France and Hong Kong As a result of the online system, the time France (China)—apply “silence-is-consentâ€? rules to deal with construction permits was United States to their permitting process, with time reduced by two-thirds. This reform saves 40 Canada Japan limits ranging from 2 to 4 weeks. 4 time for entrepreneurs and government 60 United Kingdom officials alike and would benefit both DIFFERENTIATE PERMIT groups in Veneto. 80 Padua 80 REQUIREMENTS BY RISK LEVEL Rome 83 Today, all new construction projects in 100 NOTES Veneto undergo a high level of scrutiny Brazil during the approval process. Another 120 option is to differentiate permit require- 1. The law set the time for issuance of build- ing permits at 135 days for municipalities 140 India ments depending on the risk level of the with more than 100,000 inhabitants, and construction project. This approach was 75 days for municipalities with less than 160 adopted in the German state of Bavaria 100,000 inhabitants. in 1994. For low-risk projects, quali- 2. DEOL Partners. 2007. Overview of Ware- China 181 MOST fied architects assume responsibility for house Real Estate Market. DIFFICULT Russia the construction. Medium-risk projects 3. PricewaterhouseCoopers. 2005. “The Note: Rankings are the average of the economy rankings on the procedures, time and cost to comply with formalities to build require that an independent certified ap- Economic Impact of Accelerating Permit- a warehouse. See Data notes for details. ting Process on Local Development and Source: Doing Business database. praiser approve the plans. Only high-risk Government Revenues.â€? Report prepared project are fully reviewed by building for American Institute of Architects, governments can save money by admin- authorities.5 By 2002 Bavarian builders Washington, DC. istering fewer and simpler licenses and had saved an estimated € 154 million in 4. World Bank. 2008. Doing Business 2009. inspections to meet public safety needs. building permit fees, while building au- Washington, D.C. Countries that score well on the ease thorities had 270 fewer employees on their 5. Bayerisches Staatsministerium des In- nern. 2002. Erfahrungsbericht BayBO of dealing with construction permits have payroll. This model has since been rolled 1998. Munich. rigorous but expeditious and transpar- out to the rest of Germany.6 Introducing 6. World Bank. 2008. Doing Business 2009. ent permitting regimes. Speedy approvals a similar system in Veneto and across Washington, D.C. benefit property developers while also Italy could limit the volume of permits bringing in revenue to the government. that municipal agencies must review. At A recent study in the United States shows the same time, agencies could focus their that accelerating permit approvals by 3 resources on the expeditious handling of months could increase local governments’ high-risk, complex projects. In a similar property tax revenues by 16% and overall vein, only higher risk projects should be construction spending by 5.7%.3 required to undergo reviews from the Fire Department and Public Health Agency WHAT TO REFORM? before construction starts. SHORTEN THE TIME LIMITS FOR ISSUING PERMITS INTRODUCE ONLINE PERMIT According to Italian law, the time limit APPLICATIONS for issuing a building permit is 135 days, Currently, applications for building per- and in practice it may even take longer. mits in Veneto are paper-based. In con- This is extraordinarily long compared to trast, developers in Austria, Denmark, other developed countries. In Germany, a Iceland, Malaysia, Norway, Portugal and building permit is issued within 25 days. the United States can complete applica- In Denmark, the process takes 40 days. tions online. In Singapore, a new data Other countries continue to set ambi- management system provides easy access tious goals to shorten the time for permit to the information needed for obtaining 8 Employing FIGURE 4.1 How Italy compares globally on employing workers workers Global ranking (1–181) 1 United States EASIEST Denmark (EU BEST PRACTICE) 20 Japan Canada 40 United Kingdom 60 80 Italy 75 India 100 Russia China 120 Employment regulations support con- Among the economies analyzed by Brazil tracts between employers and workers Doing Business, Italy’s ease of employing 140 Germany while protecting workers from discrimi- workers ranks it 75th of 181 economies France natory or unfair treatment by employers. globally (figure 4.1) and 8th among the 160 Doing Business measures the amount of 25 EU members. Italy scores 38 out of flexibility in hiring regulations, work- 100 points on the rigidity of employ- 181 MOST DIFFICULT ing hours and dismissal in a manner ment index—ahead of 15 EU countries, Note: Rankings are the average of the economy rankings on the consistent with the conventions of the including Germany, France and Spain. difficulty of hiring, rigidity of hours, difficulty of firing and firing cost indices. See Data notes for details. International Labor Organization (ILO). There is no time limit on the use of fixed Source: Doing Business database. An economy can have the most flexible term contracts, but their scope is limited. labor regulations as measured by Doing Italian regulations determine that fixed Business while having ratified and being term contracts should be used only when bent workers, but overly rigid regula- in compliance with all conventions di- specific technical, productive or orga- tions come with undesirable side effects rectly relevant to the factors measured nizational reasons justify them. Labor which may reduce productivity growth. by Doing Business and with the ILO regulations allow for a 6-day workweek Those undesirable side effects may in- core labor standards. No economy can and overtime. There are some restric- clude fewer new jobs, smaller company achieve a better score by failing to com- tions on night work and the day of rest size, less investment in research and ply with these conventions. is by default Sunday except in specific development, longer spells of unemploy- The employing workers indicator cases provided by law. Redundancy is ment and a larger informal sector. When is made up of two measures: a rigidity permitted as a basis for termination, but economies err on the side of excessive ri- of employment index and a firing cost the law requires companies with more gidity, it is to the detriment of businesses measure. The rigidity of employment than 15 workers to notify the Ministry and workers alike. index is the average of three subindices: of Labor when redundancy lay-offs will Denmark is a successful example of difficulty of hiring, rigidity of hours and affect 5 or more workers in a 120-day how job flexibility can be reconciled with difficulty of firing. Each index takes val- period. Also, the retraining or reassign- employment security. Danish employers ues between 0 and 100, with higher val- ment of a redundant worker is required face no restrictions against laying off ues indicating more rigid regulation. The before termination. In addition, national workers for economic reasons other than firing cost indicator measures the cost of rules establish a set priority list for firing providing advance notice. Most Danish advance notice requirements, severance and rehiring. Dismissal costs amount to workers are well prepared by opting for payments and penalties due when termi- 11 weeks of salary (figure 4.2). Only 4 EU voluntary unemployment insurance.1 The nating a redundant worker, expressed in countries have lower firing costs: Den- flexible employment regulations benefit weeks of salary. mark, Austria, Bulgaria and Romania. workers because they can transfer from Because Doing Business employ- Governments all over the world one formal job to another with ease. In ment indicators are based on the provi- face the challenge of balancing worker fact, 70% of Danes believe it is good to sions contained in national labor laws, protections and labor market flexibility. change jobs frequently. no subnational analysis was conducted Analysis across economies shows that Reforms of employment regulations for Veneto. This chapter presents the re- employment regulations generally in- are scarce. Since 2004, Doing Business sults for Italy in Doing Business 2009. crease the tenure and wages of incum- has only registered 77 such reforms—of DOING BUSINESS TOPICS 9 FIGURE 4.2 Rigidity of employment and firing cost in Italy EU Average 41 27 Italy 38 (all regions) Italy 11 (all regions) EU LOWEST DENMARK 10 GLOBAL SINGAPORE, DENMARK, UNITED STATES 0 NEW ZEALAND, 0 LOWEST UNITED STATES Rigidity of Firing cost employment index Weeks of salary 0–100 Source: Doing Business database. which 47 made labor regulations more MAKE WORK HOURS MORE FLEXIBLE NOTES BY CUTTING RESTRICTIONS ON NIGHT flexible while 30 made them more rigid. WORK AND WEEKLY HOLIDAY One of the 47 reforms that introduced 1. Data on the share of the labor force cov- ered by unemployment insurance is from flexibility in the Italian labor market By law, night work cannot exceed 8 hours 2002. Clansen, Jochen and Elke Viebrock. was the Legislative Decree 276/2003, in a 24-hour period in Italy. Also, col- 2008. “Voluntary Unemployment Insur- the so-called “Biagi law.â€? It created flex- lective agreements require a premium ance and Trade Union Membership: In- ible contracts and ended the govern- for regular night work. In Canada and vestigating the Connections in Denmark and Sweden.â€? Journal of Social Policy ment’s monopoly on job placement ser- the UK, by contrast, there are no such 37(3): 433-51. vices.2 The latest collective agreement restrictions on regular night hours. In 2. Provisions on part-time and fixed-term for metal-mechanic workers made firing addition, while having a weekly holiday contracts were subsequently modified by more difficult by increasing the notice is a global standard, countries with more Law No. 247/2007. period from 2 weeks to 75 days. The low flexible regulations—such as the United number of labor reforms worldwide is States and Denmark—do not determine not surprising given the high number the specific day of the week by statute. of stakeholders involved. Support for Italy could cut the requirement that Sun- reform often requires long tripartite con- day is always the day of rest. sultations between governments, labor unions and employers’ associations. ELIMINATE THE SET PRIORITY LIST FOR FIRING AND REHIRING WHAT TO REFORM? In Italy, current labor laws set a priority list for firing and rehiring based on such ALLOW FIXED-TERM CONTRACTS factors as family responsibilities and se- FOR PERMANENT TASKS niority. Eliminating these rules would According to Italian law, employers are give employers more freedom to retain allowed to hire on fixed-term contracts and rehire the most valuable members only when there are "specific technical, of their workforce in case of temporary productive, organizational or substitu- economic difficulties—as seen in other tive reasons." Denmark, Switzerland and European countries such as Belgium, Belgium—Europe’s top performers on Denmark, Spain and the UK. the ease of employing workers—allow fixed-term contracts for permanent tasks for added flexibility. 10 Registering FIGURE 5.2 How Veneto compares globally on registering property property Global ranking (1–181) 1 EASIEST Slovakia (EU BEST PRACTICE) United States 20 United Kingdom China 40 Canada Russia Japan 60 Germany 80 Padua 79 Rome 93 100 India 120 Efficient property registrations make 5 procedures to register property. Reg- Brazil transfers easier, less expensive and more istering property is straightforward in 140 secure. Titleholders can use their prop- Sweden; only 1 step is required. Among erty as collateral for loans to start a EU countries, only France and Greece 160 business or expand operations. Doing require more procedures than Italy—9 France Business measures the ease of registering and 11, respectively. Costs in Padua rep- 181 MOST DIFFICULT property by recording the required pro- resent 4.4% of the property value and are Note: Rankings are the average of the economy ranking on the cedures to transfer the property of a land slightly lower than in Rome, mainly due procedures, time, and cost for a business to purchase, transfer and register property from another business. See Data notes for details. and building between two businesses. to lower notary fees. This is similar to the Source: Doing Business database. In Padua, it takes 8 steps, 19 days EU average, but over 4 times higher than and 4.4% of the property value to com- the best practices in countries like Slova- tion costs by simplifying the procedures plete a transfer (figure 5.1). A country kia, Estonia, Lithuania, Poland and Den- to transfer property increases the ability with this performance would rank 79th mark, where registering property costs of companies to use their assets in the of 181 economies, and 17th among EU less than 1% of the property value. most efficient way. Land and buildings members (figure 5.2). Registering prop- Economies that score well on the represent between half and three quar- erty in Padua is faster than in Rome, ease of registering property tend to have ters of the wealth in most European where an entrepreneur spends 27 days to simple procedures, low transfer taxes, countries and are often the preferred complete the same procedures. Padua is fixed registration fees, online registries form of collateral by banks. Property also 5 weeks faster than in the average EU and time limits for administrative proce- registration plays an essential role in country, where it takes 2 months (figure dures. They also make the use of notaries economic development. 5.3). However, EU countries require only and lawyers optional. Reducing transac- In 2001, Italy made a positive re- FIGURE 5.1 form by unifying its cadastre and land Time and cost to register property in Padua Cost registry into a single agency—Agenzia Time (days) (% of property value) del Territorio. In addition, investments 20 5 in information technology and digitized Time—19 days records have made it possible for Italian 16 Cost 4 agencies to offer online services—such 4.4% as obtaining cadastral and non-encum- 12 3 brance certificates. Records going back over 20 years are available online. A notary prepares and executes the public 8 2 deed and typically handles the process of transferring the property on behalf of 4 1 the buying and selling parties. An elec- tronic system (called SISTER) allows a 0 0 notary to file for registration with the Tax 1 8 Authority (Agenzia dell’Entrate) and the Procedures Source: Doing Business database. Cadastre and Property Registry (Agenzia DOING BUSINESS TOPICS 11 FIGURE 5.3 regulated, with restrictions on entry as Procedures, time and cost to register property in Veneto well as on the activities that the notaries can perform. Legal fees in these coun- It 8 tries are on average 59% higher than in Nordic countries, where involvement of Padua a legal professional is not mandatory It Rome and the use of standard contracts is 4.6 widespread. There is no evidence that EU Average 5 61 It 4.5 4.4 higher levels of regulation and higher prices for conveyancing services lead to higher levels of service quality.3 The Netherlands provides an interesting case It 27 for reform. In 1999, it liberalized entry to the notary profession and their fees. 19 EU LOWEST NORWAY, 1 Notary intervention was still required, GLOBAL SWEDEN NEW ZEALAND, but the fees to transfer property dropped LOWEST SAUDI ARABIA, 2 SLOVAKIA 0.1 SWEDEN, SAUDI ARABIA 0.0 by as much as 30%, while the quality of THAILAND Time services improved and the security of Procedures Cost Days % of property value Source: Doing Business database. Number property rights was not affected.4 In the long run, Italy could consider allowing del Territorio) and pay all related fees. types of transactions. A summary of lawyers as well as other suitably qualified The system returns a receipt and registra- applicable official charges on property and licensed professionals to provide tion number almost immediately. Still, a transfer shared with Doing Business by conveyancing services. paper copy of the public deed must be a notary included 39 different scenarios presented to complete the record of the with different applicable fees and taxes. transfer in the land registry, which then Not surprisingly, this degree of complex- NOTES guarantees that the transfer is recognized ity may lead to different interpretations by third parties. by public officials. 1. Decree (D.L.223/2006, then Law 248/2006), which is the so-called “Bersani Italy’s Civil Code makes the notary Law.â€? public responsible for the veracity of WHAT TO REFORM? 2. Sentence 9878/2008 of the Corte di Cas- the information in the public deed. This sazione. additional legal security comes at a cost. SIMPLIFY AND LOWER TRANSFER 3. European Commission. 2007. Conveyanc- Notary fees can amount to € 4,600. The TAXES ing Services Market. Led by the Centre of liberalization of professional fees in 20061 Lowering fees is the easiest way to ease European Law and Politics (ZERP) at Bre- produced no effect on notary fees. Nota- property registration. A moderate re- men University. ries are considered to perform a public form would be to unify the different 4. Idem. function and therefore excluded from the transfer taxes and fees applicable for principle of competition that applies to different types of property transfer and other professions.2 Notaries continue to publish them. This would increase legal use the fee schedules established in the certainty by reducing the opportunities Ministerial Decree of 21 November 2001. for varying interpretations in the current At least, in smaller cities such as Padua, regime. Reforming the registration fees some competition among notaries keeps would require legislative changes at the the fees at the lower end of the fee sched- national level. ule. In addition, 2 registration taxes (the so-called imposta ipo-catastale) add up INTRODUCE COMPETITION IN THE to 4% of the property value. The system CONVEYANCING SERVICE MARKET is complex and different taxes and fees In Italy, notary involvement is required apply depending on the type of trans- to register the deed in the land regis- action. Legal experts such as notaries ter which makes the title have effect and lawyers acknowledge some degree towards third parties. As in other Eu- of uncertainty when assessing the ap- ropean countries with this Latin notary plicable regulations governing different system, the notary profession is highly 12 Getting FIGURE 6.1 How Veneto compares globally on getting credit credit Global ranking (1–181) 1 United Kingdom (EU BEST PRACTICE) EASIEST United States 20 Germany, Japan Canada, India 40 France 60 China 80 Italy 84, Brazil 100 Russia 120 Do women pay more for credit than men EU member countries lag behind. in Italy? The answer is yes, according Italy’s relatively low position is 140 to a recent study. The study found that driven by its weak protection of legal small female-owned firms are charged rights of lenders and borrowers based on 160 higher interest rates than those owned the Doing Business measure. Italy scores by men—even after controlling for other 3 out of 10 possible points in the legal 181 MOST DIFFICULT factors such as firm type and risk. In rights index (figure 6.2). This is the low- Note: Rankings are based on the sum of the strength of legal rights fact, businesses owned by women are est score found among the EU members. index and the depth of credit information index. See Data notes for details. statistically less likely to fail than male- The United Kingdom and Denmark have Source: Doing Business database. owned ones. One possible explanation the highest legal protections for borrow- is that the cost of credit is related to the ers and lenders. 4 or more private credit bureaus and 1 level of trust and higher levels of trust Italian law allows businesses to use public registry.2 Coverage of the private in Italy benefit men more than women.1 movable assets as collateral for loans credit bureaus reaches 75% of the adult Better regulations that protect the rights while keeping them in their possession population (figure 6.2). This coverage is of borrowers as well as lenders may help in certain cases, including after-acquired much more impressive than in France or bridge this gap. Readily available credit assets. But the law also requires a specific Spain, where coverage reaches less than information could help, too. description of the assets in the security a third or less than half, respectively. Doing Business measures two aspects agreement and does not permit a non- However, credit registries in Ireland, the of regulations that affect the availability possessory security right over the com- United Kingdom, Sweden and Germany of credit: the legal rights of borrowers bined assets of the company. No national cover almost 100% of the population. and lenders and the sharing of credit collateral registry exists; special registers Credit bureaus in Italy collect a lot information. First, the strength of legal are kept at local tribunals (where the of useful information. They gather infor- rights is measured by looking at the de- debtor is located). Secured creditors in mation from firms and individuals, store gree to which collateral and bankruptcy Italy have no priority over other claims up to 3 years of historical data, cover laws protect the rights of borrowers and such as unpaid taxes or wages if the small as well as big debts, distribute lenders and thus facilitate lending. Sec- borrower becomes insolvent. This may both positive and negative information, ond, the sharing of credit information make lenders less willing to grant loans and protect consumer rights by allow- is measured by looking at the coverage, in the first place. Similarly, out-of-court ing them to inspect their credit reports. scope, quality and accessibility of credit enforcements of secured rights cannot However, they do not include informa- information available through public and be agreed upon by the parties in security tion from trade creditors, retailers and private registries. In Italy, both credit agreements—exposing creditors to the utility companies. Countries like Austria, measures are determined at the national risk of lengthy court proceedings in the Germany, and the United Kingdom col- level, with regional variations and local case of a default. This also may discour- lect this information. As a result, Italy reforms rare to impossible. As a result, age lending. scores 5 out of 6 on the Doing Business data for Italy from Doing Business 2009 Access to credit information is a depth of credit information index. stands in for Veneto in this chapter. Italy brighter spot in Italy. Credit registries, Credit registries can greatly expand ranks 84th out of 181 economies on the the institutions that collect and distribute access to credit. By sharing credit in- ease of getting credit (figure 6.1). Only 3 credit information on borrowers, include formation, they help lenders assess risk DOING BUSINESS TOPICS 13 FIGURE 6.2 France and Denmark have done so in Credit information and legal rights for borrowers and lenders IRELAND, the last 4 years. When Slovakia allowed UNITED KINGDOM, 100 GLOBAL SINGAPORE, UNITED STATES, general descriptions, credit to the private HIGHEST MALAYSIA, SWEDEN HONG KONG, CHINA 10 sector jumped by 10%. More than 70% of Italy 9 (all regions) 74.9 new credit was secured by movables and EU HIGHEST DENMARK, 6 UNITED KINGDOM 24 ECONOMIES receivables. Italy (all regions) 5 ESTABLISH A UNIFIED CENTRALIZED EU Average 6.6 4.5 35.8 REGISTRY FOR MOVABLE COLLATERAL Creating a unified collateral registry en- ables creditors to notify others of their claim. France launched a nationwide on- Borrowers covered Italy 3 by credit registries line registry of movable collateral 2 years (all regions) % of adults ago. In Eastern Europe, 12 countries have 1 created unified registries of collateral rights over movable assets. Strength of legal Credit information rights index index 0–6 NOTES Source: Doing Business database. 0–10 1. Alesina, Alberto, Francesca Lotti, and Paolo Emilio Mistrulli. 2008. “Do Women more accurately and allocate credit more WHAT TO REFORM? Pay More for Credit? Evidence from Italy.â€? efficiently. Furthermore, registries can NBER Working Paper 14202. Cambridge, free entrepreneurs from having to rely EXPAND THE RANGE OF INFORMATION MA: National Bureau of Economic Re- on their personal connections alone for IN CREDIT REGISTRIES search. credit. In 2005, Italy introduced a code of To expand the range of information 2. The public registry at the Bank of Italy collects both positive and negative in- conduct for credit bureaus that stressed available in credit registries, they could formation from supervised financial the reliability and timeliness of credit include information on payments from institutions for loans above € 30,000 and reports, but cut the time that historical retailers and utility companies, such as negative information for loans of all sizes. data can be stored.3 As a member of the telephone and electricity providers. This 3. "Codice di deontologia e di buona condotta European Union, Italy has until 2010 to could allow potential borrowers who per i sistemi informativi gestiti da soggetti implement the EU Directive on credit have never had a loan or a credit card privati in tema di crediti al consumo, affidabilità e puntualità nei pagamenti." agreements for consumers that requires to build a credit profile. It is important Provvedimento del Garante n.8, published access to credit bureau databases in other to note that some countries allow this in the Gazzetta Ufficiale 23 dicembre member states. but only with written consent from the 2004, n. 300, and corrected version pub- Good credit information and laws consumers. This makes the data more lished in Gazzetta Ufficiale 9 marzo 2005, n. 56. that create and enforce collateral benefit difficult to collect. 4. Djankov, Simeon, Caralee McLiesh and lenders as well as borrowers. Borrowers Andrei Shleifer. 2007. Private Credit in benefit because credit opportunities in- ALLOW ALL TYPES OF ASSETS TO BE 129 Countries. Journal of Financial Eco- crease. Both credit registries and creditor USED AS COLLATERAL nomics 84 (2):299-329. protections through the legal system are Providing acceptable collateral is one of associated with higher private-credit-to- the most difficult challenges for small- GDP ratios. For example, an increase of 1 and medium-sized enterprises. Expand- point in the creditor’s right index is asso- ing the type of assets that can be used as ciated with a 6.5% increase in the average collateral and facilitating their registra- annual growth rate of the private-credit- tion reassures lenders, thus facilitating to-GDP ratio in the 3 years after the access to credit. The best international reform relative to the 3 years before.4 practice is to permit general descriptions in loan agreements, allowing the use of all types of assets as collateral—pres- ent and future, tangible and intangible. 14 Protecting FIGURE 7.1 How Italy compares globally on protecting investors investors Global ranking (1–181) 1 Ireland (EU BEST PRACTICE), EASIEST United States, Canada 20 United Kingdom Japan 40 India Italy 53 60 France, Brazil 80 Germany, China, Russia 100 120 Good protections for minority sharehold- The Doing Business investor protec- ers are associated with larger and more tion index puts a number to disclosure 140 active stock markets. Doing Business uses requirements of related-party transac- a standard case of self-dealing—the use tions, the extent of the obligations for 160 of corporate assets by company insiders company directors and access to evi- for personal gain—to measure investor dence by minority shareholders before 181 MOST DIFFICULT protections. Self-dealing is one of many and during the trial. Italy scores 7 out of Note: Rankings are based on the strength of investor protection corporate governance failures, but it is 10 in the extent of disclosure portion of index. See Data notes for details. Source: Doing Business database. also one of the most important. Other the index. According to the Italian Civil investor protections—such as the elec- Code, board of directors’ approval is tions of directors, disclosures of remu- required in case of related-party transac- directors in New Zealand or Singapore neration and rules on takeover bids—are tions. However, interested directors are pay the damages caused to a company not covered by this study but they are allowed to participate in approval pro- and disgorge any profit made from the also relevant for the development of well- cess. In contrast, approval requirements transaction. These countries also allow functioning stock markets. are more stringent in countries where shareholders to request the rescission Doing Business considers the case of related-party transactions are approved of prejudicial related-party transactions a company listed in a country’s most im- by shareholders with interested direc- in court. portant stock exchange. In Italy, related- tors excluded from the vote. The United To measure the ease of sharehold- party transactions are regulated by the Kingdom and France are 2 countries ers’ suits, Doing Business looks at the Civil Code and the regulations issued with such requirements. ease of compiling evidence by minority by the regulatory body of the securities On the extent of director liability, shareholders before and during a trial. market—Commissione Nazionale per le Italy scores a 4 out of a possible 10 points. On this measure, Italy achieves 6 of 10 Societá e la Borsa (CONSOB). Because Slovenia is the EU country with the high- points—ahead of Germany, France and these protections occur at a national est score—9 points—while France and Spain, but behind the United Kingdom level, no subnational variations exist in Bulgaria sit at the bottom with 1 point a and Poland. Before an insider-dealing the Doing Business indicator. As a result, piece. In Italy, shareholders owning 2.5% trial in Italy, minority shareholders are data for Italy from Doing Business 2009 of a company can sue directors involved allowed to request the appointment of an stands in for Veneto in this chapter. in harmful related-party transactions. inspector to investigate the activities of As a nation, Italy ranks 53rd out of Directors are only liable if shareholders the company. And during the trial, plain- 181 economies on the Doing Business prove that they were negligent while tiffs may access a wide range of evidence investor protection index (figure 7.1). approving the harmful related-party in possession of the opposing party. Among EU members, Italy shares the transaction. If directors are found liable, Greater investor protections are as- 10th position with Sweden and Finland. they have to pay the damages caused to sociated with more equity investment. Ireland and the United Kingdom lead the the company. In countries with stron- A study of private equity transactions EU ranking followed by recently added ger investor protections—such as New found that in countries with good inves- EU members such as Poland, Bulgaria Zealand or Singapore—directors have tor protections, 3 deals take place com- and Romania. Large EU countries like to comply with more stringent rules. pared to just 2 in countries with higher France and Germany lag behind. For example, if they are found liable, risk of expropriation.1 This tends to be DOING BUSINESS TOPICS 15 FIGURE 7.2 More investor protections associated with greater access for firms to equity markets and faster stock turnover Perceived difficulty in access to equity Turnover of stocks traded (%) Most 75 difficult 50 25 Least difficult 0 Least Most Least Most protection protection protection protection Economies ranked by Economies ranked by strength of investor protection index, quintiles strength of investor protection index, quintiles Note: Relationships remain significant at the 5% level when controlling for income per capita. Economies are ranked on the perceived difficulty in access to equity, with 131 being the most difficult. See Data notes for details. Source: Doing Business database; WEF (2007); World Bank, World Development Indicators database. reflected in the size of a country’s stock WHAT TO REFORM? NOTES exchange, with higher shares of market capitalization-to-GDP ratios (figure 7.2). MAKE DIRECTORS’ RESPONSIBILITIES 1. Lerner, Josh and Antoinette Schoar. 2005. AND DUTIES EXPLICIT “Does Legal Enforcement Affect Financial Across regions, the most popular Transactions? The Contractual Channel recent reform has been to require greater The law should require that directors exer- in Private Equity.â€? Quarterly Journal of disclosure of related-party transactions. cise appropriate diligence, care and loyalty Economics 120 (1): 223-46. The results of a 2002 global survey on when running a company. They should 2. World Bank. 2008. Doing Business 2009. corporate governance provide one ex- make informed decisions, avoid conflicts Washintgon, D.C. planation: approximately 90% of the of interest and always put the interest of 3. Commissione Nazionale per le Societá e la Borsa (CONSOB). investors surveyed want more transpar- the corporation before those of directors ency in the day-to-day management of or other individuals. In case of prejudi- companies. What do they mean by more cial related-party transactions, directors transparency? They want, for example, should pay any damages to a company unified accounting standards, immedi- and disgorge the profit made in violation ate disclosure of major transactions and of their duties to the corporation. more involvement of minority investors in major decisions and transactions.2 REQUIRE SHAREHOLDER APPROVAL Italy increased its disclosure re- FOR RELATED-PARTY TRANSACTIONS quirements in 2006. However, report- To better protect minority shareholders, ing of related-party transactions among large related-party transactions (repre- listed companies is scarce: on average, senting more than 5% of company’s as- only 17 cases are reported per year.3 In sets) should be approved in shareholders’ April 2008, the regulator of Italy’s securi- meetings. Moreover, interested directors ties market (CONSOB) opened to con- should not be allowed to vote at any stage sultation new draft guidelines that would of the approval process. enhance the transparency and investor protections for related-party transac- tions, applicable to companies listed in the stock exchange. 16 FIGURE 8.1 Paying How Veneto compares globally on paying taxes taxes Global ranking (1–181) 1 EASIEST Ireland (EU BEST PRACTICE) 20 United Kingdom Canada 40 United States 60 France 80 Germany 100 Japan 120 Taxes are vital for every economy. With- spend on tax compliance is substantially Rome 128 out them there would be no funds to pro- longer. At about 73%, Italy has the highest 140 China vide public infrastructure and essential total tax rate in the EU, where the average Padua 133 Russia services that help businesses and society is 46% (figure 8.2). In particular, labor 160 Brazil to be more productive and better off. Yet taxes amount to 43.2% of commercial India the ease of paying taxes varies substan- profits and corporate income taxes (IRES) 181 MOST DIFFICULT tially from country to country. In Swe- amount to 20.1%. Note: Rankings are the average of the economy rankings on the number of payments, time and total tax rate. den, entrepreneurs file a single online Of course, governments must im- See Data notes for details. form. In Romania, businesses make an pose taxes to finance public services, but Source: Doing Business database. average of 113 tax payments per year. high tax rates do not always lead to high Globally, Veneto (represented by revenues. Studies bear this out. Between fiscal regime—including a 20% flat tax Padua) would rank 133rd amongst 181 1982 and 1999, the average profit tax rate on cash-determined profits and excep- economies (figure 8.1). In Padua, a typi- worldwide fell from 46% to 33% of na- tion from personal income tax, IRAP cal medium-size company makes 15 pay- tional income, while profit tax collection and VAT. ments, pays 73.6% of its commercial rose from 2.1% to 2.4% of income.2 In Reducing corporate income tax profit1, and spends 351 hours per year fact, higher tax rates are associated with rates has been one of the most popular on tax compliance—including 266 hours lower levels of private investment, fewer reforms globally—among developed and for social security taxes and contribu- formal businesses per capita and lower developing countries. Since 2005, Doing tions, 48 hours for corporate income rates of business start-ups. A recent study Business has tracked more than 60 coun- taxes, and 37 for value added tax (VAT). finds that a 10% increase in the effective tries that have reduced corporate income Meanwhile, in Rome, the number of corporate tax rate reduces a country’s tax rates. Especially when accompanied payments is the same and total tax rate investment-to-GPD ratio by 2%.3 by an expansion of the tax base, lower tax is slightly lower at 73.3% of commercial Paying taxes in Veneto and else- rates tend to reduce the amount of tax profit. The difference in the total tax rate where in Italy has become easier in re- evasion in an economy. Many countries between Padua and Rome reflects differ- cent years. Today, several taxes can be have experienced increased tax revenues ent tax rates on real estate (ICI)—0.7% filed and paid electronically, including following a reduction of tax rates. Greece of cadastral value for Padua and 0.5% for corporate income taxes (IRES), regional saw its corporate tax revenue grow from Rome. In addition, accountants reported taxes on productive activities (IRAP), 4% of GPD to 5% after reducing the cor- a slightly shorter compliance time in social security contributions, VAT, prop- porate tax rate in 2005.6 Rome—334 hours per year. erty taxes and vehicle taxes. Italy has also Although the focus of tax reform is Within the EU, only Poland and recently lowered its corporate income tax often lowering rates, equally important Romania make paying taxes more bur- rates. Specifically, Italy’s budget law for for entrepreneurs is the administrative densome. Paying taxes is easiest in fiscal year 2008 reduces IRES rate from burden associated with tax compliance. Ireland—it takes only 9 payments, 76 33% to 27.5% and IRAP rate from 4.25% The economies that rank highly on the hours and the total tax rate amounts to to 3.9%.4 In addition, starting in 2008, ease of paying taxes indicator tend to just 28.8%. Although the 15 payments small companies with turnover below have lower tax rates, but also they have required in Italy is below the EU aver- € 30,000, limited capital expenses and no simple administrative procedures for age of 18, the time that companies must employees will enjoy a special, simplified paying taxes and filing returns. DOING BUSINESS TOPICS 17 FIGURE 8.2 and a book of received invoices. Meeting Number of payments, time and total tax rate in Veneto such stringent compliance requirements may strain company resources—espe- It 73.6 Padua 73.3 cially small- and medium-sized company 351 resources. The Italian government could It Rome It 334 consider exempting smaller business from these rules. On average, countries that require additional record-keeping EU Average 18 253 46.0 for tax compliance purposes also require It 15 37% more time to pay taxes than coun- tries that do not (figure 8.3). LUXEMBOURG 21.0 NOTES LUXEMBOURG 59 1. Commercial profits are net profits before VANUATU 8.4 all taxes borne—that is, the profits of the EU LOWEST SWEDEN 2 GLOBAL MALDIVES, QATAR 1 UNITED ARAB 12 company before taking into account any LOWEST 10 EMIRATES taxes that affect its income statement for Payments Time Total tax rate the year. Number per year Hours per year % of profit Source: Doing Business database. 2. Hines, James R., Jr. 2005. “Corporate Taxation and International Competition.â€? University of Michigan, Ross School of WHAT TO REFORM?7 However, consolidating existing tax and Business, Department of Accounting, social security laws in Italy would be Ann Arbor. CONSOLIDATE EXISTING TAX LAWS very beneficial for entrepreneurs and AND CLARIFY AMBIGUITIES 3. Djankov, Simeon, Tim Ganser, Caralee government officials who must navigate McLiesh, Rita Ramalho and Andrei Shle- Currently, Italian companies must refer through a myriad of different laws and ifer. 2008. The Effect of Corporate Taxes to several laws to understand their tax decrees at the moment. on Investment and Entrepreneurship. NBER Working Paper 13756. Cambridge, obligations. For example, labor taxes and MA: National Bureau of Economic Re- contributions are governed by 5 separate ELIMINATE MANDATORY TAX BOOKS search. statutes.8 In addition, changes in the tax FOR SMALL- AND MEDIUM-SIZED 4. These recent reforms are not reflected COMPANIES laws are frequent, which makes longer in the data, as the data presented in this term planning difficult for companies. Companies in Italy are obliged to main- report refers to the fiscal year 2007. The decrease of the tax rate will be reflected Complicated and ambiguous laws may tain 6 separate accounting books for in Doing Business 2010. For more infor- be harmful for governments. Studies tax compliance purposes—in addition to mation on methodology, please see the show that complex tax rules tend to de- their standard accounting books. The 6 Data notes section. crease tax revenues. Conversely, clear tax books relate to IRES, IRAP and VAT and 5. World Bank. 2008. Doing Business 2009. laws increase tax revenue by an average are as follows: a journal, a depreciable Washington, D.C. of 6%.9 This is a long-term reform, which assets book, a stocks accounting book, an 6. World Bank. 2007. Doing Business 2008. Washington, D.C. may need to be implemented gradually. inventory book, a book of issued invoices 7. It is beyond the scope of this report to FIGURE 8.3 provide recommendations regarding tax More complexity, more time paying taxes rates. Instead we focus on the recom- Time to comply with tax regulations (hours per year) mendations that would simplify tax Law is 397 Many laws 396 administration. ambiguous per tax Mandatory 385 forms for 8. These include: Italian Civil Code, Law record keeping no. 218 dated April 4, 1952, Presidential 1 tax, 328 Law is 309 clear 1 law Discretionary 282 Decree no. 818 dated April 26, 1957, Law forms for no. 355 dated August 8, 1995, Law De- record keeping cree no. 252 dated December 5, 2005. 9. World Bank, World Development Indica- tors database. 10. The global best practice for time to file, prepare and pay taxes excludes Maldives, where it is 0 hours. Ambiguity Redundancy Rigidity Source: Doing Business database. 18 Trading plete all procedures. In Rome, it would FIGURE 9.1 How Veneto compares globally on trading take 5 documents, 18 days and cost US$ across borders 1,305 (€ 1,004) (figure 9.2). Imports tend across to take slightly longer and cost more than Global ranking (1–181) 1 Denmark (EU BEST PRACTICE) exports in the EU. On average, EU coun- borders tries require approximately 5 documents, 12 days and cost US$ 1,000 (€ 770) to ex- EASIEST 20 Germany United States Japan port a container (figure 9.2). They require France 40 United Kingdom an average of 5 documents, 13 days, and Canada cost US $1,100 (€ 847) to import. 60 Padua 47 France requires just 2 documents China Rome 60 for cross-border trade, while in Italy it 80 requires 5 documents, which adds to the India 100 entrepreneur’s time and cost. France only Brazil requires the bill of lading and the cus- 120 Doing Business compiles procedural re- toms declaration. Italy requires the bill of quirements for trading a standard ship- lading, the certificate of origin, the com- 140 ment of goods by ocean transport. Every mercial invoice, the customs declaration, procedure and the associated documents, and for certain products the export or 160 Russia time and cost, for importing and export- import license. France eliminated filing ing the goods is recorded, starting with or sending the customs declaration and 181 MOST DIFFICULT the contractual agreement between the replaced it with the electronic declara- Note: Rankings are the average of the country rankings on the two parties and ending with delivery of tion which only requires the 2 above- documents, time and cost required to import and export. See Data notes for details. the goods. mentioned documents. Source: Doing Business database. The procedures required to export In Veneto, it takes 4 days longer or import a container vary globally. Of to export than in other EU countries of exports and a 10.4% share of imports the 181 economies examined by Doing on average, and it takes 2 days longer for Italy in 2007. As one report puts it: Business, it is easiest to export or import to import. The reason for this is that Production in the region is characterized a container in Singapore, while Padua more than 50% of the total export and by a high number of small and medium- which represents Veneto ranks 47th and import time is spent on collecting all sized enterprises (SMEs). SMEs play an Rome ranks 60th (figure 9.1). It is sig- required trade documents. The impor- important role as an engine for the re- nificantly easier to trade across borders tance of spending less time on trade is gion's economy and contribute to eco- in Italy’s neighboring countries—such as emphasized by a study that shows that nomic growth as they take over 70% of Austria which ranks 19th, France (22nd) “each additional day that a product is the added value of the Veneto industry. and Switzerland (39th). Meanwhile, it is delayed prior to being shipped reduces Within Veneto, the provinces of Treviso more difficult to cross-border trade in trade by more than 1%. Put differently, and Vicenza are home to the largest Slovenia, which ranks 78th. each day is equivalent to a country dis- number of exporters, while Verona and If you exported a container of ap- tancing itself from its trade partners by Vicenza house the largest number of parel from Padua through the port of about 70 km on average. Delays have importers.2 Venice, it would take 5 documents, 16 an even greater impact on exports of Exporting or importing into Veneto days and cost US$ 1,204 (€ 927) (figure time-sensitive goods, such as perishable cost an additional US$ 600 (€ 462) than 9.2). To do the same in Rome, it would agricultural products. For these, an extra in Finland where it costs on average US$ take 5 documents, 20 days and cost day of delay reduces trade volumes by 535 (€ 412). A competitive cost is good US$ 1,305 (€ 1,004). Meanwhile, look- 3.5 percent.â€?1 for business because clients seek the best ing at the EU’s best-practice examples, Thus, moving cargo quickly through service with the lowest possible price. exporting a container requires only 2 a port terminal, customs, and putting it The lower cost in Denmark is due to sev- documents in France, takes 5 days in on the road to the client, is important eral factors—including fewer documents Estonia and costs just US$ 485 (€ 381) for the livelihood of companies. This is and their related costs, reduced costs for in Finland. especially true for Veneto as one of the port and terminal handling and more ef- If you imported a 20-foot container most trade-oriented and industrialized ficient transportation. to a warehouse in Padua through the port regions in Italy. In fact, Veneto is the Some highly successful improve- of Venice, it would take 5 documents, 15 second most important economic region ments that have been carried out over days and cost US$ 1,201 (€ 924) to com- in Italy for trade—with a 13.3% share the years have been, inter alia, the im- DOING BUSINESS TOPICS 19 FIGURE 9.2 Documents, time and cost to trade across borders in Veneto It 20 It 18 Padua It Rome It 1,305 16 15 It 1,305 1,204 1,201 EU EU Average It 5 12 1,053 Average It 5 13 1,112 Exporting Importing EU LOWEST EU LOWEST FRANCE 2 DENMARK, 5 FRANCE 2 DENMARK 5 GLOBAL ESTONIA, GLOBAL LOWEST SINGAPORE LOWEST SINGAPORE 3 FINLAND 575 FINLAND 495 MALAYSIA 450 SINGAPORE 439 Documents Time Cost Documents Time Cost Number Days US$ per container Number Days US$ per container Source: Doing Business database. plementation of risk management, the cally friendly intermodal transportation NOTES introduction of Electronic Data Inter- system. They recently added to Veneto’s 1. Djankov, Simeon, Caroline Freund and Cong Pham. 2006. “Trading on Time.â€? change (EDI), the implementation of the infrastructure by building a highway— Review of Economics and Statistics (forth- electronic signature, the construction of the so-called “Passante di Mestreâ€?—to coming). the “Passante di Mestreâ€? highway and the divert beltway traffic heading anywhere 2. Regione del Veneto. improvement to the port infrastructure. else but Venice. 3. Port authority of Venice; port authority of Firstly, inspections are carried out Lastly, Venice is the third largest Naples. only on about 5-10% of all containers. As port in Northern Italy, handling almost a result, clearing goods through customs 10% of all port traffic in Italy. It handled requires only a few hours of an entrepre- over 329,000 TEUs in 2007, compared neur’s time, on average. In 2005, Italian to over 460,000 TEUs in the port of Na- customs implemented new software to ples—the largest in all of Italy. Both ports ease the submissions of documentation have made investments to improve their and the clearing of goods. “It is much efficiency and infrastructure in the re- faster than it used to be,â€? comments cent years and both continue to maintain one entrepreneur.“What really made an and develop their port terminal areas.3 enormous impact on our business was the introduction of the electronic sig- WHAT TO REFORM? nature,â€? he explains. “Instead of having hardcopies of documents with our sig- CUT THE NUMBER OF DOCUMENTS, AND SIMPLIFY PROCEDURES nature, we use an electronic signature to complete the document procedures.â€? If Italian traders spent less time collect- Furthermore, the relatively short ing documents, they could make their distance from Padua to the port of Ven- businesses more efficient and profitable. ice facilitates the transportation of a con- This would benefit the economy as a tainer and limits its obstacles. Although whole. The time required could be di- traffic may be bottlenecked at Mestre, an minished by reducing the number of extra lane for trucks ensures that slow documents needed to ship containerized moving traffic does not hinder the fast- goods. As mentioned above, EU’s best moving traffic. In fact, in recent years, practice is in France which requires only local authorities have further increased 2 documents—the bill of lading and cus- efforts to create an efficient and ecologi- toms declaration—to import or export. 20 Enforcing FIGURE 10.1 How Veneto compares globally on enforcing contracts contracts Global ranking (1–181) 1 Luxembourg (EU BEST PRACTICE) EASIEST United States 20 Germany France China, Russia 40 Japan United Kingdom 60 Canada 80 100 Brazil 120 The primary role of the judiciary is to typically within 1.5 years (figure 10.2). enhance justice, fairness and equity. But Courts serve businesses best when 140 efficient courts do more—they help the they are fast, affordable and fair. In the Padua 156 economy grow. Doing Business tracks absence of efficient courts, firms un- 160 Rome 156 the efficiency of the judiciary in resolv- dertake fewer investment and business ing a commercial dispute by following transactions. They prefer to rely only on 181 MOST India DIFFICULT the step-by-step evolution of the dispute a small group of business partners who Note: Rankings are the average of the economy rankings before local courts. know each other from previous dealings. on the procedures, time and cost to resolve a commercial dispute through the courts. See Data notes for details. Worldwide, Doing Business has Studies on the effects of reforms find that Source: Doing Business database. found that resolving a commercial dis- when contracts can be enforced quickly pute is easiest in Hong Kong (China), and cheaply, small businesses get better of hearings and deeds to be filed by the where it takes just 7 months and costs financial terms on loans.2 Other research parties. The amended rules have also 14.5% of the value of the debt in dispute. finds that new technologies are adopted modified other aspects of the Italian Civil Within Italy, not everyone bringing a faster when courts are efficient.3 Effi- Procedure—such as the discipline of ad commercial dispute to court can expect ciency of the court system is also one of interim measures, enforcement proce- similar efficiency. In Padua, concluding the main concerns of foreign investors. dures, the Supreme Court proceedings a typical commercial case takes 41 pro- The issue of exceptionally long du- and arbitration rules. However, these cedural steps, lasts approximately 1,808 ration of dispute resolution in Italy has changes have not yet significantly re- days and costs 27.3% of the value of the come to the attention of the European duced the time to resolve a commercial claim.1 Enforcing contracts is slightly Court of Human Rights in Strasbourg, dispute. more expensive in Rome (29.9% of the which establishes in Article 6 of the Another promising development is value of the debt in dispute) but it also European Convention on Human Rights the introduction of On-line Civil Trial takes less time (approximately 1,210 that it is unacceptable for civil cases to (Processo Civile Telematico).6 Padua has days, on average). Globally, Veneto (rep- take more than 3 years. The Italian jus- been selected as one of the pilot cities to resented by Padua) would rank 156th out tice system responded with the Law No. adopt the new electronic system. It was of 181 economies on the efficiency of the 89 of 24 March 2001 (the so-called “Pinto designed to allow the electronic filing of court system—ex-aequo with Rome and Actâ€?) which introduced the possibility cases and to facilitate case monitoring last in the EU (figure 10.1). The reason of lodging a complaint with the Ital- and management by the court staff. Once for Veneto’s relatively weak performance ian courts in respect to excessively long fully implemented, the system should be in the rankings is the extraordinarily proceedings. These types of complaints an important time-saving tool for both long duration of court proceedings and continue to increase across Italy—from lawyers and judges. debt enforcement. In Padua, it takes 5,000 in 2003 to over 20,000 in 20064 on average 30 days to file the case, an- —and are a very costly by-product of the other 1,406 days to conclude the trial inefficiencies of the judicial system. and judgment stages and another 372 Some steps to improve the efficiency to enforce the judgment. Elsewhere in of the Italian court system are underway. the EU, a commercial dispute is resolved Italy reformed its Code of Civil Proce- more than 3 times faster than in Padua— dure in 20055 by reducing the number DOING BUSINESS TOPICS 21 FIGURE 10.2 Procedures, time and cost to enforce a contract in Veneto 1,808 Padua It Rome It 41 It 1,210 It 29.9 27.3 EU Average 31 541 19.8 LITHUANIA 210 SINGAPORE 150 EU LOWEST LUXEMBOURG 8.8 IRELAND 20 GLOBAL LOWEST BHUTAN 0.1 Procedures Time Cost Number Days % of claim Source: Doing Business database. WHAT TO REFORM? lawyers in civil litigation and enforce- NOTES ment proceedings now go through an ELIMINATE CASE BACKLOG electronic data channel operated by the 1. The time and cost of dispute resolution AND REDUCE COURT DELAYS refer to filing, trial and debt enforcement. Ministry of Justice. Judgments are de- BY EMPOWERING JUDGES 2. Quian, Jun, and Philip Strahan. 2006. livered by e-mail rather than by the old “How Laws and Institutions Shape Finan- One of the plagues of Italian courts is the hard-copy notification process. Other cial Contracts.â€? Wharton Financial Insti- backlog of old cases. The courts of Turin countries with well-functioning elec- tutions Center, Philadelphia. provide an excellent example of how tronic case management systems include 3. Cooley, Thomas, Ramon Marimon and backlogs can be tackled. Turin’s reform Australia, Denmark, Finland, the Neth- Vincenzo Quadrini. 2004. “Aggregate started in 2001 when cases that had not erlands, Norway and Portugal. Consequences of Limited Contract En- forceability.â€? Journal of Political Economy been resolved for 3 or more years were 112 (4): 817-47. identified. The courts then issued guide- ENCOURAGE ALTERNATIVE METHODS 4. Corriere della Sera. “Gustizia, debiti re- lines with practical advice for judges on OF DISPUTE RESOLUTION cord.â€? 15 Dicembre 2007. how to expedite trials. The guidelines Today, the courts are inundated with cases 5. Decree of March 14, 2005, enacted as of transformed judges into managers of the of minor monetary value. Mediation ser- March 1, 2006. process and created a culture of effi- vices provided by the Chamber of Com- 6. www.processotelematico.giustizia.it ciency. As a result, the backlog of cases merce—the so-called “Conciliazioneâ€?9— 7. Barbuto, Mario. 2008.The "Strasbourg was reduced by 27% between 2001 and could handle small business disputes to Programme" for reducing backlogs and accelerating the processing of civil cases 2006.7 New case efficiency has improved, lighten their burden on the court system. in the Turin Court. European Commis- too. Today, 66% of all civil cases brought In fact, mediation could save money as sion for the Efficiency of Justice. Newslet- before the court of Turin are concluded in well as time. Although there has been ter No 3; July. less then 1 year, and 93% within 3 years.8 a steady and significant increase of the 8. Abravanel, Roger. 2008. Meritocrazia. number of mediations conducted at the Garzanti Libri. IMPLEMENT AN ELECTRONIC CASE Chamber of Commerce in Padua (from 9. www.conciliazione.camcom.it MANAGEMENT SYSTEM 16 in 2003 to 182 in 2007), the volume of The on-line civil trial project is very cases is still very low compared to where promising and efforts should be made it could be. More companies should be to fully implement it as soon as possible. made aware of this alternative to lengthy Introducing electronic case management court proceedings and encouraged to is one of the most popular reforms of opt for it whenever possible. Of course, the court system amongst middle- and cases with substantial money at stake high-income countries. Austria provides can continue to use formal arbitration a successful example. All filings from procedures. 22 FIGURE 11.1 Closing How Veneto compares globally on closing a business a business Global ranking (1–181) 1 Japan EASIEST Canada Finland (EU BEST PRACTICE) 20 United Kingdom United States Padua 26 40 Rome 27 Germany 60 France China 80 Russia 100 120 In medieval Padua, insolvent debtors in France.1 This is not surprising, given Brazil were punished severely: following a hu- that it takes only a year to finish the in- 140 India miliating ritual at the Palazzo della Ra- solvency process in London, 13 months gione, they were permanently banished in Amsterdam, 15 months in Berlin, but 160 from the city. Today, debtors in financial almost 2 years in Paris. distress and their creditors can turn to Good bankruptcy laws achieve 181 MOST DIFFICULT courts to resolve the situation. Globally, three main goals. They seek to reha- Note: Rankings are based on the recovery rate: how many cents Veneto (represented by Padua) ranks bilitate viable businesses and liquidate on the dollar claimants (creditors, tax authorities and employees) recover from the insolvent firm. See Data notes for details. 26th, and 11th within the EU (figure unviable ones. They aim to maximize the Source: Doing Business database. 11.1). In Padua, recovering a debt from value received by creditors, sharehold- a bankrupt company takes on average 2 ers, employees and other stakeholders 2007 and adopted on January 1, 2008. years and costs about 15% of the value by requiring that businesses be turned The emphasis shifted from punishing of the estate (figure 11.2). Overall, credi- around, sold as a going concern or liqui- the debtor to restructuring viable busi- tors can expect to recover about 61 cents dated—whichever generates the greatest nesses and maximizing creditors’ recov- on every dollar borrowed. In Rome, the total value. And they establish a system ery. The new legal framework is aimed process tends to be slightly faster (aver- for clearly ranking creditors. Countries at creating a process similar to Chapter aging 1 year and 10 months), but also with laws meeting these 3 objectives 11 in the United States, transferring the more expensive (22% of the value of achieve a higher recovery rate than coun- focus of proceedings from liquidation to the estate), allowing creditors in Rome tries without such laws. corporate reorganization and restructur- to recover about 57 cents on every dol- Reforming a bankruptcy system can ing. The laws gave distressed firms tools lar borrowed. While the performance of be very challenging. If banks cannot to overcome the crisis, either through both Padua and Rome is slightly ahead protect their credit, they lend less—and out-of-court agreements or through a of the EU average of 56 cents recovered at a higher rate. On the other hand, if formal rescue procedure (concordato on the dollar, the Italian cities lag behind entrepreneurs believe that the law em- preventivo)—a settlement between the top performers in this area. For example, powers creditors to push a company debtor and creditors requiring court ap- in Japan, creditors are likely to recover into insolvency, they will be reluctant proval. The reform achieved 6 goals.3 92.5 cents on the dollar, and in Finland— to start new businesses. Italy has intro- First, it redefined the scope of bank- where the recovery rates are highest in duced gradual reforms of its bankruptcy ruptcy proceedings, moving from pun- the EU—87.3 cents. system since 2003. The need for a reform ishing debtors to satisfying creditors. Efficient bankruptcy regulations im- was dire—the Italian bankruptcy law Second, it expanded the role and scope prove access to credit. Where insolvency was over 60 years old at that time—but it of a creditors’ committee. Third, it modi- laws are more effective, creditors—con- was the corporate scandals that provided fied the rules on executory contracts in fident that they will be able to collect on an immediate stimulus for reforms. The bankruptcy. Fourth, it allowed the bank- loans—are more likely to lend. Recent legal framework for bankruptcy in Italy rupt business’ operations to continue studies in Europe find that actual returns was revised gradually through adopt- as a going concern. Fifth, it introduced to creditors are 92% of the value of the ing various laws and decrees, including discharge from unpaid debt for natural loan in the United Kingdom, 80% in the Law 347 of 2003, the so-called “Marzano persons. Sixth, it simplified the process Netherlands, 67% in Germany and 56% Lawâ€?2, and Law 169 passed in September of liquidating the assets and distributing DOING BUSINESS TOPICS 23 FIGURE 11.2 Time, cost and recovery rate to close a business in Veneto JAPAN 92.5 GLOBAL HIGHEST Padua FINLAND 87.3 EU HIGHEST It 22.0 It Rome 14.5 60.9 2.1 56.6 EU Average 10.7 It 56.0 2.0 It 1.8 BELGIUM, 3.5 NETHERLANDS EU LOWEST NORWAY, 1.0 IRELAND 0.4 SINGAPORE GLOBAL LOWEST Time Cost Recovery rate Years % of estate Cents on the dollar Source: Doing Business database. the proceeds of that liquidation among to find out how much is left to repay NOTES the creditors. This framework strength- creditors. If the results of the inventory ened creditors’ rights, stimulating the show that there is nothing for creditors 1. Davydenko, Sergei, and Julian Franks. flow of credit to small- and medium- to recover, and such a report is not ques- 2008. “Do Bankruptcy Codes Matter? A Study of Defaults in France, Germany, sized firms. As a result of the reforms, tioned by them, the courts should have and the UK.â€? Journal of Finance 63 (2): the recovery rate has almost doubled the power to terminate the proceedings. 565-605; and de Jong, Abe, and Oscar from the 38 cents per euro owed, as esti- Currently, such a decision can only be Couwenberg. 2007. “Costs and Recovery mated by the Italian Bankers Association made upon request of the trustee and Rates in the Dutch Liquidation-Based Bankruptcy System.â€? Working paper, Fac- in 2002. the creditors’ committee, which typically ulty of Law, University of Groningen. In addition to the improvements decide to continue with the liquidation 2. Named after Antonio Marzano, the Italian of the Italian bankruptcy laws, parties proceeding regardless of the results of Minister for Productive Activities (2001- involved in bankruptcy proceedings in the inventory. However, if the courts 2005). Padua now benefit from a new website were given the power to stop the liquida- 3. Beye, Mema and Joanna Nasr. 2008. “Re- run by the Court of Padua (www.fal- tion proceeding, the main stakeholders paying Creditors Without Imprisoning Debtors.â€? In World Bank. 2008. Celebrat- limentipadova.com). The website allows (creditors and trustees) should still be al- ing Reform 2008. Washington, D.C. World all interested parties (citizens, creditors, lowed to appeal this decision—in a fast- Bank and U.S. Agency for International bankruptcy trustees, and judges) to ac- track procedure—in order to properly Development. cess data on current bankruptcy pro- safeguard the interests of creditors. ceedings and monitor their progress. Although this reform may not have an immediate impact on Doing Busi- WHAT TO REFORM? ness indicators, allowing the courts to stop liquidation proceedings that are not GIVE COURTS THE POWER TO STOP going to yield any benefit to the credi- LIQUIDATION PROCEEDINGS IN CASES tors should improve the overall efficiency WHERE THERE ARE NO ASSETS LEFT FOR CREDITORS TO RECOVER of the courts in Padua and reduce the costs incurred in bankruptcy proceed- Today the courts of Padua are flooded ings. First, it would save creditors legal with cases where there is little to nothing expenses. Second, it would reduce the for the creditors to recover. When liqui- backlog of bankruptcy cases in the court dation proceedings start (as a result of system. filing a new liquidation procedure or as a result of an unsuccessful reorganization), the trustee inventories a debtor’s assets 24 ECONOMY CHARACTERISTICS Data notes GROSS NATIONAL INCOME (GNI) PER CAPITA Doing Business in Veneto 2009 reports 2007 income per capita and population as published in the World Bank’s World Development Indicators 2008. Income is calculated using the Atlas method (current US $). For cost indicators expressed as a percentage of income per capita, 2007 GNI in local currency units is used as the denominator. Italy's GNI per capita in 2007 = US $ 33,540 EXCHANGE RATE The exchange rate used in this report is US $ 1 = € 0.77 REGION AND INCOME GROUP Doing Business uses the World Bank regional and income group classifications, available at http://www.worldbank.org/data/countryclass. The indicators presented and analyzed in or advising on legal and regulatory require- the Veneto region refer to the city of Padua. Doing Business in Veneto 2009 measure ments. These experts have several rounds of Second, the data often focus on a specific business regulation and the protection of interaction with the Doing Business team, business form—generally a limited liability property rights—and their effect on busi- involving conference calls, written correspon- company (or its legal equivalent) of a specified nesses, especially small and medium-size do- dence and visits by the team. For Doing size—and may not be representative of the mestic firms. First, the indicators document Business in Veneto 2009 the team members regulation on other businesses, for example, the degree of regulation, such as the number visited Padua twice to verify data and recruit sole proprietorships. Third, transactions de- of procedures to start a business or to register respondents and had multiple interactions scribed in a standardized case scenario refer to and transfer commercial property. Second, with them either directly or through Centro a specific set of issues and may not represent they gauge regulatory outcomes, such as the Studi at Unioncamere del Veneto. The team the full set of issues a business encounters. time and cost to enforce a contract, go through also invited local government officials and Fourth, the measures of time involve an ele- bankruptcy or trade across borders. Third, judges to review the preliminary results and ment of judgment by the expert respondents. they measure the extent of legal protections offered them a right of reply period. The data When sources indicate different estimates, of property, for example, the protections of from surveys are subjected to numerous tests the time indicators reported in Doing Busi- investors against looting by company direc- for robustness, which lead to revisions or ex- ness represent the median values of several tors or the range of assets that can be used as pansions of the information collected. responses given under the assumptions of the collateral according to secured transactions The Doing Business methodology offers standardized case. laws. Fourth, they measure the flexibility of several advantages. It is transparent, using Finally, the methodology assumes that employment regulation. Finally, a set of in- factual information about what laws and regu- a business has full information on what is dicators documents the tax burden on busi- lations say and allowing multiple interactions required and does not waste time when com- nesses. For details on how the rankings on with local respondents to clarify potential pleting procedures. In practice, completing these indicators are constructed, see Ease of misinterpretations of questions. Having rep- a procedure may take longer if the busi- Doing Business. resentative samples of respondents is not an ness lacks information or is unable to follow The data for all sets of indicators in issue, as the texts of the relevant laws and reg- up promptly. Alternatively, the business may Doing Business in Veneto 2009 are for June ulations are collected and answers checked for choose to disregard some burdensome pro- 2008, except for Rome, which was updated as accuracy. The methodology is inexpensive and cedures. For both reasons the time delays of December 2008. The data for paying taxes easily replicable, so data can be collected in a reported in Doing Business in Veneto 2009 refer to January–December 2007. large sample of economies. Because standard could differ from the perceptions of entrepre- assumptions are used in the data collection, neurs reported in the World Bank Enterprise METHODOLOGY comparisons and benchmarks are valid across Surveys or other perception surveys. The Doing Business data are collected in a economies. Finally, the data not only highlight standardized way. To start, the Doing Busi- the extent of specific regulatory obstacles to DATA CHALLENGES AND REVISIONS ness team, with academic advisers, designs a Doing Business but also identify their source Most laws and regulations underlying the survey. The survey uses a simple business case and point to what might be reformed. Doing Business data are available on the Doing to ensure comparability across economies and Business website at http://www.doingbusiness. over time—with assumptions about the legal LIMITS TO WHAT IS MEASURED org. All the sample surveys and the details form of the business, its size, its location The Doing Business methodology has 5 limi- underlying the indicators are also published and the nature of its operations. Surveys are tations that should be considered when inter- on the website. Questions on the methodol- administered through more than 6,700 local preting the data. First, the collected data in ogy and challenges to data can be submitted experts worldwide and 80 in Veneto, including Doing Business 2009 refer to businesses in through the website’s “Ask a Questionâ€? func- lawyers, business consultants, accountants, the economy’s largest business city and may tion at http://www.doingbusiness.org. freight forwarders, government officials and not be representative of regulation in other Doing Business publishes 8,900 indica- other professionals routinely administering parts of the economy. The data collected for tors each year. To create these indicators, DATA NOTES 25 the team measures more than 52,000 data or sale to the public of products or Only procedures required of all busi- points, each of which is made available on services. The business does not perform nesses are covered. Industry-specific proce- the Doing Business website. Data time series foreign trade activities and does not dures are excluded. For example, procedures for each indicator and economy are available handle products subject to a special tax to comply with environmental regulations regime, for example, liquor or tobacco. on the website, beginning with the first year are included only when they apply to all It is not using heavily polluting produc- the indicator or economy was included in the tion processes. businesses conducting general commercial report. To provide a comparable time series or industrial activities. Procedures that the r -FBTFTUIFDPNNFSDJBMQMBOUBOEPÄ“DFT for research, the data set is back-calculated and is not a proprietor of real estate. company undergoes to connect to electricity, to adjust for changes in methodology and any water, gas and waste disposal services are not r %PFTOPURVBMJGZGPSJOWFTUNFOUJODFO- revisions in data due to corrections. The web- tives or any special benefits. included. site also makes available all original data sets r )BTBUMFBTUBOEVQUPFNQMPZFFT TIME used for background papers. The correction 1 month after the commencement of rate between Doing Business 2008 and Doing operations, all of them nationals. Time is recorded in calendar days. The mea- Business 2009 was 6%. r )BTBUVSOPWFSPGBUMFBTUUJNFT sure captures the median duration that incor- income per capita. poration lawyers indicate is necessary to com- r )BTBDPNQBOZEFFEQBHFTMPOH plete a procedure with minimum follow-up STARTING A BUSINESS with government agencies and no extra pay- PROCEDURES ments. It is assumed that the minimum time Doing Business records all procedures that A procedure is defined as any interaction of required for each procedure is 1 day. Although are officially required for an entrepreneur to the company founders with external parties procedures may take place simultaneously, start up and formally operate an industrial or (for example, government agencies, lawyers, they cannot start on the same day (that is, commercial business. These include obtain- auditors or notaries). Interactions between simultaneous procedures start on consecutive ing all necessary licenses and permits and company founders or company officers and days). A procedure is considered completed completing any required notifications, verifi- employees are not counted as procedures. once the company has received the final docu- cations or inscriptions for the company and Procedures that must be completed in the ment, such as the company registration cer- employees with relevant authorities. same building but in different offices are tificate or tax number. If a procedure can be After a study of laws, regulations and counted as separate procedures. If founders accelerated for an additional cost, the fastest publicly available information on business have to visit the same office several times procedure is chosen. It is assumed that the entry, a detailed list of procedures is de- for different sequential procedures, each is entrepreneur does not waste time and com- veloped, along with the time and cost of counted separately. The founders are assumed mits to completing each remaining procedure complying with each procedure under nor- to complete all procedures themselves, with- without delay. The time that the entrepreneur mal circumstances and the paid-in minimum out middlemen, facilitators, accountants or spends on gathering information is ignored. It capital requirements. Subsequently, local in- lawyers, unless the use of such a third party is assumed that the entrepreneur is aware of corporation lawyers and government officials is mandated by law. If the services of profes- all entry regulations and their sequence from complete and verify the data. sionals are required, procedures conducted by the beginning but has had no prior contact Information is also collected on the se- such professionals on behalf of the company with any of the officials. quence in which procedures are to be com- are counted separately. Each electronic pro- pleted and whether procedures may be carried cedure is counted separately. If 2 procedures COST out simultaneously. It is assumed that any can be completed through the same website Cost is recorded as a percentage of the econo- required information is readily available and but require separate filings, they are counted my’s income per capita. It includes all official that all agencies involved in the start-up pro- as 2 procedures. fees and fees for legal or professional services cess function without corruption. If answers Both pre- and postincorporation pro- if such services are required by law. Fees for by local experts differ, inquiries continue until cedures that are officially required for an purchasing and legalizing company books are the data are reconciled. entrepreneur to formally operate a business included if these transactions are required by To make the data comparable across are recorded. law. The company law, the commercial code economies, several assumptions about the Procedures required for official cor- and specific regulations and fee schedules are business and the procedures are used. respondence or transactions with public used as sources for calculating costs. In the agencies are also included. For example, absence of fee schedules, a government of- ASSUMPTIONS ABOUT THE BUSINESS if a company seal or stamp is required ficer’s estimate is taken as an official source. In The business: on official documents, such as tax dec- the absence of a government officer’s estimate, r *TBMJNJUFEMJBCJMJUZDPNQBOZ società a larations, obtaining the seal or stamp is estimates of incorporation lawyers are used. responsabilità limitata, srl). counted. Similarly, if a company must open If several incorporation lawyers provide dif- r 0QFSBUFTJOUIFFDPOPNZTTFMFDUFEDJUZ a bank account before registering for sales ferent estimates, the median reported value is r *TEPNFTUJDBMMZPXOFEBOEIBT tax or value added tax, this transaction applied. In all cases the cost excludes bribes. owners, none of whom is a legal entity. is included as a procedure. Shortcuts are counted only if they fulfill 4 criteria: they PAID-IN MINIMUM CAPITAL r )BTTUBSUVQDBQJUBMPGUJNFTJODPNF per capita at the end of 2007, paid in are legal, they are available to the general The paid-in minimum capital requirement re- cash. public, they are used by the majority of flects the amount that the entrepreneur needs r 1FSGPSNTHFOFSBMJOEVTUSJBMPSDPNNFS- companies, and avoiding them causes sub- to deposit in a bank or with a notary before cial activities, such as the production stantial delays. registration and up to 3 months following in- 26 DOING BUSINESS IN VENE TO 2009 corporation and is recorded as a percentage of ASSUMPTIONS ABOUT THE r )BTDPNQMFUFBSDIJUFDUVSBMBOE the economy’s income per capita. The amount CONSTRUCTION COMPANY technical plans prepared by a licensed is typically specified in the commercial code The business (BuildCo): architect. or the company law. Many economies have r *TBMJNJUFEMJBCJMJUZDPNQBOZ r 8JMMJODMVEFBMMUFDIOJDBMFRVJQNFOU a minimum capital requirement but allow required to make the warehouse fully r 0QFSBUFTJOUIFFDPOPNZTTFMFDUFEDJUZ businesses to pay only a part of it before operational. r *TEPNFTUJDBMMZBOEQSJWBUFMZ registration, with the rest to be paid after the r 8JMMUBLFXFFLTUPDPOTUSVDU FYDMVE- owned. first year of operation. In Italy in June 2008, ing all delays due to administrative and r )BTPXOFST OPOFPGXIPNJTBMFHBM regulatory requirements). the minimum capital requirement for limited entity. liability companies was €10,000, of which at r *TGVMMZMJDFOTFEBOEJOTVSFEUPDBSSZ ASSUMPTIONS ABOUT THE UTILITY least €2,500 was payable before registration. out construction projects, such as CONNECTIONS The paid-in minimum capital recorded for building warehouses. The electricity connection: Italy is therefore €2,500, or 9.7% of income r )BTCVJMEFSTBOEPUIFSFNQMPZFFT  r *TNFUFST GFFU JODIFT GSPN per capita. all of them nationals with the technical the main electricity network. expertise and professional experi- r *TBNFEJVNUFOTJPO QIBTF XJSF ence necessary to obtain construction Y, 140-kVA connection. Three-phase The data details on starting a business can be permits and approvals. service is available in the construction found for each economy at http://www.doing- r )BTBUMFBTUFNQMPZFFXIPJTBMJ- area. business.org. This methodology was developed censed architect and registered with the r 8JMMCFEFMJWFSFECZBOPWFSIFBE in Djankov,Simeon, Rafael La Porta, Florencio local association of architects. service, unless overhead service is not López-de-Silanes and Andrei Shleifer. 2002. r )BTQBJEBMMUBYFTBOEUBLFOPVUBMM available in the periurban area. “The Regulation of Entry.â€? Quarterly Journal of necessary insurance applicable to its r $POTJTUTPGBTJNQMFIPPLVQVOMFTT Economics 117 (1): 1–37; and is adopted here general business activity (for example, installation of a private substation accidental insurance for construction (transformer) or extension of network with minor changes. workers and third-person liability is required. DEALING WITH CONSTRUCTION PERMITS insurance). r 3FRVJSFTUIFJOTUBMMBUJPOPGPOMZPOF r 0XOTUIFMBOEPOXIJDIUIFXBSFIPVTF electricity meter. Doing Business records all procedures re- is built. quired for a business in the construction r #VJME$PJTBTTVNFEUPIBWFBMJDFOTFE electrician on its team to complete the industry to build a standardized warehouse. ASSUMPTIONS ABOUT THE WAREHOUSE internal wiring for the warehouse. These procedures include submitting all rele- r Ñ®FXBUFSBOETFXFSBHFDPOOFDUJPO vant project-specific documents (for example, The warehouse: building plans and site maps) to the authori- r *TNFUFST GFFU JODIFT GSPN r 8JMMCFVTFEGPSHFOFSBMTUPSBHF the existing water source and sewer tap. ties; obtaining all necessary clearances, li- activities, such as storage of books or censes, permits and certificates; completing stationery. The warehouse will not be r %PFTOPUSFRVJSFXBUFSGPSêSFQSPUFD- used for any goods requiring special tion reasons; a fire extinguishing system all required notifications; and receiving all conditions, such as food, chemicals or (dry system) will be used instead. If a necessary inspections. Doing Business also wet fire protection system is required records procedures for obtaining connections pharmaceuticals. by law, it is assumed that the water for electricity, water, sewerage and a fixed r )BTTUPSJFT CPUIBCPWFHSPVOE XJUI demand specified below also covers the land line. Procedures necessary to register a total surface of approximately 1,300.6 water needed for fire protection. square meters (14,000 square feet). the property so that it can be used as collat- r )BTBOBWFSBHFXBUFSVTFPGMJUFST Each floor is 3 meters (9 feet, 10 inches) eral or transferred to another entity are also high. (175 gallons) a day and an average counted. The survey divides the process of wastewater flow of 568 liters (150 gal- r )BTSPBEBDDFTTBOEJTMPDBUFEJOUIF building a warehouse into distinct procedures lons) a day. periurban area of the economy’s largest and calculates the time and cost of complet- business city (that is, on the fringes r )BTBQFBLXBUFSVTFPG MJUFST  ing each procedure in practice under normal of the city but still within its official gallons) a day and a peak wastewater circumstances. limits). flow of 1,136 liters (300 gallons) a day. Information is collected from experts in r *TOPUMPDBUFEJOBTQFDJBMFDPOPNJDPS r 8JMMIBWFBDPOTUBOUMFWFMPGXBUFSEF- construction licensing, including architects, industrial zone. The zoning require- mand and wastewater flow throughout construction lawyers, construction firms, ments for warehouses are met by build- the year. utility service providers and public officials ing in an area where similar warehouses The telephone connection: who deal with building regulations, includ- can be found. r *TNFUFST GFFU JODIFT GSPN ing approvals and inspections. To make the r *TMPDBUFEPOBMBOEQMPUPGTRVBSF the main telephone network. data comparable across economies, several as- meters (10,000 square feet) that is 100% r *TBêYFEMBOEMJOF sumptions about the business, the warehouse owned by BuildCo and is accurately project and the utility connections are used. registered in the cadastre and land registry. r *TBOFXDPOTUSVDUJPO UIFSFXBTOP previous construction on the land). DATA NOTES 27 PROCEDURES EMPLOYING WORKERS ASSUMPTIONS ABOUT THE BUSINESS The business: A procedure is any interaction of the compa- Doing Business measures the regulation of r *TBMJNJUFEMJBCJMJUZDPNQBOZ ny’s employees or managers with external par- employment, specifically as it affects the hir- r 0QFSBUFTJOUIFFDPOPNZTMBSHFTUCVTJ- ties, including government agencies, notaries, ing and firing of workers and the rigidity of ness city. the land registry, the cadastre, utility compa- working hours. r *TEPNFTUJDBMMZPXOFE nies, public and private inspectors and tech- In 2007 improvements were made to r 0QFSBUFTJOUIFNBOVGBDUVSJOHTFDUPS nical experts apart from in-house architects align the methodology for the employing r )BTFNQMPZFFT and engineers. Interactions between company XPSLFSTJOEJDBUPSTXJUIUIF*OUFSOBUJPOBM-B- r *TTVCKFDUUPDPMMFDUJWFCBSHBJOJOH employees, such as development of the ware- CPVS0SHBOJ[BUJPO *-0 DPOWFOUJPOT0OMZ agreements in economies where such house plans and inspections conducted by PGUIF*-0DPOWFOUJPOTDPWFSBSFBTNFB- agreements cover more than half the employees, are not counted as procedures. sured by Doing Business: employee termina- manufacturing sector and apply even to Procedures that the company undergoes to tion, weekend work, holiday with pay and firms not party to them. connect to electricity, water, sewerage and night work. The methodology was adapted to r "CJEFTCZFWFSZMBXBOESFHVMBUJPOCVU telephone services are included. All proce- ensure full consistency with these 4 conven- does not grant workers more benefits dures that are legally or in practice required tions. It is possible for an economy to receive than mandated by law, regulation or (if for building a warehouse are counted, even if the highest score on the ease of employing applicable) collective bargaining agree- they may be avoided in exceptional cases. XPSLFSTBOEDPNQMZXJUIBMMSFMFWBOU*-0DPO- ment. ventions (specifically, the 4 related to Doing TIME RIGIDITY OF EMPLOYMENT INDEX Business)—and no economy can achieve a Time is recorded in calendar days. The mea- better score by failing to comply with these The rigidity of employment index is the aver- sure captures the median duration that local conventions. age of 3 subindices: a difficulty of hiring index, experts indicate is necessary to complete a Ñ®F *-0 DPOWFOUJPOT DPWFSJOH BSFBT SF- a rigidity of hours index and a difficulty of procedure in practice. It is assumed that the lated to the employing workers indicators do firing index. All the subindices have several minimum time required for each procedure OPU JODMVEF UIF *-0 DPSF MBCPS TUBOEBSET‡ components. And all take values between 0 is 1 day. Although procedures may take place conventions covering the right to collective and 100, with higher values indicating more simultaneously, they cannot start on the same bargaining, the elimination of forced labor, rigid regulation. day (that is, simultaneous procedures start the abolition of child labor and equitable The difficulty of hiring index measures on consecutive days). If a procedure can be treatment in employment practices. Doing (i) whether fixed-term contracts are prohib- accelerated legally for an additional cost, the Business TVQQPSUT UIF *-0 DPSF MBCPS TUBO- ited for permanent tasks; (ii) the maximum fastest procedure is chosen. It is assumed that dards and this year includes information on cumulative duration of fixed-term contracts; BuildCo does not waste time and commits to their ratification. Doing Business does not and (iii) the ratio of the minimum wage for a completing each remaining procedure without measure or rank ratification or compliance trainee or first-time employee to the average delay. The time that BuildCo spends on gather- XJUI*-0DPOWFOUJPOT value added per worker. An economy is as- ing information is ignored. It is assumed that The data on employing workers are signed a score of 1 if fixed-term contracts are BuildCo is aware of all building requirements based on a detailed survey of employment prohibited for permanent tasks and a score and their sequence from the beginning. regulations that is completed by local lawyers of 0 if they can be used for any task. A score and public officials. Employment laws and of 1 is assigned if the maximum cumulative COST regulations as well as secondary sources are duration of fixed-term contracts is less than 3 Cost is recorded as a percentage of the econ- reviewed to ensure accuracy. To make the years; 0.5 if it is 3 years or more but less than omy’s income per capita. Only official costs data comparable across economies, several 5 years; and 0 if fixed-term contracts can last 5 are recorded. All the fees associated with assumptions about the worker and the busi- years or more. Finally, a score of 1 is assigned completing the procedures to legally build ness are used. if the ratio of the minimum wage to the aver- a warehouse are recorded, including those age value added per worker is 0.75 or more; associated with obtaining land use approv- ASSUMPTIONS ABOUT THE WORKER 0.67 for a ratio of 0.50 or more but less than als and preconstruction design clearances; The worker: 0.75; 0.33 for a ratio of 0.25 or more but less receiving inspections before, during and after r *TBZFBSPME OPOFYFDVUJWF GVMM than 0.50; and 0 for a ratio of less than 0.25. construction; getting utility connections; and time, male employee. The average value added per worker is the registering the warehouse property. Nonre- r )BTXPSLFEBUUIFTBNFDPNQBOZGPS ratio of an economy’s GNI per capita to the curring taxes required for the completion of years. working-age population as a percentage of the the warehouse project also are recorded. The r &BSOTBTBMBSZQMVTCFOFêUTFRVBMUP total population. building code, information from local experts the economy’s average wage during the The rigidity of hours index has 5 compo- and specific regulations and fee schedules are entire period of his employment. nents: (i) whether night work is unrestricted; used as sources for costs. If several local part- r *TBMBXGVMDJUJ[FOXIPCFMPOHTUPUIF (ii) whether weekend work is unrestricted; ners provide different estimates, the median same race and religion as the majority (iii) whether the workweek can consist of 5.5 reported value is used. of the economy’s population. days; (iv) whether the workweek can extend r 3FTJEFTJOUIFFDPOPNZTMBSHFTUCVTJ- to 50 hours or more (including overtime) The data details on dealing with construction ness city. for 2 months a year to respond to a seasonal permits can be found for each economy at r *TOPUBNFNCFSPGBMBCPSVOJPO VO- increase in production; and (v) whether paid http://www.doingbusiness.org. less membership is mandatory. annual vacation is 21 working days or fewer. 28 DOING BUSINESS IN VENE TO 2009 For each of these questions, if the answer is REGISTERING PROPERTY and complies with all safety standards, no, the economy is assigned a score of 1; oth- building codes and other legal require- erwise a score of 0 is assigned. Doing Business records the full sequence of ments. The property of land and build- The difficulty of firing index has 8 com- procedures necessary for a business (buyer) ing will be transferred in its entirety. ponents: (i) whether redundancy is disal- to purchase a property from another business r Will not be subject to renovations lowed as a basis for terminating workers; (seller) and to transfer the property title to or additional building following the (ii) whether the employer needs to notify a the buyer’s name so that the buyer can use purchase. third party (such as a government agency) to the property for expanding its business, use r Has no trees, natural water sources, terminate 1 redundant worker; (iii) whether the property as collateral in taking new loans natural reserves or historical monu- the employer needs to notify a third party to or, if necessary, sell the property to another ments of any kind. terminate a group of 25 redundant workers; business. The process starts with obtaining r Will not be used for special purposes, (iv) whether the employer needs approval the necessary documents, such as a copy of and no special permits, such as for from a third party to terminate 1 redundant the seller’s title if necessary, and conducting residential use, industrial plants, waste worker; (v) whether the employer needs ap- due diligence if required. The transaction is storage or certain types of agricultural proval from a third party to terminate a group considered complete when the buyer can use activities, are required. of 25 redundant workers; (vi) whether the law the property as collateral for a bank loan. r Has no occupants (legal or illegal), and requires the employer to reassign or retrain a Every procedure required by law or nec- no other party holds a legal interest in it. worker before making the worker redundant; essary in practice is included, whether it is the (vii) whether priority rules apply for redun- responsibility of the seller or the buyer or must PROCEDURES dancies; and (viii) whether priority rules apply be completed by a third party on their behalf. A procedure is defined as any interaction for reemployment. For the first question an -PDBMQSPQFSUZMBXZFST OPUBSJFTBOEQSPQFSUZ of the buyer or the seller or their agents (if answer of yes for workers of any income level registries provide information on procedures an agent is legally or in practice required) gives a score of 10 and means that the rest of as well as the time and cost to complete each with external parties, including government the questions do not apply. An answer of yes of them. agencies, inspectors, notaries and lawyers. to question (iv) gives a score of 2. For every To make the data comparable across Interactions between company officers and other question, if the answer is yes, a score of economies, several assumptions about the employees are not considered. All procedures 1 is assigned; otherwise a score of 0 is given. parties to the transaction, the property and that are legally or in practice required for Questions (i) and (iv), as the most restrictive the procedures are used. registering property are recorded, even if they regulations, have greater weight in the con- may be avoided in exceptional cases. It is as- struction of the index. ASSUMPTIONS ABOUT THE PARTIES sumed that the buyer follows the fastest legal The parties (buyer and seller): option available and used by the majority of FIRING COST property owners. Although the buyer may use r "SFMJNJUFEMJBCJMJUZDPNQBOJFT The firing cost indicator measures the cost of r "SFMPDBUFEJOUIFQFSJVSCBOBSFBPGUIF lawyers or other professionals where neces- advance notice requirements, severance pay- economy’s selected city. sary in the registration process, it is assumed ments and penalties due when terminating r "SFEPNFTUJDBMMZBOEQSJWBUFMZ that it does not employ an outside facilitator a redundant worker, expressed in weeks of owned. in the registration process unless legally or in salary. If the firing cost adds up to 8 or fewer r )BWFFNQMPZFFTFBDI BMMPGXIPN practice required to do so. weeks of salary, a score of 0 is assigned for the are nationals. purposes of calculating the aggregate ease of TIME r 1FSGPSNHFOFSBMDPNNFSDJBMBDUJWJUJFT Doing Business ranking. If the cost adds up to Time is recorded in calendar days. The mea- more than 8 weeks of salary, the score is the ASSUMPTIONS ABOUT THE PROPERTY sure captures the median duration that prop- number of weeks. One month is recorded as The property: erty lawyers, notaries or registry officials indi- 4 and 1/3 weeks. r Has a value of 50 times income per cate is necessary to complete a procedure. It is capita. The sale price equals the value. assumed that the minimum time required for The data details on employing workers can be each procedure is 1 day. Although procedures r Is fully owned by the seller. found for each economy at http://www.doing- may take place simultaneously, they cannot business.org. This methodology was developed r Has no mortgages attached and has start on the same day. It is assumed that the in Botero, Juan C., Simeon Djankov, Rafael La been under the same ownership for the buyer does not waste time and commits to Porta, Florencio López-de-Silanes and Andrei past 10 years. completing each remaining procedure with- Shleifer. 2004. "The Regulation of Labor." Quar- r Is registered in the land registry or out delay. If a procedure can be accelerated for terly Journal of Economics 119 (4):1339-82 and cadastre, or both, and is free of title an additional cost, the fastest legal procedure is adopted here with minor changes. disputes. available and used by the majority of property r Is located in a periurban commercial owners is chosen. If procedures can be under- zone, and no rezoning is required. taken simultaneously, it is assumed that they r Consists of land and a building. The are. It is assumed that the parties involved are land area is 557.4 square meters (6,000 aware of all regulations and their sequence square feet). A 2-story warehouse of from the beginning. Time spent on gathering 929 square meters (10,000 square feet) information is not considered. is located on the land. The warehouse is 10 years old, is in good condition DATA NOTES 29 COST Several assumptions about the secured so that all types of obligations and debts Cost is recorded as a percentage of the prop- borrower and lender are used: can be secured by stating a maximum erty value, assumed to be equivalent to 50 rather than a specific amount between r ABC is a domestic, limited liability the parties. times income per capita. Only official costs company. required by law are recorded, including fees, r A collateral registry is in operation that r ABC has its headquarters and only base is unified geographically and by asset transfer taxes, stamp duties and any other of operations in the economy’s largest type and that is indexed by the name of payment to the property registry, notaries, business city. public agencies or lawyers. Other taxes, such the grantor of a security right. as capital gains tax or value added tax, are r To fund its business expansion plans, r Secured creditors are paid first (for ABC obtains a loan from BizBank for example, before general tax claims and excluded from the cost measure. Both costs an amount up to 10 times income per employee claims) when a debtor de- borne by the buyer and those borne by the capita in local currency. seller are included. If cost estimates differ faults outside an insolvency procedure. among sources, the median reported value r Both ABC and BizBank are 100% r Secured creditors are paid first (for is used. domestically owned. example, before general tax claims and The case scenarios also involve assumptions. employee claims) when a business is The data details on registering property can be In case A, as collateral for the loan, ABC liquidated. found for each economy at http://www.doing- grants BizBank a nonpossessory security in- r Secured creditors are not subject to business.org. terest in one category of revolving movable as- an automatic stay or moratorium on sets, for example, its accounts receivable or its enforcement procedures when a debtor inventory. ABC wants to keep both possession enters a court-supervised reorganiza- GETTING CREDIT and ownership of the collateral. In economies tion procedure. in which the law does not allow nonposses- r The law allows parties to agree in a col- Doing Business constructs measures of the sory security interests in movable property, lateral agreement that the lender may legal rights of borrowers and lenders and the ABC and BizBank use a fiduciary transfer-of- enforce its security right out of court. sharing of credit information. The first set of title arrangement (or a similar substitute for r Ñ®FJOEFYSBOHFTGSPNUP XJUI indicators describes how well collateral and nonpossessory security interests). higher scores indicating that collateral bankruptcy laws facilitate lending. The second In case B, ABC grants BizBank a busi- and bankruptcy laws are better designed set measures the coverage, scope, quality and ness charge, enterprise charge, floating charge to expand access to credit. accessibility of credit information available or any charge or combination of charges that through public and private credit registries. gives BizBank a security interest over ABC’s DEPTH OF CREDIT INFORMATION INDEX The data on the legal rights of borrowers combined assets (or as much of ABC’s assets and lenders are gathered through a survey of as possible). ABC keeps ownership and pos- The depth of credit information index mea- financial lawyers and verified through analy- session of the assets. sures rules affecting the scope, accessibility sis of laws and regulations as well as public The strength of legal rights index in- and quality of credit information available sources of information on collateral and bank- cludes 8 aspects related to legal rights in col- through either public or private credit regis- ruptcy laws. The data on credit information lateral law and 2 aspects in bankruptcy law. A tries. A score of 1 is assigned for each of the sharing are built in 2 stages. First, banking su- score of 1 is assigned for each of the following following 6 features of the public registry or pervision authorities and public information features of the laws: the private credit bureau (or both): sources are surveyed to confirm the presence r Any business may use movable assets as r Both positive credit information (for of public credit registries and private credit in- collateral while keeping possession of example, loan amounts and pattern of formation bureaus. Second, when applicable, the assets, and any financial institution on-time repayments) and negative in- a detailed survey on the public or private may accept such assets as collateral. formation (for example, late payments, credit registry’s structure, law and associated r The law allows a business to grant number and amount of defaults and rules is administered to the credit registry. a nonpossessory security right in a bankruptcies) are distributed. Survey responses are verified through several single category of revolving movable r Data on both firms and individuals are rounds of follow-up communication with re- assets (such as accounts receivable or distributed. spondents as well as by contacting third par- inventory), without requiring a specific r Data from retailers, trade creditors or ties and consulting public sources. The survey description of the secured assets. utility companies as well as financial data are confirmed through teleconference r The law allows a business to grant institutions are distributed. calls or on-site visits in all economies. a nonpossessory security right in r More than 2 years of historical data are substantially all of its assets, without STRENGTH OF LEGAL RIGHTS INDEX distributed. Registries that erase data requiring a specific description of the on defaults as soon as they are repaid The strength of legal rights index measures secured assets. obtain a score of 0 for this indicator. the degree to which collateral and bankruptcy r A security right may extend to future r Data on loans below 1% of income per laws protect the rights of borrowers and lend- or after-acquired assets and may extend capita are distributed. A registry must ers and thus facilitate lending. Two case sce- automatically to the products, proceeds have a minimum coverage of 1% of the narios are used to determine the scope of or replacements of the original assets. adult population to score a 1 for this the secured transactions system, involving a r General description of debts and obliga- indicator. secured borrower, the company ABC, and a tions is permitted in collateral agree- r Regulations guarantee borrowers the secured lender, BizBank. ments and in registration documents, right to access their data in the largest 30 DOING BUSINESS IN VENE TO 2009 registry in the economy. PROTECTING INVESTORS required disclosures made (that is, the transaction is not fraudulent). r The index ranges from 0 to 6, with higher values indicating the availability Doing Business measures the strength of mi- r The transaction is unfair to buyer. of more credit information, from either nority shareholder protections against direc- Shareholders sue Mr. James and the a public registry or a private bureau, to tors’ misuse of corporate assets for personal other parties that approved the transac- facilitate lending decisions. If the reg- gain. The indicators distinguish 3 dimensions tion. istry is not operational or has coverage of investor protection: transparency of re- of less than 0.1% of the adult popula- EXTENT OF DISCLOSURE INDEX lated-party transactions (extent of disclosure tion, the score on the depth of credit index), liability for self-dealing (extent of di- The extent of disclosure index has 5 compo- information index is 0. rector liability index) and shareholders’ ability nents: PUBLIC CREDIT REGISTRY COVERAGE to sue officers and directors for misconduct r What corporate body can provide le- (ease of shareholder suits index). The data gally sufficient approval for the transac- The public credit registry coverage indicator come from a survey of corporate lawyers and tion. A score of 0 is assigned if it is the reports the number of individuals and firms are based on securities regulations, company CEO or the managing director alone; 1 listed in a public credit registry with informa- laws and court rules of evidence. if the board of directors or shareholders tion on repayment history, unpaid debts or To make the data comparable across must vote and Mr. James is permitted credit outstanding from the past 5 years. The economies, several assumptions about the to vote; 2 if the board of directors must number is expressed as a percentage of the business and the transaction are used. vote and Mr. James is not permitted to adult population (the population aged 15 and vote; 3 if shareholders must vote and ASSUMPTIONS ABOUT THE BUSINESS Mr. James is not permitted to vote. above according to the World Bank’s World Development Indicators 2008). A public credit The business (buyer): r Whether immediate disclosure of the registry is defined as a database managed by transaction to the public, the regula- r Is a publicly traded corporation listed tor or the shareholders is required. A the public sector, usually by the central bank on the economy’s most important score of 0 is assigned if no disclosure is or the superintendent of banks, that collects stock exchange. If the number of required; 1 if disclosure on the terms information on the creditworthiness of bor- publicly traded companies listed on of the transaction but not Mr. James’s rowers (persons or businesses) in the financial that exchange is less than 10, or if there conflict of interest is required; 2 if system and makes it available to financial is no stock exchange in the economy, it disclosure on both the terms and Mr. institutions. If no public registry operates, the is assumed that buyer is a large private James’s conflict of interest is required. coverage value is 0. company with multiple shareholders. r Whether disclosure in the annual re- r Has a board of directors and a chief port is required. A score of 0 is assigned PRIVATE CREDIT BUREAU COVERAGE executive officer (CEO) who may legally if no disclosure on the transaction is The private credit bureau coverage indica- act on behalf of buyer where permitted, required; 1 if disclosure on the terms tor reports the number of individuals and even if this is not specifically required of the transaction but not Mr. James’s firms listed by a private credit bureau with by law. conflict of interest is required; 2 if information on repayment history, unpaid r Is a food manufacturer. disclosure on both the terms and Mr. debts or credit outstanding from the past 5 James’s conflict of interest is required. r Has its own distribution network. years. The number is expressed as a percent- r Whether disclosure by Mr. James to age of the adult population (the population ASSUMPTIONS ABOUT THE the board of directors is required. A aged 15 and above according to the World TRANSACTION score of 0 is assigned if no disclosure Bank’s World Development Indicators 2008). r Mr. James is buyer’s controlling share- is required; 1 if a general disclosure of A private credit bureau is defined as a private holder and a member of buyer’s board the existence of a conflict of interest is firm or nonprofit organization that maintains of directors. He owns 60% of buyer and required without any specifics; 2 if full elected 2 directors to buyer’s 5-member disclosure of all material facts relating a database on the creditworthiness of borrow- board. to Mr. James’s interest in the buyer- ers (persons or businesses) in the financial seller transaction is required. system and facilitates the exchange of credit r Mr. James also owns 90% of seller, a information among banks and financial in- company that operates a chain of retail r Whether it is required that an external hardware stores. Seller recently closed a body, for example, an external auditor, stitutions. Credit investigative bureaus and large number of its stores. review the transaction before it takes credit reporting firms that do not directly place. A score of 0 is assigned if no; 1 if facilitate information exchange among banks r Mr. James proposes to buyer that it yes. and other financial institutions are not con- purchase seller’s unused fleet of trucks sidered. If no private bureau operates, the to expand buyer’s distribution of its The index ranges from 0 to 10, with higher coverage value is 0. food products. Buyer agrees. The price values indicating greater disclosure. is equal to 10% of buyer’s assets and is The data details on getting credit can be found higher than the market value. for each economy at http://www.doingbusi- r The proposed transaction is part of the ness.org. This methodology was developed in company’s ordinary course of business Djankov, Simeon, Caralee McLiesh and Andrei and is not outside the authority of the Shleifer. 2007. "Private Credit in 129 Countries." company. Journal of Financial Economics 84 (2): 299-329 r Buyer enters into the transaction. All and is adopted here with minor changes. required approvals are obtained, and all DATA NOTES 31 EXTENT OF DIRECTOR LIABILITY INDEX EASE OF SHAREHOLDER SUITS INDEX PAYING TAXES The extent of director liability index has 7 The ease of shareholder suits index has 6 components: components: Doing Business records the taxes and manda- r Whether a shareholder plaintiff is able r What range of documents is available tory contributions that a medium-size com- to hold Mr. James liable for damage the to the shareholder plaintiff from the pany must pay in a given year, as well as mea- buyer-seller transaction causes to the defendant and witnesses during trial. sures of the administrative burden of paying company. A score of 0 is assigned if Mr. A score of 1 is assigned for each of the taxes and contributions. Taxes and contribu- James cannot be held liable or can be following types of documents avail- tions measured include the profit or corporate held liable only for fraud or bad faith; 1 able: information that the defendant income tax, social contributions and labor if Mr. James can be held liable only if he has indicated he intends to rely on for taxes paid by the employer, property taxes, influenced the approval of the transac- his defense; information that directly property transfer taxes, dividend tax, capital tion or was negligent; 2 if Mr. James proves specific facts in the plaintiff ’s gains tax, financial transactions tax, waste col- can be held liable when the transaction claim; any information relevant to lection taxes and vehicle and road taxes. is unfair or prejudicial to the other the subject matter of the claim; and shareholders. any information that may lead to the Doing Business measures all taxes and discovery of relevant information. contributions that are government mandated r Whether a shareholder plaintiff is able (at any level—federal, state or local), apply to to hold the approving body (the CEO r Whether the plaintiff can directly the standardized business and have an impact or board of directors) liable for damage examine the defendant and witnesses the transaction causes to the company. during trial. A score of 0 is assigned if in its income statements. In doing so, Doing A score of 0 is assigned if the approving no; 1 if yes, with prior approval of the Business goes beyond the traditional defini- body cannot be held liable or can be questions by the judge; 2 if yes, without tion of a tax: as defined for the purposes of held liable only for fraud or bad faith; 1 prior approval. government national accounts, taxes include if the approving body can be held liable only compulsory, unrequited payments to r Whether the plaintiff can obtain for negligence; 2 if the approving body categories of relevant documents from general government. Doing Business departs can be held liable when the transac- from this definition because it measures im- the defendant without identifying each tion is unfair or prejudicial to the other posed charges that affect business accounts, document specifically. A score of 0 is shareholders. not government accounts. The main differ- assigned if no; 1 if yes. r Whether a court can void the transac- ences relate to labor contributions and value r Whether shareholders owning 10% or tion upon a successful claim by a less of the company’s share capital can added tax. The Doing Business measure in- shareholder plaintiff. A score of 0 is cludes government-mandated contributions request that a government inspector assigned if rescission is unavailable paid by the employer to a requited private investigate the buyer-seller transaction or is available only in case of fraud or pension fund or workers’ insurance fund. The without filing suit in court. A score of 0 bad faith; 1 if rescission is available is assigned if no; 1 if yes. indicator includes, for example, Australia’s when the transaction is oppressive or prejudicial to the other shareholders; r Whether shareholders owning 10% or compulsory superannuation guarantee and 2 if rescission is available when the less of the company’s share capital have workers’ compensation insurance. It excludes transaction is unfair or entails a conflict the right to inspect the transaction value added taxes from the total tax rate be- of interest. documents before filing suit. A score of cause they do not affect the accounting profits 0 is assigned if no; 1 if yes. of the business—that is, they are not reflected r Whether Mr. James pays damages for the harm caused to the company upon r Whether the standard of proof for civil in the income statement. a successful claim by the shareholder suits is lower than for a criminal case. A Doing Business has prepared a case plaintiff. A score of 0 is assigned if no; 1 score of 0 is assigned if no; 1 if yes. scenario to measure the taxes and contribu- if yes. The index ranges from 0 to 10, with higher tions paid by a standardized business and r Whether Mr. James repays profits made values indicating greater powers of sharehold- the complexity of an economy’s tax compli- from the transaction upon a successful ers to challenge the transaction. ance system. This case scenario uses a set of claim by the shareholder plaintiff. A financial statements and assumptions about score of 0 is assigned if no; 1 if yes. STRENGTH OF INVESTOR PROTEC- transactions made over the year. Tax experts TION INDEX r Whether fines and imprisonment can in each economy compute the taxes and con- be applied against Mr. James. A score of The strength of investor protection index is tributions due in their jurisdiction based on 0 is assigned if no; 1 if yes. the average of the extent of disclosure index, the standardized case facts. Information is the extent of director liability index and the also compiled on the frequency of filing, tax r Whether shareholder plaintiffs are able ease of shareholder suits index. The index audits and other costs of compliance. The to sue directly or derivatively for dam- age the transaction causes to the com- ranges from 0 to 10, with higher values indi- project was developed and implemented in pany. A score of 0 is assigned if suits cating more investor protection. cooperation with PricewaterhouseCoopers. are unavailable or are available only To make the data comparable across for shareholders holding more than The data details on protecting investors can be economies, several assumptions about the 10% of the company’s share capital; 1 if found for each economy at http://www.doing- business and the taxes and contributions are direct or derivative suits are available business.org. This methodology was developed used. for shareholders holding 10% or less of in Djankov, Rafael La Porta, Florencio López- share capital. de-Silanes and Andrei Shleifer. 2008. "The Law The index ranges from 0 to 10, with higher and Economics of Self-Dealing." Journal of values indicating greater liability of directors. Financial Economics 88 (3): 430-65. 32 DOING BUSINESS IN VENE TO 2009 ASSUMPTIONS ABOUT THE BUSINESS ASSUMPTIONS ABOUT THE TAXES tributions: the corporate income tax, value The business: AND CONTRIBUTIONS added or sales tax and labor taxes, includ- r Is a limited liability, taxable company. All the taxes and contributions paid in the ing payroll taxes and social contributions. second year of operation (fiscal 2007) are Preparation time includes the time to collect r Started operations on January 1, 2006. recorded. A tax or contribution is considered all information necessary to compute the tax At that time the company purchased distinct if it has a different name or is collected payable. If separate accounting books must all the assets shown in its balance sheet and hired all its workers. by a different agency. Taxes and contributions be kept for tax purposes—or separate cal- with the same name and agency, but charged culations made—the time associated with r Operates in the economy’s selected city. at different rates depending on the business, these processes is included. This extra time is r Is 100% domestically owned and has are counted as the same tax or contribution. included only if the regular accounting work 5 owners, all of whom are natural The number of times the company is not enough to fulfill the tax accounting persons. pays taxes and contributions in a year is the requirements. Filing time includes the time to r Has a start-up capital of 102 times number of different taxes or contributions complete all necessary tax return forms and income per capita at the end of 2006. multiplied by the frequency of payment (or make all necessary calculations. Payment time r Performs general industrial or commer- withholding) for each one. The frequency considers the hours needed to make the pay- cial activities. Specifically, it produces of payment includes advance payments (or ment online or at the tax authorities. Where ceramic flowerpots and sells them at withholding) as well as regular payments (or taxes and contributions are paid in person, the retail. It does not participate in foreign withholding). time includes delays while waiting. trade (no import or export) and does not handle products subject to a special TAX PAYMENTS TOTAL TAX RATE tax regime, for example, liquor or The tax payments indicator reflects the total The total tax rate measures the amount of tobacco. number of taxes and contributions paid, the taxes and mandatory contributions borne by r At the beginning of 2007, owns 2 plots method of payment, the frequency of pay- the business in the second year of operation, of land, 1 building, machinery, office ment and the number of agencies involved expressed as a share of commercial profit. equipment, computers and 1 truck and for this standardized case during the second Doing Business in Veneto 2009 and Doing leases 1 truck. year of operation. It includes consumption Business 2009 report the total tax rate for r Does not qualify for investment taxes paid by the company, such as sales tax or fiscal 2007. The total amount of taxes borne incentives or any benefits apart from value added tax. These taxes are traditionally is the sum of all the different taxes and con- those related to the age or size of the collected from the consumer on behalf of the tributions payable after accounting for allow- company. tax agencies. Although they do not affect the able deductions and exemptions. The taxes r Has 60 employees—4 managers, 8 as- income statements of the company, they add withheld (such as personal income tax) or sistants and 48 workers. All are nation- to the administrative burden of complying collected by the company and remitted to the als, and 1 manager is also an owner. with the tax system and so are included in the tax authorities (such as value added tax, sales r Has a turnover of 1,050 times income tax payments measure. tax or goods and service tax) but not borne by per capita. The number of payments takes into ac- the company are excluded. The taxes included count electronic filing. Where full electronic can be divided into 5 categories: profit or cor- r Makes a loss in the first year of opera- tion. filing and payment is allowed and it is used porate income tax, social contributions and by the majority of medium-size businesses, labor taxes paid by the employer (in respect r Has a gross margin (pretax) of 20% the tax is counted as paid once a year even if of which all mandatory contributions are in- (that is, sales are 120% of the cost of payments are more frequent. For taxes paid cluded, even if paid to a private entity such goods sold). through third parties, such as tax on interest as a requited pension fund), property taxes, r Distributes 50% of its net profits as withheld at source by a financial institution turnover taxes and other small taxes (such as dividends to the owners at the end of or fuel tax paid by the fuel distributor, only municipal fees and vehicle and fuel taxes). the second year. one payment is included even if payments are The total tax rate is designed to provide r Sells one of its plots of land at a profit more frequent. These are taxes withheld or a comprehensive measure of the cost of all during the second year. paid at source where no filing is required of the taxes a business bears. It differs from the r Has annual fuel costs for its trucks the company. statutory tax rate, which merely provides the equal to twice income per capita. Where 2 or more taxes or contributions factor to be applied to the tax base. In comput- are filed for and paid jointly using the same ing the total tax rate, the actual tax payable is r Is subject to a series of detailed as- sumptions on expenses and transac- form, each of these joint payments is counted divided by commercial profit. tions to further standardize the case. once. For example, if mandatory health insur- Commercial profit is essentially net All financial statement variables are ance contributions and mandatory pension profit before all taxes borne. It differs from proportional to 2005 income per capita. contributions are filed for and paid together, the conventional profit before tax, reported in For example, the owner who is also a only one of these contributions would be in- financial statements. In computing profit be- manager spends 10% of income per cluded in the number of payments. fore tax, many of the taxes borne by a firm are capita on traveling for the company deductible. In computing commercial profit, (20% of this owner’s expenses are TIME these taxes are not deductible. Commercial purely private, 20% are for entertaining Time is recorded in hours per year. The in- profit therefore presents a clear picture of the customers and 60% for business travel). dicator measures the time taken to prepare, actual profit of a business before any of the file and pay 3 major types of taxes and con- taxes it bears in the course of the fiscal year. DATA NOTES 33 Commercial profit is computed as sales customs brokers, port officials and banks pro- the fastest legal procedure is chosen. Fast- minus cost of goods sold, minus gross sala- vide information on required documents and track procedures applying to firms located in ries, minus administrative expenses, minus cost as well as the time to complete each pro- an export processing zone are not taken into other expenses, minus provisions, plus capital cedure. To make the data comparable across account because they are not available to all gains (from the property sale) minus interest economies, several assumptions about the trading companies. Ocean transport time is expense, plus interest income and minus com- business and the traded goods are used. not included. It is assumed that neither the ex- mercial depreciation. To compute the com- porter nor the importer wastes time and that mercial depreciation, a straight-line depre- ASSUMPTIONS ABOUT THE BUSINESS each commits to completing each remain- ciation method is applied, with the following The business: ing procedure without delay. Procedures that rates: 0% for the land, 5% for the building, r Has 60 employees. can be completed in parallel are measured 10% for the machinery, 33% for the comput- as simultaneous. The waiting time between ers, 20% for the office equipment, 20% for r Is located in the economy’s selected city. procedures—for example, during unloading the truck and 10% for business development r Is a private, limited liability company. It of the cargo—is included in the measure. expenses. Commercial profit amounts to 59.4 does not operate in an export process- times income per capita. ing zone or an industrial estate with COST This methodology is consistent with the special export or import privileges. Cost measures the fees levied on a 20-foot con- Total Tax Contribution framework developed r Is domestically owned with no foreign tainer in U.S. dollars. All the fees associated by PricewaterhouseCoopers. This framework ownership. with completing the procedures to export or measures taxes that are borne by compa- r Exports more than 10% of its sales. import the goods are included. These include nies and affect their income statements, as costs for documents, administrative fees for does Doing Business. But while Pricewater- ASSUMPTIONS ABOUT THE TRADED customs clearance and technical control, ter- houseCoopers bases its calculation on data GOODS minal handling charges and inland transport. from the largest companies in the economy, r The traded product travels in a dry- The cost measure does not include customs Doing Business focuses on a standardized cargo, 20-foot, full container load. It tariffs and duties or costs related to ocean medium-size company. weighs 10 tons and is valued at $20,000. transport. Only official costs are recorded. The product: The data details on paying taxes can be found r Is not hazardous nor does it include The data details on trading across borders for each economy at http://www.doingbusi- military items. can be found for each economy at http://www. ness.org. This methodology was developed r Does not require refrigeration or any doingbusiness.org. This methodology was de- in Djankov, Simeon, Tim Ganser, Caralee other special environment. veloped in Djankov, Simeon, Caroline Freund McLiesh, Rita Ramalho and Andrei Shleifer. and Cong Pham. Forthcoming. "Trading on r Does not require any special phytosani- 2008. The Effect of Corporate Taxes on Invest- Time." Review of Economics and Statistics; and tary or environmental safety standards ment and Entrepreneurship. NBER Working other than accepted international is adopted here with minor changes. Paper 13756. Cambridge, MA: National Bu- standards. reau of Economic Research. DOCUMENTS ENFORCING CONTRACTS All documents required per shipment to TRADING ACROSS BORDERS export and import the goods are recorded. Indicators on enforcing contracts measure the It is assumed that the contract has already efficiency of the judicial system in resolving Doing Business compiles procedural require- been agreed upon and signed by both parties. a commercial dispute. The data are built by ments for exporting and importing a stan- Documents required for clearance by govern- following the step-by-step evolution of a com- dardized cargo of goods by ocean transport. ment ministries, customs authorities, port mercial sale dispute before local courts. The Every official procedure for exporting and and container terminal authorities, health data are collected through study of the codes importing the goods is recorded—from the and technical control agencies and banks are of civil procedure and other court regulations contractual agreement between the 2 parties taken into account. Since payment is by letter as well as surveys completed by local litigation to the delivery of goods—along with the time of credit, all documents required by banks for lawyers (and, in a quarter of the economies, by and cost necessary for completion. All docu- the issuance or securing of a letter of credit judges as well). The relevant court in Padua is ments needed by the trader for clearance of are also taken into account. Documents that Tribunale di Padova. the goods across the border are also recorded. are renewed at least annually and that do not For exporting goods, procedures range from require renewal per shipment (for example, ASSUMPTIONS ABOUT THE CASE packing the goods at the factory to their de- an annual tax clearance certificate) are not r The value of the claim equals 200% of parture from the port of exit. For importing included. the economy’s income per capita. goods, procedures range from the vessel’s ar- r The dispute concerns a lawful transac- rival at the port of entry to the cargo’s delivery TIME tion between 2 businesses (Seller at the factory warehouse. The time and cost The time for exporting and importing is re- and Buyer), located in the economy’s for ocean transport are not included. Payment corded in calendar days. The time calculation selected city. Seller sells goods worth is made by letter of credit, and the time, cost for a procedure starts from the moment it is 200% of the economy’s income per and documents required for the issuance of a initiated and runs until it is completed. If a capita to Buyer. After Seller delivers the letter of credit are taken into account. procedure can be accelerated for an additional goods to Buyer, Buyer refuses to pay for the goods on the grounds that the -PDBMGSFJHIUGPSXBSEFST TIJQQJOHMJOFT  cost and is available to all trading companies, 34 DOING BUSINESS IN VENE TO 2009 delivered goods were not of adequate procedure for economies that allow electronic ASSUMPTIONS ABOUT THE BUSINESS quality. filing of court cases. Procedural steps that take The business: r Seller sues Buyer to recover the amount place simultaneously with or are included in r Is a limited liability company. under the sales agreement (that is, other procedural steps are not counted in the 200% of the economy’s income per total number of procedures. r Operates in the economy’s selected city. capita). Buyer opposes Seller’s claim, r Is 100% domestically owned, with the saying that the quality of the goods is TIME founder, who is also the chairman of not adequate. The claim is disputed on Time is recorded in calendar days, counted the supervisory board, owning 51% (no the merits. other shareholder holds more than 5% from the moment Seller files the lawsuit in r A court in the economy’s selected city of shares). court until payment. This includes both the with jurisdiction over commercial days when actions take place and the waiting r Has downtown real estate, where it runs cases worth 200% of income per capita periods between. The average duration of dif- a hotel, as its major asset. decides the dispute. ferent stages of dispute resolution is recorded: r Has a professional general manager. r Seller attaches Buyer’s goods prior to the completion of filing and service of process obtaining a judgment because Seller r Has had average annual revenue of and of pretrial attachment (time to file the 1,000 times income per capita over the fears that Buyer may become insolvent case), the issuance of judgment (time for the during the lawsuit. past 3 years. trial and obtaining the judgment) and the r Expert opinions are given on the quality moment of payment (time for enforcement r Has 201 employees and 50 suppliers, of the delivered goods. If it is standard each of which is owed money for the of judgment). practice in the economy for parties to last delivery. call witnesses or expert witnesses to COST r Borrowed from a domestic bank 5 years give an opinion on the quality of the Cost is recorded as a percentage of the claim, ago (the loan has 10 years to full repay- goods, the parties each call one witness ment) and bought real estate (the hotel assumed to be equivalent to 200% of income or expert witness. If it is standard building), using it as security for the practice for the judge to appoint an per capita. No bribes are recorded. Three types bank loan. independent expert to give an opinion of costs are recorded: court costs, enforcement costs and average attorney fees. Court costs in- r Has observed the payment schedule and on the quality of the goods, the judge all other conditions of the loan till now. does so. In this case the judge does not clude all costs Seller must advance to the court allow opposing expert testimony. or to the expert regardless of the final cost to r Has a floating charge or mortgage, with Seller. Expert fees, if required by law or neces- the value of its principal being exactly r The judgment is 100% in favor of Seller: sary in practice, are included in court costs. equal to the market value of the hotel. the judge decides that the goods are of adequate quality and that Buyer must Enforcement costs are all costs Seller must ASSUMPTIONS ABOUT THE CASE pay the agreed price (200% of income advance to enforce the judgment through a per capita). public sale of Buyer’s movable assets, regard- The business is experiencing liquidity prob- r Buyer does not appeal the judgment. less of the final cost to Seller. Average attorney lems. The company’s loss in 2007 reduced its The judgment becomes final. fees are the fees Seller must advance to a local net worth to a negative figure. There is no cash attorney to represent Seller in the standard- to pay the bank interest or principal in full, r Seller takes all required steps for prompt enforcement of the judgment. The ized case. due tomorrow. The business therefore defaults money is successfully collected through on its loan. Management believes that losses a public sale of Buyer’s movable assets The data details on enforcing contracts can be will be incurred in 2008 and 2009 as well. (for example, office equipment). found for each economy at http://www.doing- The bank holds a floating charge against business.org. This methodology was developed the hotel in economies where floating charges PROCEDURES in Djankov, Simeon, Rafael La Porta, Florencio are possible. If the law does not permit a float- The list of procedural steps compiled for each López-de-Silanes and Andrei Shleifer. 2003. ing charge but contracts commonly use some economy traces the chronology of a commer- "Courts."Quarterly Journal of Economics 118 other provision to that effect, this provision is cial dispute before the relevant court. A pro- (2): 453-517; and is adopted here with minor specified in the lending contract. cedure is defined as any interaction between changes. The business has too many creditors to the parties, or between them and the judge negotiate an informal out-of-court workout. It or court officer. This includes steps to file the has the following options: a judicial procedure case, steps for trial and judgment and steps CLOSING A BUSINESS aimed at the rehabilitation or reorganiza- necessary to enforce the judgment. tion of the business to permit its continued The survey allows respondents to record Doing Business studies the time, cost and operation; a judicial procedure aimed at the procedures that exist in civil law but not com- outcomes of bankruptcy proceedings involv- liquidation or winding-up of the company; or mon law jurisdictions, and vice versa. For ing domestic entities. The data are derived a debt enforcement or foreclosure procedure example, in civil law countries the judge can from survey responses by local insolvency aimed at selling the hotel either piecemeal or appoint an independent expert, while in com- practitioners and verified through a study of as a going concern, enforced either in court mon law countries each party submits a list laws and regulations as well as public informa- (or through a government authority like a of expert witnesses to the court. To indicate tion on bankruptcy systems. debt collection agency) or out of court (for the overall efficiency of court procedures, 1 To make the data comparable across example, by appointing a receiver). procedure is now subtracted for economies economies, several assumptions about the If an economy has had fewer than 5 cases that have specialized commercial courts and 1 business and the case are used. a year over the past 5 years involving a judicial DATA NOTES 35 reorganization, judicial liquidation or debt en- This methodology was developed in Djankov, economy merged several procedures by creat- forcement procedure, the economy receives a Simeon, Oliver Hart, Caralee McLiesh and An- ing a unified property registry and separately “no practiceâ€? mark. This means that creditors drei Shleifer. 2006. Debt Enforcement around reduced the property transfer tax, this counts are unlikely to recover their debt through the the World. NBER Working Paper 12807. Cam- as 1 reform for the purposes of attaining the legal process (in or out of court). bridge, MA: National Bureau of Economic 3 reforms required to be a candidate for top Research. reformer. TIME Second, Doing Business ranks these Time for creditors to recover their debt is economies on the increase in their ranking on recorded in calendar years. Information is EASE OF DOING BUSINESS the ease of Doing Business from the previous collected on the sequence of procedures and year. Top reformers are economies that have on whether any procedures can be carried The ease of Doing Business index ranks implemented 3 or more reforms making it out simultaneously. Potential delay tactics by economies from 1 to 181. For each economy easier to do business and, as a result, improved the parties, such as the filing of dilatory ap- the index is calculated as the ranking on the their position in the ease of Doing Business peals or requests for extension, are taken into simple average of its percentile rankings on more than other economies. The change in consideration. each of the 10 topics covered in Doing Busi- ranking is calculated by comparing this year's ness 2009. The ranking on each topic is the ranking with last year's back-calculated rank- COST simple average of the percentile rankings on ing. To ensure consistency over time, data sets The cost of the proceedings is recorded as a its component indicators. for previous years are adjusted to reflect ant percentage of the estate’s value. The cost is If an economy has no laws or regula- changes in methodology, additions of new calculated on the basis of survey responses by tions covering a specific area—for example economies and revisions in data. insolvency practitioners and includes court bankruptcy—it receives a "no practice" mark. fees as well as fees of insolvency practitioners, Similarly, an economy receives a "no practice" independent assessors, lawyers and accoun- or "not possible" mark if regulation exists but tants. Respondents provide cost estimates is never used in practice or if a competing from among the following options: a specific regulation prohibits such practice. Either way, percentage or less than 2%, 2–5%, 5–8%, a "no practice" or "not possible" mark puts the 8–11%, 11–18%, 18–25%, 25–33%, 33–50%, economy at the bottom of the ranking on the 50–75% and more than 75% of the value of relevant indicator. the business estate. Higher rankings indicate simpler regu- lation and stronger protection of property RECOVERY RATE rights. More complex aggregation methods— The recovery rate is recorded as cents on such as principal components and unobserved the dollar recouped by creditors through the components—yield a nearly identical ranking. bankruptcy, insolvency or debt enforcement note. The choice of aggregation method has proceedings. The calculation takes into ac- little influence on the rankings because the 10 count whether the business emerges from the sets of indicators in Doing Business provide proceedings as a going concern as well as costs sufficiently broad coverage across topics. So and the loss in value due to the time spent Doing Business uses the simplest method. closing down. If the business keeps operat- The ease of Doing Business index is ing, no value is lost on the initial claim, set limited in scope. It does not account for an at 100 cents on the dollar. If it does not, the economy's proximity to large markets, the initial 100 cents on the dollar are reduced to quality of its infrastructure services (other 70 cents on the dollar. Then the official costs than services related to trading across orders of the insolvency procedure are deducted (1 or construction permits), the security of prop- cent for each percentage of the initial value). erty from theft and looting, macroeconomic Finally, the value lost as a result of the time conditions or the strength of underlying in- the money remains tied up in insolvency stitutions. There remains a large unfinished proceedings is taken into account, including agenda for research into what regulation con- the loss of value due to depreciation of the stitutes binding constraints, what package of hotel furniture. Consistent with international reforms is most effective and how these issues accounting practice, the depreciation rate for are shaped by the context of an economy. The furniture is taken to be 20%. The furniture is Doing Business indicators provide a new em- assumed to account for a quarter of the total pirical data set that may improve understand- value of assets. The recovery rate is the pres- ing of these issues. ent value of the remaining proceeds, based on Doing Business also uses a simple end-2007 lending rates from the International method to calculate the top reformers. First, Monetary Fund’s International Financial Sta- it selects the economies that implemented tistics, supplemented with data from central reforms making it easier to do business in 3 banks. The recovery rate for economies with or more of the 10 Doing Business topics. One “no practiceâ€? is zero. reform is counted per topic. For example, if an 36 DOING BUSINESS IN VENE TO 2009 Doing business indicators Global Padua best practice (Veneto) Rome EU average G7 average BRICs average Ease of doing business (rank) 1–SINGAPORE 67 68 37.6 21.9 112.5 STARTING A BUSINESS (RANK) 1–NEW ZEALAND 47 53 55.3 35.6 116 Procedures (number) 1 6 6 6.2 5.9 13.3 Time (days) 1 7 10 17.2 11.7 62.8 Cost (% of income per capita) 0.4 17.1 17.8 5.2 4.8 22.3 Min. capital (% of income per capita) 0 9.7 9.7 30.3 7.4 40.1 DEALING WITH CONSTRUCTION 1–ST. VINCENT AND THE GRENADINES 80 83 61.7 38.7 150 PERMITS (RANK) Procedures (number) 11 14 14 17.1 15.1 32.3 Time (days) 74 273 257 184.9 134.3 418.8 Cost (% of income per capita) 8.4 109.2 136.4 83 60.4 943.1 EMPLOYING WORKERS (RANK) 1–UNITED STATES 75 75 102.4 61.3 105.5 Difficulty of hiring index (0–100) 0 33 33 32.4 22.1 30.5 Rigidity of hours index (0–100) 0 40 40 56 28.6 40 Difficulty of firing index (0–100) 0 40 40 33.2 22.9 40 Rigidity of employment (0–100) 0 38 38 40.5 24.7 36.8 Firing costs (weeks of wages) 0 11 11 27.1 23.7 50.3 REGISTERING PROPERTY (RANK) 1–SAUDI ARABIA 79 93 66.2 61.1 73.8 Procedures (number) 2 8 8 5.2 5.6 7.5 Time (days) 2 19 27 61.1 34.9 42 Cost (% of property value) 0 4.4 4.6 4.5 3.9 3.4 GETTING CREDIT (RANK) 1–MALAYSIA 84 84 41.6 26.6 70 Legal rights index (0–10) 10 3 3 6.6 6.7 5 Credit information index (0–6) 6 5 5 4.5 5.6 4.3 Private bureau coveage (% of adults) 52.9 11.8 11.8 11.1 5.8 19.8 Public bureau coverage (% of adults) .. 74.9 74.9 35.8 78.5 20.7 PROTECTING INVESTORS (RANK) 1–NEW ZEALAND 53 53 64.8 35 71 Disclosure index (0–10) 10 7 7 5.9 7.7 7.3 Director liability index (0–10) 9 4 4 4.4 5.9 3.5 Shareholder suits index (0–10) 10 6 6 6.4 6.9 5.3 Investor protection index (0–10) 9.7 5.7 5.7 5.6 6.8 5.3 PAYING TAXES (RANK) 1–MALDIVES 133 128 72.4 68 145 Payments (number) 1 15 15 18.4 11.7 25.5 Time (hours) 0 351 334 253.1 204 955.8 Profit tax (%) 0 28 28 13.2 23.3 16.7 Labor tax and contributions (%) 0 43.2 43.2 29.8 23.7 37.4 Other taxes (%) 9.1 2.1 2.1 3 5.5 13.3 Total tax rate (% profit) 9.1 73.6 73.3 46 52.5 67.4 TRADING ACROSS BORDERS (RANK) 1–SINGAPORE 47 60 38.5 28.1 97.8 Documents for export (number) 4 5 5 4.6 3.7 7.8 Time for export (days) 5 16 20 12.4 10.3 22 Cost to export (US$ per container) 456 1,204 1,305 1,053 1,124.9 1,198.8 Documents for import (number) 4 5 5 5.4 4.3 8.8 Time for import (days) 3 15 18 13.4 10.9 24.8 Cost to import (US$ per container) 439 1,201 1,305 1,112.4 1,266.7 1,232.5 ENFORCING CONTRACTS (RANK) 1–HONG KONG, CHINA 156 156 41.6 40.6 79 Procedures (number) 24 41 41 31.3 32.7 40.5 Time (days) 211 1,808 1,210 540.6 503.6 680.8 Cost (% of debt) 14.5 27.3 29.9 19.8 19.9 20.2 CLOSING A BUSINESS (RANK) 1–JAPAN 26 27 39 18.4 104.5 Time (years) 0.6 2 1.8 2.1 1.3 4.9 Cost (% of estate) 4 14.5 22 10.7 8.6 13 Recovery rate (cents on the dollar) 92.5 60.9 56.6 56 70.8 22.8 G7 = Canada, France, Germany, Italy, Japan, the United Kingdom and the United States BRICs = Brazil, Russian Federation, India and China 37 Indicator Procedure 3. Buy corporate books and accounting books Time: 1 day Procedure 6. Notify the competent Labor Office the employment of workers Time: 1 day details Cost: € 134 for authentication fees for corporate books, including: € 14.62. stamp fee for each 100 pages, € 30 Cost: no charge Comments: The employer shall notify the Provincial registration fee for each 500 pages Labor Office (Centro per l'Impiego della Provincia di Comments: According to Article 2478 of the Italian Padova - CPI) about the hiring of personnel within 5 Civil Code, a limited liability company must keep the days from the start of the labor relationship. following corporate books: shareholders’ register, minute book of shareholders’ meetings, minute book of board of directors’ meetings, and minute book of board of auditors’ meetings (the last one is mandatory Dealing with for companies with capital of €120,000 and above). construction permits For each accounting and corporate book, the company pays a € 14.62 for stamp fee (for each 100 pages) and a City: Padua € 30 registration fee (for each 500 pages). Value of project: € 1,040,000 The company must also keep the accounting books indicated in section 2214 of the Italian Civil Code, i.e. Procedure 1. Obtain project clearance journal book and inventory book. The company must from the Fire Department not authenticate accounting books (according to Law No. 383/2001). All books are available in standard Time: 45 days (90 days if the project is complicated) format at stationary supplies stores or through a Starting a business notary public. However, entrepreneurs can also use a Cost: € 441.81 Comments: Before construction, BuildCo must deliver MPPTFtMFBGCPPLBUOPBEEJUJPOBMDPTU project design drawings to the Fire Department in City: Padua The books may be duly stamped by either the notary order to obtain a declaration of compliance. If Fire Standard company legal form: limited liability com- public or the Registry of Enterprises. Stamp duties may Department’s declaration is not released within 45 pany (società a responsabilità limitata, s.r.l.) be paid directly to the notary or to the Office of the days (or 90 days in case of complicated projects), the Minimum capital requirement: € 10,000 Registry of Enterprises. project must be considered rejected. Minimum paid-up capital requirement: € 2,500 Procedure 4. Pay government grant tax to Procedure 2. Obtain a building permit Procedure 1. Deposit with a bank at least the post office current account Time: 135 days 25% of the amounts contributed in cash Time: 1 day Cost: € 15,366.62 Time: 1 day Cost: € 309.87 Comments: The application for a building permit is Cost: nominal (bank commission) Comments: The tax is due to the Office of Revenue filed with the Municipalilty of Padua. The company Comments: At incorporation, 25% of the company’s every year. For companies with capital below must file proof of title of ownership to the property for capital contributed in cash must be paid in and € 516,456.90 the fee is € 309.87. For companies with which the permit is requested, as well as the project deposited in a bank account. The payment of the capital exceeding € 516,456.90 the fee is € 516.46. design drawings signed by an engineer or an architect, capital may be replaced by an insurance policy or by a including the drawings relating to electric system, bank guarantee for at least the same amount, though Procedure 5. Register with the Registry of heating and air conditioning system, water and drain- it is possible for the quota holders to pay in the due Enterprises (Registro delle Imprese) at the ing system and the certificate of thermal insulation's amount at any time. If the company capital is not class. The Municipality then requests project clearance Padua Chamber of Commerce to the Public Health Agency. wholly paid in at incorporation, the company has a credit against the founding shareholders for payment Time: 2 days The fees for the issuance of the warehouse's building of the outstanding portion of the capital. The directors Cost:û JODMVEJOHû SFHJTUSBUJPOUBY  û permit are calculated on the urbanization costs sus- have power to claim the payment at any time. SFHJTUSBUJPOXJUIUIF$IBNCFSPG$PNNFSDF  û tained by the municipality and on waste disposal. The (membership fees) urbanization costs and waste disposal's fees must be Procedure 2. Execute a public deed of Comments: The applicant can electronically file a paid upon issuance of the building permit. incorporation and company bylaws before single notice (Comunicazione Unica) with the Registry The fees are calculated for a warehouse located in the a public notary of Enterprises. This includes issuance of the tax iden- artisanal zone of Padua, and include: tification number, VAT number, and registration with t 1SJNBSZVSCBOJ[BUJPOû  Time: 1 day Social Security Administration (INPS) and Accident t 4FDPOEBSZVSCBOJ[BUJPOû  Cost: € 3,444 Insurance Office (INAIL). The company representative t 8BTUFEJTQPTBMû  Comments: A public deed of incorporation (atto costi- must attach the forms requested by (i) the Registry of t "EEJUJPOBMGFFTGFFTû BENJOJTUSBUJWFGFF û tutivo), including the company’s bylaws (statuto) must Enterprises for the registration (ii) the Italian Tax Au- 62 (clearance from the Public Health Agency), € 30 be drafted and executed before a public notary by the thorities for immediate starting of business, and (iii) by (technical inspection fee), € 14.62 (stamp duty), € 10 quota holders or their authorized representatives. INPS and INAIL for the registration with these agencies. (folder cost) The public notary drafts company bylaws on standard After the single notice is filed, the firm must by law The fee calculator is available on the website of the forms, which the notary provides. The cost of the forms receive all the documents within 7 days. All notices, Municipality of Padua: and stamp duties are included in the notary fees. communications and receipts of filing are sent to http://serviziweb.comune.padova.it/oneri/urbaniz- Registration tax, due within 20 days of incorporation, the company’s certified email address. In detail, the zazione.do is paid to the notary public, who will also provide the company receives: registered public deed of incorporation. t JNNFEJBUFMZ BSFGFSFODFOVNCFSGPSUIFSFHJTUSBUJPO Procedure 3. Pay building permit fees at procedure, the receipt of the filing of the single The costs include: notice with the Registry of Enterprises, as well as the t /PUBSZGFFû  7"5 tax identification number and the VAT number; t 4UBNQTBOEFYQFOTFTû JODMVEJOHûGPS t XJUIJOCVTJOFTTEBZT UIFDPOöSNBUJPOPGSFHJTUSB- electronic registration, € 45.90 for archive tax, € 156 tion with the Registry of Enterprises, the INAIL for stamps, and € 20 for postal expenses) documentation and the INPS documentation. Since January 2008, membership fees are fixed at € 200. (Interministerial decree of February 1, 2008, pub- lished in the Gazzetta Ufficiale n. 54, of March 3, 2008). 38 DOING BUSINESS IN VENE TO 2009 a bank Procedure 8. Apply for water and sewage Time: 1 day connection Cost: No charge Time: 1 day Comments: The building permit fees are to be paid at Cost: No charge a bank authorized by the Municipal Agency (Cassa di Comments: The company should contact the local Risparmio di Padova e Rovigo). authority to obtain the water and sewerage connec- tion. In Padua, the agency responsible for provision of Procedure 4. Hire an independent water and sewage connections is AceGas APS Padova. engineer to test structure and utilities BuildCo has to address to AceGas APS Padova two dif- ferent applications: one for water and another one for Time: 1 day sewerage connection. Cost: € 6,875 Comments: The structure tests must be performed Procedure 9. Receive on-site inspection by an engineer or an architect not directly involved in and estimation of water and sewage the project. BuildCo must hire the engineer who tests installation costs the structures no later than 60 days after structures are completed. In addition to the final test on completed Time: 1 day structures, the work site director must provide test Cost: No charge results for the structural materials used to build the structures. In the case of reinforced concrete, the tests Procedure 10. Obtain water and sewage must be done on three samples taken on each day that installation concrete is poured and on one sample for each steel per file used in structures. The testing is based on per Time: 53 days files traction and compression resistance and must be Cost: € 3,720 done by an authorized testing lab. Comments: The cost of water connection is € 3,600 The cost of each test is € 25. When structures are and sewage connection € 120. completed, at least two load tests must be done on the warehouse's floors. The cost of each test is € 2,000. For Procedure 11.* Apply for electricity the warehouse in this case, BuildCo can expect to pay € connection 875 for the structural lab tests (about 35 in total) and € 4,000 for the load tests. Time: 1 day Cost: No charge Procedure 5. Receive on-site inspection by Comments: The company should apply for power the Fire Department connection with the electricity provider. The agency Time: 1 day responsible for provision of electricity connections in ENEL Servizio Elettrico S.p.a. Cost: € 673.81 Comments: In order to obtain the occupancy permit, Procedure 12.* Receive on-site inspection the warehouse must be inspected by the Fire Depart- and obtain estimation of electricity ment. connection costs by local electricity Procedure 6. Obtain an occupancy provider certificate Time: 1 day Time: 30 days Cost: No charge Cost: € 14.62 Procedure 13.* Obtain power connection Comments: Within 15 days of the building's comple- tion, the builder should file with the Municipality installation an application for occupancy certificate and: a) the Time: 15 days request for cadastral registration; b) the work site Cost: € 464 director's statement attesting the compliance of the building with the project's specifications; c) the Fire Procedure 14.* Obtain telephone Department's authorization or prevention set on fire's certificate; d) the conformity certificate issued by the connection Regional Office or approved by the Municipality; e) the Time: 15 days work site director's statement (or the trained techni- Cost: € 480 cian’s statement) attesting the compliance of the build- ing with measures to overcome architectural barriers; Comments: The company should contact the telecom- f) the conformity statement attesting the compliance munication provider (TELECOM S.p.a.) to obtain a of utilities with specifications of the Ministerial Decree telephone connection. n. 37/2008 and Law n. 311/07; g) registry certification of municipal numeration. The Municipality issues the * This procedure can be completed simultaneously occupancy certificate within 30 days after the applica- with previous procedures tion is filed. Procedure 7. Register the building Time: 5 days Cost: € 210 INDICATOR DE TAILS 39 Employing workers Answer Score Rigidity of employment index 38 Difficulty of hiring index 33 Are fixed-term contracts prohibited for permanent tasks? Yes 1 What is the maximum duration of fixed-term contracts (including renewals)? (in months) No limit 0.0 What is the ratio of mandated minimum wage to the average value added per worker? 0.00 0.00 Rigidity of hours index 40 Can the work week extend to 50 hours (including overtime) for 2 months per year to respond to a seasonal increase in production? Yes 0 What is the maximum number of working days per week? 6 0 Are there restrictions on night work? Yes 1 Are there restrictions on “weekly holidayâ€? work? Yes 1 What is the paid annual vacation (in working days) for an employee with 20 years of service? 20 0 Difficulty of firing index 40 Is the termination of workers due to redundancy legally authorized? Yes 0 Must the employer notify a third party before terminating one redundant worker? No 0 Does the employer need the approval of a third party to terminate one redundant worker? No 0 Must the employer notify a third party before terminating a group of 25 redundant workers? Yes 1 Does the employer need the approval of a third party to terminate a group of 25 redundant workers? No 0 Is there a retraining or reassignment obligation before an employer can make a worker redundant? Yes 1 Are there priority rules applying to redundancies? Yes 1 Are there priority rules applying to re-employment? Yes 1 Firing costs (weeks of salary) 10.8 What is the notice period for redundancy dismissal after 20 years of continuous employment? (weeks of salary) 10.8 What is the severance pay for redundancy dismissal after 20 years of employment? (weeks of salary) 0.0 What is the legally mandated penalty for redundancy dismissal? (weeks of salary) 0.0 Note: Results for Italy in Doing Business 2009. No subnational analysis was conducted in Veneto. 40 DOING BUSINESS IN VENE TO 2009 Procedure 4.* Notary verifies the powers Procedure 8.* Registration of the deed at Registering property of relevant signatories the Cadastre and Land Registry (Agenzia Time: 1 day (simultaneous with procedures 1, 2, 3, del Territorio) City: Padua and 5) Time: 1 day (simultaneous with procedure 7) Property value: € 1,293,152 Cost: € 17.50 (the fees can range from € 10 to € 30) Cost: € 51,726, including € 12,932 (3% of property Procedure 1.* Obtain copies of building Comments: The notary public checks the Registry value) for transcription tax and € 38,795 (1% of prop- and occupancy permits from the of Enterprises regarding the selling and purchasing erty value) for cadastral tax companies and verifies the powers of the relevant Comments: The notary public files the deed of sale Municipality signatories. Should it be required, according to the by- and the transcription note with the Land Registry. The Time: 9 days (simultaneous with procedures 2, 3, 4 laws of the selling or purchasing company, that a reso- copy of the deed with the registration date from the and 5) lution be adopted by the administrative body or by the Revenue Office (procedure 7) is sufficient to deposit Cost:û ûTUBNQEVUZGPSFBDITVSWFZ û shareholders’ meeting to authorize the transaction, an the deed in the Land Registry. BENJOJTUSBUJWFGFF ûTVSWFZPSTGFF extract of the minutes of said resolution, certified by a The Land Registry delivers immediately a receipt notary public, shall be provided. The Chamber of Com- with the date and registration numbers. The Land Comments: The notary obtains a copy of the Build- merce's certificate can be requested online. Registry has the purpose of rendering deeds enforce- ing Permit, Occupancy Permit and of application(s) for Building Amnesty, if any, from the Municipality. able towards all third parties. Until a deed has been Otherwise, the seller might provide them. Should Procedure 5.* Authentication of seller’s registered in the Land Registry, it is only enforceable those documents not be available the seller requests documents between the parties thereto. The Italian Land Registry copies from the Municipality. This can be done by an Time: 3 days (simultaneous with procedures 1, 2, 3, system is based on the principle of continuity of the instructed surveyor normally appointed and paid by and 4) registrations (continuità delle trascrizioni). This means the seller. It is not necessary to produce the Building that an individual or an entity may sell a property only Permit for buildings erected prior to the year 1967. Cost: € 10 if the relative deed of purchase has been registered Should a copy of such document not be available for Comments: The seller must provide the buyer with: beforehand in the Land Registry. buildings erected after that year it is sufficient that the (i) an authenticated copy of the seller's purchase Registration at the cadastral office takes place seller mentions in the deed of conveyance the data documents and automatically after registering the deed at the Land of the relevant Building Permit, as long as the notary (ii) an authenticated copy of the Transcription Note Registry, which the notary public does. warns of the criminal sanctions which apply in case of The documents are authenticated by a notary public, The notary also collects all due taxes from the false and reticent statements. at a cost of about € 10. As of July 2006, all payments parties and pays them through a bank transfer to the must be made with check or bank transfer, and the no- various public administration offices. In the case of Procedure 2.* Obtain necessary surveys tary must indicate these details (check number, bank a warehouse used for commercial purposes, sold by from Land Registry account, etc.) in the deed; in the same way in the final a company that is not in the construction business deed parties have to indicate all amounts paid to real the cadastral tax is equal to 1% of sale price, and the Time: 5 days (simultaneous with procedures 1, 3, 4 estate agents. This increases slightly the time needed and 5) transcription tax is equal to 3% of sale price. to complete this procedure. The notary then delivers a copy of the deed of sale and Cost: € 325 (cost of examination of surveys at the Land Registry), notary fees included in procedure 6 transcription note to the parties. Procedure 6. A notary public drafts and Comments: The notary public obtains a report from executes the deed of sale the Land Registry stating: * This procedure can be completed simultaneously (i) the ownership situation of the property in the last Time: 8 days with previous procedures twenty years, and Cost:û  û OPUBSZGFFT 7"5 û (ii) that the property is free from any encumbrances. GPSTUBNQT ûGPSBSDIJWFTUBNQ ûGPS The notary needs to verify the Land Registry files (usu- transcription tax) ally by means of an instructed surveyor) and extract Comments: The notary public prepares and executes the relevant information, that are then included in the the deed of sale. report and are certified as truthful by the notary, since The Ministerial Decree of 21 November 2001 estab- the issuance of an actual certificate from the Land lished the minimum fees for notary services at national Registry would require an extremely long time. level. Procedure 3.* Obtain necessary surveys Procedure 7.* Registration of the deed at from the Cadastre the Revenue Office (Agenzia delle Entrate) Time: 3 days (simultaneous with procedures 1, 2, 4, Time: 2 days and 5) Cost: € 168 (registration tax) Cost: € 50 for cadastral certificate, other documents Comments: The notary public files on line the deed are free of sale and the transcription note (the file is called Comments: The notary public obtains from the “Modello Unicoâ€?), with the Revenue Office correspond- Cadastre: ing to the location of the property, within the 30th day (i) historical cadastral situation and Cadastral Certifi- after the signature of the contract. cate (€ 50, normally requested online) The notary will receive immediately a receipt with the (ii) Cadastral Maps of the premises and maps of the date of registration, while the number of registration land (general map including the land) will be given after approximately 2 days. The notary Since the cadastral data are available online it is then delivers a copy of the deed of sale and transcrip- possible to obtain a cadastral situation immediately, tion note to the parties. while the maps need to be requested to the Cadastral The Revenue Office has the purpose of granting deeds Offices. a certified date (data certa) and collecting the relative taxes. The "VAT Alternative Principle" states that either a property deed is subject to VAT (therefore having to pay the fixed registration tax) or to proportional Deed Registration Tax. As the envisaged deed is subject to 20% VAT, upon registration in the Revenue Office, only a fixed tax is due. Otherwise, a proportional Deed Registration Tax would be due (the ordinary rate is 7% of the consideration, which, in specific cases, can be reduced up to 1%). INDICATOR DE TAILS 41 Getting credit Private credit bureau Public credit registry Score Credit information index 5 Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative data distributed? Yes Yes 1 Does the registry distribute credit information from retailers, trade creditors or utility companies as well as No No 0 financial institutions? Are more than 2 years of historical credit information distributed? Yes Yes 1 Are data on all loans below 1% of income per capita distributed? Yes Yes 1 Is it guaranteed by law that borrowers can inspect their data in the largest credit registry? Yes Yes 1 Coverage 74.9 11.8 Number of individuals .. 4,732,260 Number of firms .. 1,280,170 Legal rights index 3 Can any business use movable assets as collateral while keeping possession of the assets; and any financial institution accept such assets as collateral? Yes Does the law allow businesses to grant a non possessory security right in a single category of revolving movable assets, without requiring a specific description of No the secured assets? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of the secured assets? No May a security right extend to future or after-acquired assets, and may it extend automatically to the products, proceeds or replacements of the original assets? Yes Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations and debts can be secured by stating a maximum Yes amount rather than a specific amount between the parties? Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the grantor's name of a security right? No Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? No Do secured creditors have absolute priority to their collateral in bankruptcy procedures? No During reorganization, are secured creditors' claims exempt from an automatic stay on enforcement? No Does the law authorize parties to agree on out of court enforcement? No Note: Results for Italy in Doing Business 2009. No subnational analysis was conducted in Veneto. 42 DOING BUSINESS IN VENE TO 2009 Protecting investors Disclosure index 7 What corporate body provides legally sufficient approval for the transaction? (0-3) 1 Immediate disclosure to the public and/or shareholders (0-2) 2 Disclosures in published periodic filings (0-2) 2 Disclosures by Mr. James to board of directors (0-2) 2 Requirement that an external body review the transaction before it takes place (0=no, 1=yes) 0 Director liability index 4 Shareholder plaintiff's ability to hold Mr. James liable for damage the Buyer-Seller transaction causes to the company. (0-2) 1 Shareholder plaintiff's ability to hold the approving body (the CEO or board of directors) liable for damage to the company. (0-2) 1 Whether a court can void the transaction upon a successful claim by a shareholder plaintiff (0-2)) 0 Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff (0=no, 1=yes) 1 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff (0=no, 1=yes) 0 Whether fines and imprisonment can be applied against Mr. James (0=no, 1=yes) 0 Shareholder plaintiff's ability to sue directly or derivatively for damage the transaction causes to the company (0-1) 1 Shareholder suits index 6 Documents available to the plaintiff from the defendant and witnesses during trial (0-4) 4 Ability of plaintiffs to directly question the defendant and witnesses during trial (0-2) 1 Plaintiff can request categories of documents from the defendant without identifying specific ones (0=no, 1=yes) 0 Shareholders owning 10% or less of Buyer's shares can request an inspector investigate the transaction (0=no, 1=yes) 1 Level of proof required for civil suits is lower than that for criminal cases (0=no, 1=yes) 0 Shareholders owning 10% or less of Buyer's shares can inspect transaction documents before filing suit (0=no, 1=yes) 0 Investor protection index 5.7 Note: Results for Italy in Doing Business 2009. No subnational analysis was conducted in Veneto. INDICATOR DE TAILS 43 Paying taxes City: Padua Tax or mandatory Payments Notes on Time Statutory Tax Total tax rate Notes on contribution (number) Payments (hours) tax rate base (% profit) TTR Social security contributions 1 online filing 266 34.19-39.3% gross salaries 43.2 Corporate income tax (IRES) 1 online filing 37 33.0% taxable profit 20.1 Difference between Regional tax on productive activities 1 online filing - 4.3% taxable revenues and 7.8 (IRAP) deductible costs Fuel tax 1 - various rates per liter 1.1 Property tax (ICI) 1 online filing - 0.7% cadastral value of property 1.2 not Tax on interest 0 withheld - 27.0% interest income 0.7 included û PGQSFWJPVT Business license 1 - previous year turnover 0.1 year turnover Fixed tax on legal and fiscal registries 1 - EUR 516 fixed fee 0 Stamp duty on property transfer 1 - fixed fee 0 per account held at an Tax on check transactions 1 - € 74 0 Italian Bank small Stamp duty on contracts 1 - various rates pages of contracts amount not Value added tax (VAT) 1 online filing 48 20.0% value added and land included small Vehicle tax 1 online filing - various rates vehicle KW amount small Tax on insurance contracts 1 - various rates insurance premium amount small Advertising tax 1 - various rates type of advertising amount small Environmental tax 1 - various rates amount Totals: 15 351 73.6 Trading across borders Padua trading through the Port of Venice Time Cost Exporting (days)* (US$ per container) Export documents Documents preparation 9 363 t #JMMPGMBEJOH Customs clearance and technical control 1 80 t $FSUJöDBUFPGPSJHJO t $PNNFSDJBMJOWPJDF Ports and terminal handling 4 240 t $VTUPNTEFDMBSBUJPO Inland transportation and handling 2 521 t &YQPSUMJDFOTF Export total 16 1,204 Importing Import documents Documents preparation 9 375 t #JMMPGMBEJOH t $FSUJöDBUFPGPSJHJO Customs clearance and technical control 2 105 t $PNNFSDJBMJOWPJDF Ports and terminal handling 2 200 t $VTUPNTEFDMBSBUJPO Inland transportation and handling 2 521 t *NQPSUMJDFOTF Import total 15 1,201 *for comparison reasons, the figures may be rounded up or down. 44 DOING BUSINESS IN VENE TO 2009 Enforcing contracts Court information: Tribunale Civile di Padova Value of claim: EUR 51,726 Procedures (number) 41 Time (days) 1,808 Filing and service 30 Trial and judgment 1,406 Enforcement of judgment 372 Cost (% of claim) 27.3 Attorney cost 17.7 Court cost 7.2 Enforcement cost 2.5 Closing a business City: Padua Time (years) 2 Cost (% of estate) 14.5 Recovery rate (cents on the dollar) 60.9 Note: For details on the methodology please see the Data Notes. 45 Acknowledgements Doing Business in Veneto 2009 was The report was requested by the prepared by Zenaida Hernandez Uriz Government of the Veneto Region and Joanna Kata-Blackman. Jacqueline and coordinated by Christian Sottana, den Otter led the trading across borders Private Sector Liaison Officer to the indicator. Marialisa Motta, Alessio World Bank Group for Italy – Informest. Zanelli and Christian Sottana reviewed Technical and organizational support the full text. Valuable comments were was provided by the Research Centre received from Rajul Awasthi, Frederic of Unioncamere del Veneto, the union Bustelo, César Chaparro Yedro, Roger of Veneto's Chambers of Commerce, in Coma Cunill, Alejandro Espinosa- particular Gian Angelo Bellati, Sergio Wang, Andrés Federico Martínez, Ankur Donin, Serafino Pitingaro, Grazia Sartor, Huria, Jean Michel Lobet, Oliver Lorenz, Laura Speranza and Alessio Zanelli. Joanna Nasr, Dana Omran, Caroline Otonglo, Rita Ramalho, Yara Salem, Uma The team wishes to express its special Subramanian, Tea Trumbic, Justin Yap gratitude to the 80 lawyers, notaries, and Lior Ziv. Valuable assistance was accountants, architects, engineers, freight received from Diego Borrero Magaña, forwarders, judges and public officials who Claudia Contreras, Aikaterini Leris and generously participated in this project. Brice Richard. The report was copy-edited The names of those contributors who by Cintra Scott and designed by Tom have agreed to be publicly acknowledged McCarthy and Gerry Quinn. Desktop are listed on the following page. publishing services were provided by Alexandra Quinn. 46 DOING BUSINESS IN VENE TO 2009 P U B L IC OF F IC IA L S A N D BU SI N E S S AS S O C IAT I ON S AGENZIA DELLE DOGANE CHAMBER OF COMMERCE OF CORTE DI APPELLO DI VENEZIA TRIBUNALE DI PADOVA Paolo Di Roma PADUA Manuela Romei Pasetti Mario Fabiani Direttore Regionale (Veneto) Alessandro Selmin Presidente della Corte di Appello Presidente del Tribunale di Padova Segretario Generale di Venezia Michele Ventriglia Daniela Bruni Direttore Ufficio di Padova Roberta Tonellato Giudice Dirigente Area Anagrafica - ORDiNE DEGLI INGEGNERI Giuseppe Velleca Conservatore del Registro Imprese DELLA PROVINCIA DI PADOVA Audit Interno - Direzione Fabio Bonfà regionale veneto Liana Benedetti Capo Servizio Presidente Pasquale Marotta Audit Interno - Direzione PADOVA PROMEX - SPECIAL regionale veneto COMUNE DI PADOVA AGENCY OF THE PADUA Luigi Mariani CHAMBER OF COMMERCE FOR AGENZIA DEL TERRITORIO Assessore all'Urbanistica e INTERNATIONAL ACTIVITIES Enrico Silvestri all'Edilizia Privata Franco Conzato Direttore Provinciale (Padova) Roberto Cruciato Direttore Responsabile SUAP P R I VAT E P ROF E S SI ONA L S APL ITALIA AGENCIES S.R.L GEFCO ITALIA S.p.A. 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