Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia Comparing Business Regulation for  Domestic Firms in 25 Cities in Croatia, the Czech Republic, Portugal and Slovakia with 186 Other Economies © 2018 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 19 18 17 16 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia Comparing Business Regulation for  Domestic Firms in 25 Cities in Croatia, the Czech Republic, Portugal and Slovakia with 186 Other Economies Resources on the Doing Business website Doing Business in the European Subnational and regional projects Union 2018: Croatia, the Czech Differences in business regulations at the Republic, Portugal and Slovakia subnational and regional level http://www.doingbusiness.org/EU2 http://www.doingbusiness.org /Subnational Current features News on the Doing Business project Historical data http://www.doingbusiness.org Customized data sets since DB2004 http://www.doingbusiness.org Rankings /custom-query How economies rank—from 1 to 190 http://www.doingbusiness.org/rankings Law library Online collection of business laws and Data regulations relating to business All the data for 190 economies—topic http://www.doingbusiness.org rankings, indicator values, lists of /Law-library regulatory procedures and details underlying indicators Entrepreneurship data http://www.doingbusiness.org/data Data on new business density (number of newly registered companies per 1,000 Reports working-age people) for 136 economies Access to Doing Business reports as well http://www.doingbusiness.org/data as subnational and regional reports, case /exploretopics/entrepreneurship studies and customized economy and regional profiles Distance to frontier http://www.doingbusiness.org/Reports Data benchmarking 190 economies to the frontier in regulatory practice and a Methodology distance to frontier calculator The methodologies and research papers http://www.doingbusiness.org underlying Doing Business /data/distance-to-frontier http://www.doingbusiness.org /Methodology Information on good practices Showing where the many good Research practices identified by Doing Business Abstracts of papers on Doing Business have been adopted topics and related policy issues http://www.doingbusiness.org/data http://www.doingbusiness.org/Research /good-practice Doing Business reforms Short summaries of DB2018 business regulation reforms and lists of reforms since DB2006 http://www.doingbusiness.org/Reforms iii Doing Business in the European Union 2018: AT A G LANC Croatia, the Czech Republic, Portugal and Slovakia E The latest subnational report of the Doing Business series in the European Union Full report: www.doingbusiness.org/EU2 D oing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia focuses on business This report contains data current as of February 15, 2018 and includes comparisons with other economies Doing Business measures aspects of regulation that enable or hinder entrepreneurs in starting, operating regulations and their enforcement in based on data from or expanding a business—and five Doing Business areas. It goes beyond Doing Business 2018: Reforming to provides recommendations and good Zagreb, Prague, Lisbon and Bratislava to Create Jobs. practices for improving the business benchmark 21 additional cities. environment. Five Doing Business indicator sets covering areas of local jurisdiction or practice Starting a business Getting electricity Records the procedures, time, cost and paid-in Records the procedures, time and cost required minimum capital required for a small or medium- for a business to obtain a permanent commercial size domestic limited liability company to electricity connection for a standardized formally operate; includes a gender dimension to warehouse; assesses the reliability of the account for any gender discriminatory practices. electricity supply and the transparency of tariffs. Dealing with construction permits Registering property Records the procedures, time and cost required Records the procedures, time and cost required for a small or medium-size domestic business to transfer a property title from one domestic to obtain the approvals needed to build a firm to another so that the buyer can use commercial warehouse and connect it to water the property to expand its business, use it and sewerage; assesses the quality control and as collateral or, if necessary, sell it; assesses safety mechanisms in the construction permitting the quality of the land administration system; system. includes a gender dimension to account for any gender discriminatory practices. Enforcing contracts Records the time and cost for resolving a commercial dispute through a local first-instance court, which hears arguments on the merits of the case and appoints an expert to provide an opinion on the quality of the goods in dispute; assesses the existence of good practices in the court system. CROATIA: Osijek, CZECH REPUBLIC: Brno, PORTUGAL: Braga, Coimbra, SLOVAKIA: Bratislava, 25 Rijeka, Split, Liberec, Olomouc, Ostrava, Evora, Faro, Funchal, Lisbon, Kosice, Presov, Trnava, cities Varazdin, Zagreb Plzen, Prague, Usti nad Labem Ponta Delgada, Porto Zilina Advantages and limitations of the Doing Business methodology Doing Business does not cover: Focus on the law and practice Reliance on expert respondents ✗ Security Makes the indicators “actionable” because Reflects knowledge of those with most ✗ Market size the law is what policy makers can change. experience. ✗ Macroeconomic stability ✗ State of the financial system Use of standardized case scenarios Focus on domestic and formal sector ✗ Prevalence of bribery and Enables comparability across locations, Keeps attention on the formal sector, where corruption but reduces the scope of the data. firms are most productive, but does not ✗ Level of training and skills of the reflect the informal sector or foreign firms. labor force A collaboration of the World Bank Group Global Indicators Group and World Bank country offices with the Agency for Investments and Competitiveness under the auspices of the Ministry of Economy, Entrepreneurship and Crafts of Croatia; the Ministry of Trade and Industry of the Czech Republic; the Ministry of the Presidency and Administrative Modernisation of Portugal; and the Ministry of Economy and Ministry of Finance of Slovakia. Funded by the European Commission, Directorate-General Regional and Urban Policy. iv Contents Foreword vii Overview 1 What are the main findings? 2 What’s next? 9 Starting a Business 18 How does starting a business work in the four member states? 19 What can be improved? 26 Dealing with Construction Permits 32 How does construction permitting work in the four member states? 33 What can be improved? 40 Getting Electricity 45 How does getting electricity work in the four member states? 46 What can be improved? 53 Registering Property 57 How does registering property work in the four member states? 59 What can be improved? 66 Enforcing Contracts 70 How does contract enforcement work in the four member states? 71 What can be improved? 79 About Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia 83 Data Notes 96 City Snapshots 119 Indicator Snapshots 132 Indicator Details 137 Starting a business 137 Dealing with construction permits 141 Getting electricity 160 Registering property 167 Enforcing contracts 173 Acknowledgments 176 Boxes 1.1 What does Doing Business in the European Union measure? 2 1.2 How has peer-to-peer learning worked in other EU member states? 10 1.3 SIMPLEX: combining e-government and red tape reduction initiatives in Portugal 13 2.1 How reducing minimum capital requirements paid off in the Czech Republic 28 v 2.2 Rolling out a platform for providing e-government services in Slovakia 30 2.3 E-government in the Czech Republic: using data boxes to enhance business communications 30 5.1 Going electronic in property registration—an EU example of good practice from Denmark 68 6.1 A new era for the enforcement function in Portugal 77 6.2 Electronic filing to be rolled out to all Croatian courts 79 vi vii Foreword Cohesion policy, the European Union’s resources to deal with these administra- ƒƒ The biggest differences within each main investment policy, has a bigger tive demands quickly. country occur in the areas of dealing impact on economic development in with construction permits, getting regions with a good business environ- This report is the second in a series of sub- electricity and enforcing contracts. ment. The Doing Business reports show, national doing reports covering European For example, for getting electricity however, that there remain substantial Union Member States at the sub-national Zilina in Slovakia scores better than differences in the business environment level funded by the Directorate-General Austria—high enough to rank in the between and within EU member states. for Regional and Urban Policy. The first top 10 EU member states. Meanwhile, In regions where firms face higher costs report, published in 2017, covered Bulgaria, Trnava, another city in Slovakia, scores and longer delays, regional development Hungary and Romania. The ambition is below the EU average. strategies will struggle to encourage to continue this series until all member ƒƒ Because the Doing Business global more entrepreneurship and investments. states with at least 4 million inhabitants ranking is based on the performance Without more investments and start-ups, have been covered. of the capital city, improvements in the multiplier effect of regional develop- Zagreb and Bratislava would lead to ment policies will be limited. Some of the results of this report stand higher ranking of Croatia and Slovakia, out. respectively. If Zagreb were to repli- Cohesion policy invests the bulk of its ƒƒ All four countries would benefit from cate the best performances recorded funding in less developed regions and reducing procedural complexity. Most across the five cities in the five areas countries, which tend to have a less favour- cities benchmarked in this report have measured here, Croatia would rise able business environment. As a result, processes for starting a business and to 40 in the global ranking of 190 reducing the delays and costs faced by dealing with construction permits economies on the ease of doing busi- firms will be critical to help these regions that are more complex than the EU ness—11 places higher than its current and countries catch up with the rest of average. ranking according to Doing Business the EU. Both the 7th Cohesion Report1 ƒƒ Portugal, among the four countries 2018. Similarly, if Bratislava adopted and the EC Report on Competitiveness benchmarked, has the most homo- all the good practices found within in low-income and low-growth regions2 geneous performance among its Slovakia, it would stand at 30 in the emphasized the need to improve public cities, suggesting relatively consistent global ranking of 190 economies on administration and make procedures more implementation of regulations across the ease of doing business—9 places transparent and efficient. the country. In contrast, the Czech higher than Slovakia’s current ranking Republic and Croatia show the largest according to Doing Business 2018. We are pleased to have joined forces with subnational differences. the World Bank and the governments of ƒƒ Doing business is easier in the smaller We hope this report will help member Croatia, the Czech Republic, Portugal and cities in Croatia, while in the Czech states, regions and cities to identify their Slovakia to conduct this study in 25 cities Republic, the biggest cities, Prague and key bottlenecks and find good practices —focusing on the regulatory system, the Brno, perform better than their smaller to improve their business environment. nature of business governance and the peers. In fact, Prague is the only capital efficacy of the bureaucracy. Improving that is ranked first within its country. Marc Lemaitre, the ease of doing business is particularly Bratislava, Lisbon and Zagreb, all three Director General for Regional and Urban important for small and medium sized lag behind most of the smaller cities in Policy enterprises, as they often lack the their respective country. European Commission 1 http://ec.europa.eu/regional_policy/en/information/cohesion-report/ 2 http://ec.europa.eu/regional_policy/en/information/publications/reports/2017/competitiveness-in-low-income-and-low-growth-regions-the-lagging-regions-report viii Overview MAIN FINDINGS ƒƒ Performance varies substantially among the cities benchmarked in Croatia and the Czech Republic: in both countries those ranking at the top and bottom are separated by nearly six points in the distance to frontier score—a measure showing how far each city is from global best practices in absolute terms. ƒƒ Portugal shows the most homogeneous performance among its benchmarked cities, with the smallest difference (less than two points) in the distance to frontier score—suggesting relatively consistent implementation of regulations across the country. ƒƒ On average, the most marked differences in performance within each country are in the areas of dealing with construction permits, getting electricity and enforcing contracts. ƒƒ All four countries would benefit from reducing procedural complexity. Most cities benchmarked in this report have processes for starting a business and dealing with construction permits that are more complex than the average across the European Union’s member states. ƒƒ Prague is the only capital ranking at the top among its country’s benchmarked cities. Bratislava, Lisbon and Zagreb each lag behind most of the smaller cities within their own country. ƒƒ Reform-minded officials can make tangible improvements by replicating good practices in other cities in their country. By adopting all the good practices found at the subnational level, all four member states would move substantially closer to the frontier of regulatory best practices. For Croatia this would mean jumping 11 places—and for Slovakia, 9 places—in the Doing Business global ranking of 190 economies. 2 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA A chieving greater economic and productive, to operate internationally administrative processes and building social cohesion is among the and to attract foreign investment. the capacity of local institutions. main objectives of the European Union. This requires reducing dispari- Of the four countries, Portugal shows ties in development levels between EU WHAT ARE THE MAIN the most homogeneous performance regions, by helping those that are less FINDINGS? among its benchmarked cities, with the developed catch up. But economic smallest differences in the distance to development policies can deliver full The findings of this study reveal sub- frontier score—a measure showing how results only in an investment-friendly stantial variation in business regulation far each city is from global best practices environment. Creating a level playing among the four countries covered and in absolute terms as well as providing field for all economic actors is critical even among cities within the same coun- the basis for ranking. The Czech Republic to ensure that entrepreneurs with good try. These differences matter. A recent and Croatia have the biggest subnational ideas and energy can start and grow World Bank study shows that firms differences. businesses, generating employment. located in regions with a better business This is particularly important for small environment have stronger performance Moreover, while Bratislava, Lisbon and and medium-size firms, which make up in sales, employment and productivity Zagreb each lag behind most of the more than 98% of all businesses in the growth as well as in investment.2 smaller cities within their own country, EU and provide around two-thirds of the Prague ranks at the top among the Czech private sector jobs in nonbanking sectors, Many aspects of business regulation cities. On average, the most marked representing employment for 93 million analyzed in this report are nationally differences in performance within each people.1 legislated. But how regulation is imple- country are in the areas of dealing with mented may vary substantially among construction permits, getting electricity Business regulation that is clear, simple cities and regions (box 1.1). Moreover, and enforcing contracts. and coherent can provide the stable alongside the national legislative and predictable rules that these firms framework local authorities can estab- How does subnational need to function effectively, encourag- lish their own regulations, policies performance vary within ing long-term growth and sustainable and incentives, leading to sometimes Croatia? economic development. Conversely, important variations in the ease of doing On aggregate across the five regulatory excessive regulation can constrain the business. Differences in regulatory areas measured, Varazdin makes it easier ability of firms to reach the minimum performance among locations within to do business and Split more difficult size required to be competitive—under- the same country can help policy mak- (table 1.1). Viewed in isolation, the rank- cutting their chances to become more ers identify opportunities for improving ings of the five cities benchmarked in BOX 1.1 What does Doing Business in the European Union measure? Doing Business tracks business regulations that affect small and medium-size domestic companies across 190 economies. In its annual publication each economy is represented by its largest business city.a Doing Business reports at the subnational level yield a more nuanced picture, because many regulations and administrative measures are implemented or determined by local authori- ties. Coordinating across different levels of government and institutions is essential to reduce the regulatory burden on companies. This study is the latest in a series that aims to expand the benchmarking exercise to secondary cities in all EU member states with a population above 4 million, so as to give a more complete representation of the business and regulatory environment.b This edition covers 25 cities in Croatia, the Czech Republic, Portugal and Slovakia.c These four countries share a significant growth potential, a strong interest in convergence with the rest of the EU and a focus on improving the investment climate and encouraging private sector growth. The focus of the report is on indicator sets that measure the complexity and cost of regulatory processes, as well as the strength of legal institutions, affecting five stages in the life of a small to medium-size domestic firm: starting a business, dealing with construction permits, getting electricity, registering property and enforcing contracts through a local court. a. Eleven economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) are also represented by the second largest business city. The data for these 11 economies are a population-weighted average for the two largest business cities. b. Previous studies include World Bank, Doing Business in the European Union 2017: Bulgaria, Hungary and Romania (Washington, DC: World Bank, 2017), Doing Business in Poland 2015 (Washington, DC: World Bank, 2015), Doing Business in Spain 2015 (Washington, DC: World Bank, 2015) and Doing Business in Italy 2013 (Washington, DC: World Bank, 2013). c. Osijek, Rijeka, Split, Varazdin and Zagreb in Croatia; Brno, Liberec, Olomouc, Ostrava, Plzen, Prague and Usti nad Labem in the Czech Republic; Braga, Coimbra, Evora, Faro, Funchal, Lisbon, Ponta Delgada and Porto in Portugal; and Bratislava, Kosice, Presov, Trnava and Zilina in Slovakia. OVERVIEW 3 TABLE 1.1  Croatia’s smaller cities outperform their larger peers across the five regulatory areas measured Dealing with Starting a construction Getting Registering Enforcing business permits electricity property contracts Aggregate Average rank DTF score Rank DTF score Rank DTF score Rank DTF score Rank DTF score Rank DTF score City Population (1–5)a (0–100)a (1–5) (0–100) (1–5) (0–100) (1–5) (0–100) (1–5) (0–100) (1–5) (0–100) Varazdin 46,946 1 75.89 4 85.38 1 66.20 1 84.29 3 74.07 3 69.49 Osijek 105,921 2 75.68 3 85.50 2 61.10 4 81.70 1 75.86 1 74.24 Rijeka 121,975 3 74.45 2 87.59 2 61.10 2 82.87 2 75.02 4 65.67 Zagreb 801,349 4 72.47 5 82.49 4 54.77 5 80.43 3 74.07 2 70.60 Split 173,109 5 70.50 1 89.55 5 43.67 3 82.66 5 71.08 5 65.56 Sources: Doing Business database; for population data, Croatian Bureau of Statistics for Varazdin and Eurostat for the other cities. Note: The distance to frontier (DTF) score shows how far a location is from the best performance achieved by any economy on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia.” The data for Zagreb have been revised since the publication of Doing Business 2018. The complete data set can be found on the Doing Business website at http://www.doingbusiness.org. a. Based on the DTF scores for the five regulatory areas included in the table. Croatia may show unexpected results. property transfer applications by certified of Civil Procedure to front-load evidence As in other economies worldwide, some legal professionals—is another factor and set a schedule for anticipated hearings cities that appear less dynamic may rank behind Osijek’s top performance. Rijeka, a and pleadings where possible. surprisingly high, while larger business runner-up in four areas, lags behind only in centers appear to lag behind. The reason enforcing contracts. Third, the largest performance gaps is that Doing Business does not measure within Croatia are seen in dealing with all aspects of the business environment Second, there are substantial differences construction permits, enforcing contracts that matter to firms or investors—nor in regulatory performance among the five and starting a business (figure 1.1). For does it measure all factors that affect cities. Multiple regulatory reforms over the example, completing the construction competitiveness.3 years have led to inconsistencies in how permitting process for a simple warehouse regulation is implemented at the local level. in Varazdin takes 112 days and costs 5.3% A granular look at the rankings leads to Moreover, uneven transaction volumes of the warehouse value—half the time it several observations. First, no single city appear to affect performance in some takes in Split, at a third of the cost. Among excels in all five areas measured. Starting areas. In Split, for example, the heavy work- the reasons for these differences: the a business is easier in Split, where most load at the building department means a heavy workload at the building depart- limited liability companies are set up wait for a building permit that is three times ment in Split, high mandatory contribu- using a government service that simplifies as long as the average for the other cities: tions toward municipal infrastructure and start-up (HITRO.HR, or “single access three months rather than one. additional municipal requirements—such point”)—indeed, Split has the highest as a work safety inspection and a clear- take-up among the five cities.4 Dealing But not all cities with higher transaction ance from the waste collection depart- with construction permits is easier in volumes struggle. Zagreb completes prop- ment. With a distance to frontier score Varazdin. This city also leads in the area erty transfers almost one month faster than for dealing with construction permits of of getting electricity, thanks to a more Split does, despite a caseload four times 43.67, Split performs as poorly as the reliable power supply—with shorter and as large.5 Good management, well-trained economies ranking among the bottom 10 less frequent service interruptions than staff and efficient internal processes can percent globally. Meanwhile, Varazdin’s the other cities—and relatively short waits do much to alleviate issues associated score of 66.20 is above the global average. for a new connection. Osijek stands out for with higher volumes without necessarily its performance in the areas of registering requiring additional resources. Other EU For enforcing contracts Osijek has a dis- property and enforcing contracts—per- member states also offer good examples. tance to frontier score (74.24) that would haps predictably, given the lower caseload Take Poland, where trial time at the busy rank the city near the top among EU at the local land registry office and the regional court of Krakow is less than a member states, behind only Lithuania, smaller backlogs in its courts. But being at year—six months faster than in Gdansk or Austria and Estonia. Meanwhile, Split’s the forefront of regulatory reform—such Warsaw.6 Judges in Krakow follow national score (65.56) is below the EU average. as the piloting in February 2017 of new best practices and use active case manage- This is not surprising: cases in the com- software allowing online submission of ment, leveraging the provisions of the Code mercial court in Split typically take more 4 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA FIGURE 1.1  In Croatia the largest variations in regulatory performance are in dealing demonstrates the potential for large cit- with construction permits, enforcing contracts and starting a business ies to achieve regulatory efficiency and quality by capitalizing on economies Distance to frontier score (0–100) of scale and investing in administrative Starting a Dealing with Getting Registering Enforcing business construction electricity property contracts modernization. permits 100 Germany Of the four member states covered by Ireland (EU best) (EU best) this study, the Czech Republic shows the largest subnational difference at the Lithuania 90 Split Denmark (EU best) aggregate level: Prague, with the high- (EU best) est aggregate distance to frontier score Varazdin among the seven cities, and Liberec, with Lithuania the lowest, are separated by nearly six Zagreb (EU best) 80 Zagreb points (table 1.2). Osijek Osijek EU average The largest variation is in getting electric- ity (figure 1.2). This results mainly from 70 Split differences in the type of connection Varazdin most likely for a new warehouse like the Split one in the Doing Business case study. In five of the seven cities such a warehouse 60 typically connects to the medium-voltage network and requires a process involving greater time and cost than the EU average. Completing the connection process can 50 take nearly eight months (as in Usti nad Labem). The delays are due mainly to the Split time spent obtaining the multiple municipal 0 permits required. Moreover, the entrepre- Best performance in country Worst performance in country Country average neur needs to cover the entire up-front cost—including the purchase of a substa- Source: Doing Business database. Note: The distance to frontier score shows how far a location is from the best performance achieved by any economy tion—which can reach 283.2% of income on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier per capita (as in Ostrava). Only in Brno and of best practices (the higher the score, the better). The averages for Croatia are based on data for the five cities benchmarked in that country. The averages for the EU are based on economy-level data for the 28 EU member states. Prague is the warehouse likely to connect to the low-voltage network. This makes a sub- hearings to be resolved. Adjournments procedures and six days. In Zagreb, by stantial difference: in Prague the process and rescheduling add to the delays. And contrast, most new businesses are regis- can be completed in two months, at a cost obtaining expert opinions takes longer, tered in-person at the court.8 This takes of 25.9% of income per capita. with experts often submitting their eight procedures and more than three report past the deadline. As a result, weeks. Appreciable within-country differences resolving a commercial dispute in Split also emerge in starting a business, deal- takes nearly 11 months longer than it How does subnational ing with construction permits and enforc- does in Osijek, and Split has a backlog of performance vary within the ing contracts, three areas in which the cases that is nearly twice as high (with Czech Republic? Czech cities lag behind their EU peers. 15.9% of cases over three years old, Among the seven cities benchmarked Indeed, in these three areas even the best compared with 8.7% in Osijek).7 in the Czech Republic, it is the coun- performer among the Czech cities has a try’s three largest—Prague, Brno and distance to frontier score lower than the Similar differences emerge in the area of Ostrava—where doing business is easier EU average. starting a business as a result of differ- across the five areas measured. Prague ences in how companies are registered. ranks first in two areas (getting electricity Time is the main source of differences In Split more than half of new limited lia- and enforcing contracts), while Brno ranks among the Czech cities in the ease of bility companies are set up using HITRO. first in dealing with construction permits starting a business, and the registration HR services—and start-up requires six and Ostrava in registering property. This with the tax authority is what drives the OVERVIEW 5 TABLE 1.2  Across the five areas measured, doing business is easier in the Czech Republic’s largest cities Dealing with Starting a construction Getting Registering Enforcing business permits electricity property contracts Aggregate Average rank DTF score Rank DTF score Rank DTF score Rank DTF score Rank DTF score Rank DTF score City Population (1–7)a (0–100)a (1–7) (0–100) (1–7) (0–100) (1–7) (0–100) (1–7) (0–100) (1–7) (0–100) Prague 1,267,449 1 74.24 7 83.55 5 56.17 1 95.35 6 79.74 1 56.38 Brno 377,028 2 72.88 4 84.55 1 57.90 2 89.92 2 80.10 7 51.95 Ostrava 292,681 3 69.67 3 85.31 3 56.89 3 69.89 1 80.22 3 56.05 Plzen 169,858 4 69.13 4 84.55 6 55.38 4 69.67 6 79.74 2 56.32 Usti nad Labem 93,248 5 69.11 1 85.56 2 57.24 5 67.70 2 80.10 5 54.96 Olomouc 100,154 6 68.54 1 85.56 7 54.45 6 67.09 4 79.98 4 55.64 Liberec 103,288 7 68.28 2 84.55 4 56.67 7 66.32 4 79.98 6 53.86 Sources: Doing Business database; for population data, Eurostat. Note: The distance to frontier (DTF) score shows how far a location is from the best performance achieved by any economy on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia.” The data for Prague have been revised since the publication of Doing Business 2018. The complete data set can be found on the Doing Business website at http://www.doingbusiness.org. a. Based on the DTF scores for the five regulatory areas included in the table. variation. Income tax registration usually FIGURE 1.2  In the Czech Republic the largest variation in regulatory performance is in takes one to five days. But for value added getting electricity tax (VAT) registration, applicants can Distance to frontier score (0–100) wait from 10 days in Olomouc and Usti Starting a Dealing with Getting Registering Enforcing nad Labem to 18 days in Prague, where business construction permits electricity property contracts application volumes are highest. All the 100 Germany cities require the same eight procedures (EU best) Ireland Prague to open a business; among EU member (EU best) states, only Germany requires a higher Lithuania 90 Denmark number (nine). (EU best) (EU best) Olomouc, Usti nad Labem Dealing with construction permits Prague Ostrava Lithuania requires either 20 or 21 procedures, with (EU best) 80 the additional procedure being an infor- Plzen, Prague mational meeting that investors typically EU average request with the municipal environmental department to clarify potential environ- 70 mental impact assessment requirements. The number of preconstruction approv- Liberec als required in the Czech Republic, 13 on average, is the highest among EU 60 Brno member states. This causes substantial Prague delays. In Olomouc, where the process is slowest, dealing with construction Olomouc permits takes nine months. The process 50 Brno is faster in Brno, thanks to more efficient communication between the municipal- ity and developers and faster processing 0 times for obtaining a zoning permit and Best performance in country Worst performance in country Country average completing the required preconstruction approvals. Moreover, the utility com- Source: Doing Business database. Note: The distance to frontier score shows how far a location is from the best performance achieved by any economy on pany in Brno takes less time to identify each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier of best potential connection points because it practices (the higher the score, the better). The averages for the Czech Republic are based on data for the seven cities benchmarked in that country. The averages for the EU are based on economy-level data for the 28 EU member states. 6 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA has more up-to-date infrastructure maps Portugal, while Braga and Faro bring up the The differences in scores for dealing with than those in the other cities. rear. But the differences in aggregate per- construction permits mainly reflect varia- formance are less pronounced in Portugal tion in the time it takes to obtain all the Enforcing a contract takes the least than in the other three member states, approvals to build and start operating a amount of time in Prague, but even there suggesting relatively consistent implemen- commercial warehouse. While this pro- it takes more than 22 months—longer tation of regulations across the country. cess takes slightly more than five months than the EU average. In Brno the same Indeed, the aggregate distance to frontier in Porto, it takes almost nine months process takes over 5 months more. score differs by only 1.81 points between in Coimbra. The greater time require- Moreover, among EU member states, Ponta Delgada and Braga (table 1.3). ment in Coimbra stems from slower only the United Kingdom has a higher processing at municipal offices: getting cost for contract enforcement than the Nonetheless, differences do exist, and architectural projects approved can take Czech cities do. no city excels in all five areas. Porto up to six months. The delays are related ranks first in dealing with construction to more complicated local permitting In registering property the Czech cities permits but close to the bottom in reg- regulations (urbanization plans), which show homogeneous results—and all of istering property and enforcing contracts. require additional effort for harmoniza- them have a distance to frontier score Coimbra leads in getting electricity and tion with national building regulations. higher than the EU average. The results enforcing contracts, but lags behind in But they are also due to inefficiencies at vary only in the time the process takes, dealing with construction permits. Faro, the municipality. which depends mainly on the efficiency along with Funchal and Ponta Delgada, of the local cadastral office: the time tops the ranking in registering property, The process for getting electricity is required to register a property transfer but ranks last in getting electricity. most streamlined in Coimbra and Ponta like the one in the Doing Business case Delgada. There, customers go through study ranges from 23.5 days (in Ostrava) The performance of the Portuguese cities four procedures rather than the six to 27.5 days (in Plzen and Prague). varies the most in getting electricity and needed in Braga, Faro and Porto. In dealing with construction permits (figure Coimbra the local branch of the utility has How does subnational 1.3). In these two areas some of the cities implemented a georeferencing system performance vary within surpass the EU average while others lag that has eliminated the need for a site Portugal? behind. But in the areas of starting a busi- visit to determine the cost of the connec- On aggregate across the five regulatory ness, enforcing contracts and registering tion. And in Ponta Delgada customers areas measured, Ponta Delgada and Evora property all eight cities outperform the have no need to obtain a certification of lead the eight cities benchmarked in EU average. their building’s internal wiring; instead, TABLE 1.3  Differences in aggregate performance are minimal in Portugal—with less than two points between the highest and lowest ranking cities Dealing with Starting a construction Getting Registering Enforcing business permits electricity property contracts Aggregate Average rank DTF score Rank DTF score Rank DTF score Rank DTF score Rank DTF score Rank DTF score City Population (1–8)a (0–100)a (1–8) (0–100) (1–8) (0–100) (1–8) (0–100) (1–8) (0–100) (1–8) (0–100) Ponta Delgada 68,352 1 80.37 1 90.88 2 73.59 3 85.12 1 79.43 4 72.82 Evora 56,596 2 80.20 1 90.88 3 73.53 5 84.19 5 79.19 3 73.23 Funchal 104,813 3 80.18 1 90.88 6 72.83 4 84.96 1 79.43 4 72.82 Coimbra 134,348 4 79.59 1 90.88 8 65.93 1 87.49 6 79.07 1 74.60 Porto 948,613 5 79.51 1 90.88 1 74.04 6 82.71 7 78.59 7 71.32 Lisbon 1,842,352 6 79.34 1 90.88 5 73.10 2 86.45 8 78.35 8 67.91 Faro 61,073 7 78.97 1 90.88 4 73.42 8 78.83 1 79.43 6 72.28 Braga 181,182 8 78.56 1 90.88 7 66.58 7 82.27 4 79.31 2 73.78 Sources: Doing Business database; for population data, Statistics Portugal for Evora and Eurostat for the other cities. Note: The distance to frontier (DTF) score shows how far a location is from the best performance achieved by any economy on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia.” The data for Lisbon have been revised since the publication of Doing Business 2018. The complete data set can be found on the Doing Business website at http://www.doingbusiness.org. a. Based on the DTF scores for the five regulatory areas included in the table. OVERVIEW 7 FIGURE 1.3  In Portugal the largest variations in regulatory performance are in getting property transfer takes a single proce- electricity and dealing with construction permits dure—making Portugal one of only four countries in the world where only one Distance to frontier score (0–100) interaction is required. In Faro, Funchal Starting a Dealing with Getting Registering Enforcing business construction electricity property contracts and Ponta Delgada that procedure can permits 100 be done on a walk-in basis, within a few Germany (EU best) hours, at a local Casa Pronta service desk. Ireland (EU best) In the other cities an appointment usually 8 Portuguese cities has to be made first by phone, and the Lithuania 90 Denmark (EU best) wait can be as long as 8 days, as in Porto, (EU best) Coimbra or 10 days, as in Lisbon. Faro, Funchal, Lithuania Portugal also has a state-of-the-art one- Ponta Delgada (EU best) 80 stop shop and electronic platform for Faro Lisbon business start-up (see box 1.3 below). An Porto Coimbra entrepreneur can register a company and EU average complete the tax, social security and labor 70 registrations at a single contact point in Lisbon one or two hours. All the information is Coimbra automatically shared among the public agencies involved. Indeed, business reg- 60 istration can be completed on the spot, though in Lisbon and Porto an appoint- ment may need to be made in advance. 50 How does subnational performance vary within Slovakia? 0 For Slovak entrepreneurs, where they Best performance in country Worst performance in country Country average choose to establish their business matters for the regulatory hurdles they can expect Source: Doing Business database. Note: The distance to frontier score shows how far a location is from the best performance achieved by any economy to face. Starting a business is easier in on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier Presov or Zilina, where dealings with the of best practices (the higher the score, the better). The averages for Portugal are based on data for the eight cities benchmarked in that country. The averages for the EU are based on economy-level data for the 28 EU member states. tax authority to obtain a tax arrears form and register for VAT take eight days—one they can present terms of responsibility setting hearing dates. Lisbon and Porto week less than in Bratislava. Construction signed by their technician. are special cases, with metropolitan permitting is more efficient in Presov, areas that together account for more thanks mainly to a more streamlined Funchal has the fastest process for than half the Portuguese population. The process for obtaining location and building obtaining a new connection (50 days). courts in these cities hear large numbers permits and a shorter wait for a water and The utility reviews applications relatively of cases, many of them complex com- sewerage connection. Zilina leads in the quickly. And customers can simply sub- mercial cases that take longer to resolve. area of getting electricity, with a faster mit a notification that the internal wiring Overall, Portugal stands out for low up- and less costly connection process. Trnava is completed—rather than having to front enforcement costs: to start enforce- stands out for its performance in register- obtain an internal wiring inspection by a ment proceedings the creditor needs to ing property, a process completed there in specialized third-party firm, as required in advance only 0.5% of the claim amount less than a week—three times as fast as in continental Portugal. (less than EUR 200 as calculated for the Bratislava or Presov. And the district court Doing Business case study). in Kosice outperforms its peers through Among the Portuguese cities, Coimbra faster trial and judgment times. and Braga are the fastest in enforcing Of the five regulatory processes mea- contracts, thanks to shorter court delays sured, registering property and starting Bratislava lags behind most of the in appointing expert witnesses, obtaining a business are the most standardized in smaller Slovak cities in all five areas and commenting on their opinions and Portugal. In all eight cities registering a measured (table 1.4). This result could 8 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA TABLE 1.4  Except for Bratislava, all the cities in Slovakia rank at the top in at least one area Dealing with Starting a construction Getting Registering Enforcing business permits electricity property contracts Aggregate Average rank DTF score Rank DTF score Rank DTF score Rank DTF score Rank DTF score Rank DTF score City Population (1–5)a (0–100)a (1–5) (0–100) (1–5) (0–100) (1–5) (0–100) (1–5) (0–100) (1–5) (0–100) Presov 89,618 1 78.78 1 84.73 1 62.91 2 86.27 4 90.17 2 69.81 Kosice 239,141 2 78.19 4 83.72 3 60.74 3 85.29 2 91.24 1 69.95 Zilina 81,041 3 77.82 1 84.73 5 57.90 1 88.41 3 91.00 4 67.08 Trnava 65,536 4 76.96 3 83.98 2 61.39 5 80.07 1 91.48 3 67.90 Bratislava 425,923 5 76.16 5 81.97 4 59.33 4 83.19 4 90.17 5 66.12 Sources: Doing Business database; for population data, Eurostat. Note: The distance to frontier (DTF) score shows how far a location is from the best performance achieved by any economy on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia.” The data for Bratislava have been revised since the publication of Doing Business 2018. The complete data set can be found on the Doing Business website at http://www.doingbusiness.org. a. Based on the DTF scores for the five regulatory areas included in the table. be attributed in part to the higher demand for business services in the FIGURE 1.4  In Slovakia the largest variations in regulatory performance are in getting capital. As an illustration, Bratislava electricity and dealing with construction permits sees more new business licensing appli- Distance to frontier score (0–100) cations than all four of the other Slovak Starting a Dealing with Getting Registering Enforcing business construction electricity property contracts cities combined.9 But some cities do permits better in managing higher transaction 100 Germany volumes. Prague tops the ranking of the (EU best) Ireland Lithuania seven Czech cities, demonstrating the (EU best) (EU best) potential for dealing efficiently with high Trnava 90 Denmark Zilina demand for business services. (EU best) Bratislava, Presov Presov, Zilina The largest variations in regulatory per- Lithuania formance among the Slovak cities are in (EU best) 80 Bratislava the areas of getting electricity and dealing Trnava with construction permits (figure 1.4). EU average This should be no surprise, because differ- ent utility companies operate in different Kosice 70 parts of the country and many construc- tion permitting requirements are under Presov Bratislava municipal control. The details of these disparities in performance are useful for 60 public policy purposes, because they point to areas where improvements could be Zilina made without major legislative changes. 50 For example, the distance to frontier score for getting electricity differs by more than 8 points between the cities 0 ranking highest and lowest. Zilina’s score Best performance in country Worst performance in country Country average (88.41) is better than Austria’s—indeed, high enough to rank in the top 10 among Source: Doing Business database. EU member states. Meanwhile, Trnava Note: The distance to frontier score shows how far a location is from the best performance achieved by any economy on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier performs below the EU average. The of best practices (the higher the score, the better). The averages for Slovakia are based on data for the five cities variation stems mainly from differences benchmarked in that country. The averages for the EU are based on economy-level data for the 28 EU member states. OVERVIEW 9 in the internal processes of distribution getting electricity—and all five surpass made the most progress in closing the utilities and in the availability of capacity the EU average in the areas of registering gap with global best practices in business for connecting new buildings. In Kosice, property and enforcing contracts. All the regulation in the past 14 years (figure Presov and Zilina, where a warehouse like cities benefit from Slovakia’s low cost to 1.5). And both Portugal and the Czech the one in the Doing Business case study register a property transfer—the lowest Republic have surpassed the EU average is likely to connect to the low-voltage in the EU, at only EUR 272 as calculated on the ease of doing business. Yet chal- network, wait times are shorter and the for the Doing Business case study—and its lenges remain for all four countries. process is less costly. In Bratislava and strong performance on the quality of land Trnava, by contrast, the warehouse is administration, with every piece of private The findings of this study provide policy likely to get a medium-voltage connec- property formally registered and properly makers at different levels—European, tion, which requires the installation of a mapped. Globally, only a fifth of econo- national and local—with evidence for private substation at a cost of around EUR mies cover all private land in both their their strategic choices in promoting 28,000. So while getting electricity takes land records and cadastral maps. In the a better regulatory environment for 56 days and costs 55.2% of income per area of enforcing contracts, all five cities development and growth. Eliminating capita in Zilina, it takes a month longer stand out for low up-front enforcement unnecessary red tape and improving the and costs more than four times as much costs and for high scores on the quality effectiveness of bureaucracies can reduce in Bratislava and Trnava. of judicial processes index—scores more the cost of doing business for local firms, than two points above the EU average. enhancing their efficiency and their ability The distance to frontier scores for dealing to compete abroad. with construction permits reveal a varia- tion almost as large. But here Zilina, with WHAT’S NEXT? This report’s review of the regula- a score of less than 58.00, performs as tory environment in Croatia, the Czech poorly as economies ranking in the bot- Developing a favorable business envi- Republic, Portugal and Slovakia points to tom 20th percentile globally, below all EU ronment, conducive to the creation and possible improvements (see table 1A.1 at member states—while Presov performs growth of firms, has been a focus in all the end of the overview). Some recom- better than all cities in Croatia, and the four EU member states benchmarked mendations apply to all four countries, Czech Republic (except Varazdin). The in this study. Slovakia and Croatia are others to one or two of them. Some variation stems mainly from differences in among the five EU member states that improvements could be achieved by the efficiency of building departments in issuing location and construction permits FIGURE 1.5  Slovakia and Croatia are among the five EU member states making the and of local cadastral offices in registering most progress in closing the gap with the global best practices in business regulation new buildings. For example, obtaining the location and construction permits for a Improvement in distance to frontier score simple warehouse takes 120 days in Presov 25 and 135 in Kosice, but 170 in Bratislava. 20 Even the best performance among the Slovak cities in construction permitting 15 doesn’t come close to the EU average. The 2004–13 2014–17 process is considerably more burdensome 10 on average in Slovakia than in most other EU member states, largely because of 5 the long wait times for the approvals that builders must obtain. Even in Presov, with 0 Slo d Rom ia Lith nia ia tia blic nce Slo ly ia Bul ia Hun ia y Por ce al in Den us Esto k Bel ia m Swe d he en Lux rlands ted bourg m and tria Ger lta ny the fastest permitting process among the gar r an an Ita vak uan ven v gar tug n Spa giu gdo ma e r ma d Cze Croa Ma Lat Cyp a Gre Aus epu Fra Pol Irel Finl five benchmarked cities, a builder needs Kin m ch R e Net to wait two and a half months longer than Uni the EU average and six months longer than in the EU member states with the Source: Doing Business database. fastest processes (Denmark and Finland). Note: The distance to frontier score shows how far an economy is from the best performance achieved by any economy on each Doing Business indicator. Higher scores indicate greater regulatory efficiency and quality. The vertical bars in the figure show only the amount of improvement, not the entire distance to frontier score. Because of significant But all the Slovak cities except Trnava changes in the Doing Business methodology between 2013 and 2014, improvements are measured in two separate periods, 2004–13 and 2014–17. The data set is incomplete for Cyprus, added to the Doing Business sample in 2008, outperform the EU average in the area of and for Malta, added in 2013. 10 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA replicating EU or global good practices, can be implemented relatively quickly, Portugal’s example and make the use of others by looking to examples within a including through the EU’s Cohesion notaries optional for companies using country itself. Policy programs (box 1.2).10 standard incorporation documents or deeds. This would allow significant cost Indeed, an effective way forward is to How to improve the ease of savings for entrepreneurs, who today pay promote the exchange of information and doing business in Croatia? costs amounting to 7.3% of income per experience among cities, enabling under- Croatia has made much progress in clos- capita to start a business—more than performing ones to learn from those with ing the gap with global best practices in twice the EU average of 3.4%. Croatia higher rankings. Replicating more effi- business regulation. Yet more could be could also make start-up easier over the cient processes developed by other cities done to further ease the regulatory bur- long run by consolidating all electronic within the same country could produce den on companies and align regulatory platforms used for different steps into significant efficiency gains without a need processes with good practices identified a single online business registration for major legislative changes. The experi- in other EU member states. system. ence of other EU member states benefit- ing from similar subnational regulatory To make starting a business or transfer- To improve construction permitting, analysis shows that such improvements ring property easier, Croatia could follow Croatia could introduce a risk-based BOX 1.2 How has peer-to-peer learning worked in other EU member states? Under the European Commission’s “lagging regions” initiative in Poland launched in June 2015, efforts were made to identify and address constraints to growth in less-developed regions. One issue that came to the fore—based on the results of the Doing Business subnational assessment—was the variation in efficiency in business registration. In partnership with the European Commission and the World Bank, the Polish government designed an action plan to help the two worst-performing cities adopt practices from their best-ranked peers to make the registration process more efficient (see figure). Inspired by Poznan—the city with the highest take-up of the online business registration system—Kielce and Rzeszow embarked on a promotional campaign to raise awareness about the system and trained staff at the court regis- What did the Polish cities with the least efficient business registration learn from their try in its use. peers with better practices? What did they learn? What was the result? To improve the processing of pa- per-based applications, Kielce and Rzeszow looked to Gdansk, where Registering electronically is four applications were processed 40% times as fast and half as costly as registering on paper $ faster thanks to more efficient inter- COST nal processes. To reduce backlogs Inspired by Poznan (best practice), and accommodate seasonal spikes they promoted electronic registration Share of online registrations in demand, the two cities consulted grew faster in Kielce and Rzeszow and trained their staff how to use than in the rest of the country with judges from the court registry the system in Bialystok, who provided advice on performance-based pay schemes to Inspired by Gdansk (paper registration, but more efficient), help increase efficiency. The efforts they improved document handling paid off: the share of applications for TIME business registration filed electroni- They consulted with the registry cally grew faster in both cities than authority in Bialystok on how to in the rest of the country. And while handle seasonal spikes in demand the number of applications returned and reduce backlog for correction remained stable on average in Poland, it fell in both Source: Doing Business database. Kielce and Rzeszow.a Similarly, a dedicated Cohesion Policy program targets judicial reform in Italy, where differences in judicial performance are stag- gering—with lagging regions faring worst. The duration of business disputes in Italian courts can range from just over two years in Turin to five and a half years in Bari.b a. World Bank, Poland Catching-Up Regions (Washington, DC: World Bank, 2017). b. World Bank, Doing Business in Italy 2013 (Washington, DC: World Bank, 2013). OVERVIEW 11 inspection system and a mandatory insur- represents Croatia in the Doing Business Croatia’s distance to frontier score for ance regime for construction practitio- global ranking, improvements in this city starting a business by more than 7 points ners. It could consolidate preconstruction would be reflected in the country’s rank- and its corresponding ranking by 22 plac- approvals by introducing a single-window ings. If Zagreb were to replicate the best es, from 87 to 65. Similarly, learning to mechanism. And it could consider lower- performances recorded across the five make the electricity connection process ing the fees for infrastructure develop- cities in the areas of starting a business, as efficient as in Osijek and the power ment by distributing the development dealing with construction permits, get- supply as reliable as in Varazdin, Rijeka costs over a wider base of existing and ting electricity, registering property and or Split would improve Croatia’s distance potential investors, as New Zealand did. enforcing contracts, Croatia would rise to to frontier score for getting electricity by 40 in the global ranking of 190 economies more than 4 points. And in enforcing con- To help improve the reliability of power on the ease of doing business—11 places tracts, achieving the best performances supply across the country, Croatia could higher than its current ranking according observed among all five cities on time, require utilities to compensate customers to Doing Business 2018 (figure 1.6). cost and quality would increase the coun- or pay a penalty when outages exceed a try’s distance to frontier score by almost certain cap. And it could make getting What regulatory changes in Zagreb could 4 points and allow it to jump 12 places in electricity easier by implementing infor- help drive this jump in Croatia’s overall the ranking, from 23 to 11. mation technology systems that would ranking? Learning from Varazdin how allow entrepreneurs to submit projects to make the permitting process faster How to improve the ease of online, track applications and digitize and less costly would improve Croatia’s doing business in the Czech documentation. The national utility’s distance to frontier score for dealing Republic? local branch in Varazdin offers the most with construction permits by more than Of the four member states, the Czech advanced example across Croatia in the 11 points, propelling the country almost Republic is the only one in which the use of technology to facilitate interactions 20 places higher in the corresponding capital leads the benchmarked cities in with applicants and the organization of ranking (from 126 to 107) and past Spain. aggregate performance across the five back-office work. Learning from Split how to encourage a regulatory areas measured. Indeed, while massive take-up of the HITRO.HR busi- Prague’s aggregate distance to frontier To reduce processing times for property ness registration services would improve score for those five areas surpasses the transactions and help prioritize work at the land registry offices, Croatia could fol- FIGURE 1.6  If all local good practices were adopted, Croatia would jump 11 places— low the example of Portugal and Slovakia to 40—in the global ranking on the ease of doing business by introducing a formal fast-track proce- Croatia dure for an extra fee. And it could improve Actual DTF score Hypothetical best DTF score the quality of land administration by 89.58 having the land registry and cadastre use 84.83 the same identification number for each 82.49 80.43 property and by introducing a dedicated 75.86 74.50 mechanism for dealing efficiently with 74.07 74.03 Potential rank: 40 land disputes. Doing Business 2018 rank: 51 71.17 70.60 66.20 There is also scope for improvement in the area of enforcing contracts. In addition to evaluating court efficiency with a view to 54.77 reducing backlogs, Croatia could consider improving its small claims procedure and Starting a business Dealing with construction permits Getting electricity adding more “fast track” features, such Registering property Enforcing contracts Ease of doing business as by introducing less formal rules of evi- dence and limiting the number of expert witnesses who can testify in a case. Source: Doing Business database. Note: For the actual distance to frontier scores, Croatia is represented by Zagreb. The hypothetical best scores for the five regulatory areas shown are based on the best performances Slovakia recorded among all five cities benchmarked within Croatian cities could make important the country. Those scores are used along Actual with Zagreb’s actual scores for five other regulatory DTF score areas Hypothetical measured best by Doing DTF score Business (getting credit, protecting minority investors, paying taxes, trading across borders and resolving insolvency) to gains in competitiveness just by replicat- calculate the hypothetical best score for the overall ease of doing business and the corresponding91.53 global ranking. The 90.17 distance to frontier score shows how 91.48 by any economy far on average a location is from the best performance achieved ing good performances already found on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier of within the country. And because Zagreb best practices (the higher the score, the better). 83.19 84.73 81.97 76.50 Potential rank: 30 Doing Business 2018 rank: 39 73.76 69.95 66.12 12 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA EU average, the other six benchmarked Czech Republic could make construc- Lisbon were to adopt all the good prac- cities all lag behind that average. Thus tion permitting faster and simpler by tices already in place among the eight secondary cities in the Czech Republic consolidating preconstruction approvals benchmarked cities, Portugal would could make important gains in com- in a single-window mechanism. And in rise to 25 in the global ranking of 190 petitiveness by replicating good practices the long run it could improve efficiency economies on the ease of doing busi- already found in Prague. even more by introducing an electronic ness—four places higher than its current one-stop shop where all agencies review ranking according to Doing Business 2018 A good place to start is in the area of permit applications online. and ahead of Spain and Poland (figure getting electricity: Prague has among the 1.7). Indeed, Portugal’s distance to fron- most efficient connection processes in the To make getting electricity easier where tier score for enforcing contracts would EU and globally. Getting a new connec- more complicated connections are improve by almost seven points, and its tion in the capital takes only two months, required—such as those to the medium- score for getting electricity by almost six a quarter of the time required in Usti nad voltage network—the Czech Republic points. Labem—and it costs 25.9% of income could simplify the process for obtaining per capita, more than a tenth as much as the necessary municipal permits. For this, But the potential for improvement in Ostrava. Similarly, Czech cities could the country could look to the example of extends beyond Lisbon to other cities look to the efficiency of Prague’s judiciary, Lithuania: there, applicants submit a sin- as well. Portuguese cities could make which achieves the fastest times in enforc- gle consolidated form to the municipality, enforcing contracts easier by follow- ing contracts despite heavier workloads. which then collects the clearances from ing the example of Coimbra and Braga, Active case management—including the different departments on their behalf. those with the fastest process among the establishment of realistic deadlines for key To make registering property easier, the country’s benchmarked cities. Coimbra court events—helps keep cases on track Czech Republic could consider introduc- and Braga have the shortest delays in and avoid the use of adjournments. ing an option to fast-track a property appointing expert witnesses and obtain- transfer. Today when an application for a ing and commenting on their opinions, as Prague is not the only Czech city provid- property transfer is received, it triggers a well as the shortest waits to obtain hear- ing lessons in regulatory quality and effi- 20-day stay period during which nothing ing dates. Coimbra also follows a good ciency. Brno, the country’s second largest can be done with the application and no practice in the electricity connection city, also offers good examples. Through registration can be performed. process that other cities could replicate: more efficient communication with inves- thanks to the utility’s use of a georef- tors and other stakeholders, and more How to improve the ease of erencing system there, a site visit is no up-to-date infrastructure maps to identify doing business in Portugal? longer required for preparing an estimate connection points for utilities, Brno makes Portugal’s regulatory reform effort in of the connection cost. Moreover, cities dealing with construction permits easier recent years has been remarkable: the in continental Portugal could follow the and less time consuming than the other country implemented more than 1,000 example of Funchal and Ponta Delgada, Czech cities benchmarked. Builders in measures of administrative simplifica- where the internal wiring certificate Brno can complete the permitting process tion and e-government between 2006 has been replaced by a notification six weeks faster than those in Olomouc, and 2011 under its successful SIMPLEX through which the technicians assume which lacks these elements. program (box 1.3).11 And the country responsibility. To make construction per- has world-class systems for starting a mitting easier, Portuguese cities could While the Czech Republic already follows business and registering property. But introduce electronic permitting systems many good practices, as documented in the subnational variation in performance and process guidelines similar to those this report, the country also has room in dealing with construction permits, adopted in Porto. And they could intro- to improve in most areas measured—to getting electricity and enforcing con- duce silence-is-consent rules to reduce catch up with the EU’s best performers. tracts suggests that cities could make the time required to obtain approvals of To speed up the process for starting important gains in competitiveness in architectural projects. a business, for example, the country these areas by replicating good practices could follow the example of Croatia or within the country. Other EU member states offer Portugal, where VAT registration is a examples of ways to further improve simple notification. In the medium term Because Lisbon represents Portugal in the business environment. To simplify it could consider consolidating VAT and the Doing Business global benchmark- start-up, Portugal could eliminate the corporate income tax registration with ing, improvements in this city would notifications required at the start of an the initial company registration with the be reflected in the country’s distance employment relationship by following court—as Hungary has already done. The to frontier scores and in its rankings. If the example of Denmark—which simply OVERVIEW 13 BOX 1.3 SIMPLEX: combining e-government and red tape reduction initiatives in Portugal Before 2006, starting a business in Portugal meant visiting several government offices, completing 11 procedures, filling out 20 forms, waiting about two and a half months and paying the equivalent of 13.5% of income per capita.a All this changed in 2006 when the government launched the SIMPLEX program, aimed at modernizing public administration, cutting red tape and reduc- ing compliance costs. The program has been widely recognized as having transformed the public sector and its service delivery, winning international accolades in the process.b Among the first initiatives was the Empresa na Hora program, implementing a one-stop shop for company registration. The program introduced preapproved articles of association, created lists of preapproved company names and eliminated outdated formalities such as registering the company books. Today all information provided by an entrepreneur is automatically shared among the public agencies involved—and the entrepreneur can receive a corporate taxpayer number, social security number and commercial registration within an hour, at a cost of EUR 360. Another early initiative, in 2007, was the Casa Pronta program, enabling users to complete a property transfer through a single interaction. All due diligence—including checking for encumbrances on the property—is now done at one window, in one step. Similarly, the Zero Licensing initiative means that a restaurateur in Lisbon no longer needs to pay 11 visits to four different agen- cies to get his or her business licensed. One submission through a single electronic point of contact suffices. Hand in hand with simplification came electronic services. But the online company registration portal was initially accessible only to lawyers and notaries with a digital certification. In 2009 access was granted to the public. Today entrepreneurs can use a cartão do cidadão—an identification card enabling users to identify themselves when using online public services as well as to sign docu- ments electronically—to access the portal and register a business from their office. And the use of online services has eliminated the need to issue paper documents. Companies have permanent access to up-to-date certificates on the business portal. Creating a public sector more responsive to public demands required strong political commitment. One key to the success of the program was that it was under the direct leadership of the prime minister.c Another was that it involved mid-level officials so that they could take ownership of the reform. To ensure steady implementation, a network of SIMPLEX focal points was set up with a representative from every ministry, with progress reviewed every two weeks. Ten years after the first SIMPLEX measures, the program was reinitiated with a more collaborative approach. In SIMPLEX+ users drive the key areas for action, encouraged through public consultations, nationwide tours, a blog and Facebook page, and award ceremonies for the best ideas. The public can track all the initiatives and their impact at https://www.simplex.pt. The SIMPLEX+ 2016 program included 255 measures aimed at reducing redundancies and eliminating the need to fill out forms—including income tax forms. In 2017 the tax authority began providing automatic calculations of personal income tax for about a million taxpayers. The taxpayers need only verify that the provisional declarations uploaded on the Ministry of Finance portal accurately reflect their situation. A data sharing agreement among public entities makes it unnecessary to file information already available to the administration. The SIMPLEX programs, while successful, have generated a greater volume of transactions thanks to the simplified processes. To ensure sustainability, agencies need to carefully assess their resources. Take the Casa Pronta service desks, where people used to be able to receive services on a walk-in basis. Now some of the service desks are swamped, as in Lisbon, and users sometimes need to book an appointment 10–15 days in advance. Waits like these partly defeat the purpose of regulatory simplification. a. Doing Business database. b. OECD (Organisation for Economic Co-operation and Development), Making Life Easy for Citizens and Businesses in Portugal: Administrative Simplification and E-government (Paris: OECD, 2008). The European Commission awarded the program the European Enterprise Award in the category of reducing red tape in 2016. c. “SIMPLEX+ 2016 Program,” presentation, https://www.simplex.gov.pt/app/files/8926586c0ad2c9a5e0cc2bd56e30987f.pdf. assumes that a business has become the feasibility of reducing the cost. At databases where the land registry and an employer when it reports a wage 7.3% of the property value (including the cadastral agency record information. payment for the first time. Alternatively, the property transfer tax at 6.5% of the companies could be allowed to submit property value), this cost ranks Portugal To improve efficiency in contract information on employees’ contracts at among the six EU member states with enforcement, Portugal could continue its incorporation—as is being done in Spain the most costly property registration. work to reduce backlogs of civil enforce- through the online platform CIRCE. In addition, Portugal could improve ment proceedings and increase the To make registering property easier, the reliability of its land administration efficiency of these proceedings. An over- Portuguese authorities could assess infrastructure by unifying the separate haul of the regulatory regime governing Starting a business Dealing with construction permits Getting electricity Registering property Enforcing contracts Ease of doing business Starting a business Dealing with construction permits Getting electricity 14 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Registering property Enforcing contracts Ease of doing business FIGURE 1.7  Adopting all local good practices would boost Portugal’s global ranking Portugal registering property and enforcing con- on the ease of doing business Actual by four places—to 25 DTF score Hypothetical best DTF score tracts, it would stand at 30 in the global Portugal 92.25 ranking of 190 economies on the ease of 90.88 Actual DTF score 90.88 Hypothetical best DTF score doing business—nine places higher than 86.45 92.25 Slovakia’s current ranking according to 90.88 90.88 79.43 Doing Business 2018 (figure 1.8). 78.35 86.45 77.99 Potential rank: 25 Doing Business 2018 rank: 29 76.51 74.60 73.10 74.31 79.43 And if this hypothetical city were 78.35 77.99 Potential rank: 25 to represent Slovakia in the global Doing Business 2018 rank: 29 67.91 76.51 74.60 73.10 74.31 benchmarking, these changes would be 67.91 reflected in higher scores and rankings. In enforcing contracts, for example, reducing the time required to 635 days, Croatia Starting a business Dealing with construction permits Getting electricity Actual DTF score as in Kosice, Hypothetical would increase Slovakia’s best DTF score distance to frontier score 89.58 by almost four Registering property Enforcing contracts Ease of doing business Starting a business Dealing with construction permits Getting electricity points, ranking the country among the 84.83 82.49 top 30 globally on the ease of enforcing Registering property Enforcing contracts Ease of 80.43 doing business Source: Doing Business database. contracts. Similarly, making the electric- 75.86 Note: For the actual distance to frontier scores, Portugal is represented by Lisbon. The hypothetical best scores for the ity connection process as 74.50 efficient as 74.07 five regulatory areas shown are based on the best performances recorded among all eight cities benchmarked within 74.03 Potential rank: 40 Doing the country. Those scores are used along with Lisbon’s actual scores Business for 2018 five other rank: 51 regulatory 71.17 areas measured by Doing in Zilina and the supply as reliable as 70.60 insolvency) to Business (getting credit, protecting minority investors, paying taxes, trading across borders and resolving calculate the hypothetical best score for the overall ease of doing business and the corresponding global ranking. The in Bratislava, Kosice 66.20 and Presov would distance to frontier score shows how far on average a location is from the best performance achieved by any economy improve Slovakia’s distance to frontier on each Doing Business indicator. The score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). score for getting electricity by more than 54.77 eight points, placing the country among enforcement agents has strengthened five benchmarked cities in the areas the top 15 globally. Other cities could oversight while also providing greater of starting a a business, Starting business dealing with Dealing follow the with construction example ofGetting permits Zilina, where the electricity autonomy in conducting enforcement construction permits, getting electricity, distribution utility introduced a number Registering property Enforcing contracts Ease of doing business proceedings. And changes in the fee regime have improved incentives for col- FIGURE 1.8  Adopting all local good practices would propel Slovakia nine places lection. These measures have increased higher in the global ranking on the ease of doing business—to 30 the efficiency of the enforcement Slovakia process, and simple enforcement cases Actual DTF score Hypothetical best DTF score conducted exclusively by bailiffs move 91.53 relatively fast. But more could be done to 90.17 91.48 improve court performance. While case 83.19 84.73 backlogs have been reduced over the 81.97 past four years, hundreds of thousands 76.50 Potential rank: 30 of cases are still pending before the Doing Business 2018 rank: 39 73.76 69.95 courts. 66.12 62.97 How to improve the ease of 59.33 doing business in Slovakia? Slovakia has a successful track record of looking to the EU and using interna- Starting a business Dealing with construction permits Getting electricity tional benchmarks like Doing Business Registering property Enforcing contracts Ease of doing business to improve its regulatory framework. Now it is time to look inward as well. Its cities could do much to increase Source: Doing Business database. their competitiveness by introducing Note: For the actual distance to frontier scores, Slovakia is represented by Bratislava. The hypothetical best scores for the five regulatory areas shown are based on the best performances recorded among all five cities benchmarked improvements already successfully within the country. Those scores are used along with Bratislava’s Portugal actual scores for five other regulatory areas measured by Doing Business (getting credit, protecting minority investors, paying taxes, trading across borders and resolving implemented in other cities in the coun- Actual DTF score Hypothetical insolvency) to calculate the hypothetical best score for the overall ease of doing business and thebest DTF score global corresponding try. Indeed, if a hypothetical city adopted ranking. The distance to frontier score shows how far on average a location is from the best performance 92.25 achieved by any economy on each Doing Business indicator. The score is normalized to range from 0 to 100, 90.88 with 100 representing 90.88 all the good practices found across the the frontier of best practices (the higher the score, the better). 86.45 79.43 78.35 77.99 Potential rank: 25 Doing Business 2018 rank: 29 76.51 74.60 73.10 74.31 67.91 OVERVIEW 15 of measures to increase efficiency. For strengthening the validity of arbitration example, it eliminated the approval of clauses. And to make registering prop- project documentation—and instead erty easier, Slovakia could fully comput- provides more detailed technical con- erize the property transfer process. ditions up front so that there is little ambiguity for project designers. It also replaced the completion report with an affidavit through which the entrepreneur confirms that the external connection has been prepared in accordance with the technical conditions. NOTES But the adoption of existing good prac- 1. Patrice Muller, Jenna Julius, Daniel Herr, Laura Koch, Viktoriya Peycheva and Sean tices within Slovakia would still leave McKiernan, Annual Report on European SMEs the country lagging behind most other 2016/2017: Focus on Self-Employment, report EU member states in starting a busi- prepared for the European Commission (Brussels, 2017), https:/ /ec.europa.eu ness. The same is true for dealing with /growth/smes/business-friendly-environment construction permits. Looking beyond /performance-review-2016_en. Slovakia’s borders to EU or even global 2. Thomas Farole, Issam Hallak, Peter Harasztosi and Shawn Tan, “Business Environment good practices is another way to boost and Firm Performance in European Lagging competitiveness. Regions,” Policy Research Working Paper 8281 (World Bank, Washington, DC, 2017). 3. See the chapter “About Doing Business and To make business start-up easier, Doing Business in the European Union 2018: Slovakia could follow the example of the Croatia, the Czech Republic, Portugal and Czech Republic, where the minimum Slovakia.” 4. Data include all limited liability companies capital requirement is a symbolic CZK 1, created in July–December 2017. Statistics or Portugal, where no minimum paid-in provided by the Ministry of Justice of Croatia. capital is required. Today Slovak entre- 5. “Reports on Activities of Land Registry Offices,” Ministry of Justice of Croatia, preneurs need to deposit EUR 2,500 as accessed April 18, 2018, https:/ /pravosudje paid-in minimum capital—as a share of .gov.hr/strategije-planovi-i-izvjesca/6346. income per capita (17.2%), this amount 6. World Bank, Doing Business in Poland 2015 (Washington, DC: World Bank, 2015). remains among the highest in the EU. 7. Total for all cases at the commercial courts in Slovakia could also consider consolidat- Split and Osijek in 2017. Data provided by the ing VAT registration with business and Ministry of Justice. 8. Data include all limited liability companies corporate income tax registration at created in July–December 2017. Statistics the Trade Licensing Office’s one-stop provided by the Ministry of Justice of Croatia. shop. This would follow the example 9. Data include all new limited liability companies licensed in 2016 and the first six of Hungary, where VAT registration is months of 2017. Statistics provided by the a simple notification done during the Ministry of Interior of the Slovak Republic. incorporation process. 10. The Cohesion Policy is the European Union’s strategy to promote and support the “overall harmonious development” of its member Slovakia could make dealing with states and regions. Enshrined in the Treaty on construction permits easier by increas- the Functioning of the European Union (article 174), the policy aims to strengthen economic ing the role of certified private sector and social cohesion by reducing disparities in professionals in the permit-issuing the level of development between regions. The process, consolidating preconstruction policy focuses on key areas that will help the EU face the challenges of the 21st century and clearances and introducing an electronic remain globally competitive. permitting system. To make enforcing 11. “SIMPLEX+ 2016 Program,” presentation, contracts easier, Slovakia could ease the https://www.simplex.gov.pt/app/files/89265 86c0ad2c9a5e0cc2bd56e30987f.pdf. burden on the courts by encouraging the use of alternative dispute resolution, such as by expanding the types of cases that can be submitted to arbitration and 16 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA TABLE 1A.1  Potential opportunities for improvement in the four member states (continued) Czech Republic Relevant ministries and agenciesa Portugal Slovakia Croatia Regulatory area Reform recommendations National level Local level ● ● Simplify VAT registration • Ministry of justice (Croatia, • Local, regional or district Czech Republic, Slovakia) commercial courts (Croatia, ● ● • Tax authority (all four Czech Republic, Slovakia) Reduce or eliminate the paid-in minimum capital requirement for limited liability companies countries) • Trade licensing offices • Ministry of interior (Czech (Czech Republic, Slovakia) ● ● Review whether certain requirements can be eliminated Republic, Slovakia) • FINA, HITRO.HR offices for small and medium-size businesses • State Statistical Office (Croatia) (Croatia) ● ● Make third-party involvement optional • Social security, pension or Starting a health administration (all four business countries) ● Make company name reservation more transparent and rules based • Financial Agency (FINA) (Croatia) ● Simplify notifications of the start of employment relationships ● ● ● Integrate postregistration procedures into the incorporation process ● ● ● Create a single online process for starting a business ● ● ● ● Introduce or improve electronic permitting systems • Ministry of construction or • Municipalities and building urban planning (all four or physical planning offices ● ● ● ● Clarify and better communicate the guidelines and countries) (all four countries) requirements for dealing with construction permits • Cadastre authority (all four • Local water and sewerage countries) companies (Croatia, Czech ● ● ● ● Introduce mandatory insurance requirements to cover Republic, Slovakia) • Hrvatske Vode (Croatia) structural defects • Tax authority (Portugal) ● ● ● Streamline building registration procedures by improving communication channels between public agencies Dealing with ● ● ● Consolidate preconstruction approvals construction permits ● ● Enhance the quality of regulatory expertise in collaboration with the private sector ● Consider ways to reduce the burden on entrepreneurs for infrastructure development ● Streamline the process for obtaining the occupancy permit ● Introduce application tracking systems and silence-is- consent rules to increase accountability at the permit- issuing authorities ● ● Streamline the process for obtaining municipal permits • National regulatory agency • Municipalities (all four for energy (all four countries) countries) ● ● ● ● Simplify the process for obtaining an excavation permit • National electric grid • Authorized electrical company HEP (Croatia) installation companies (all ● Improve the reliability of electricity supply four countries) • Directorate General for Energy ● ● ● and Geology (Portugal) • Professional associations Reduce the up-front cost of obtaining a new of engineers and electrical connection contractors (all four Getting countries) electricity ● Eliminate the project approval by providing detailed technical requirements up front • Local distribution utilities (Czech Republic, Portugal, ● Replace the internal wiring certificate with self- Slovakia) certification of compliance • Regional Energy Directorate (Portugal) ● Eliminate the need for an on-site inspection to • Regional Directorate for the determine the technical conditions and cost of the Economy and Transports connection (Portugal) OVERVIEW 17 TABLE 1A.1  Potential opportunities for improvement in the four member states (continued) Czech Republic Relevant ministries and agenciesa Portugal Slovakia Croatia Regulatory area Reform recommendations National level Local level ● ● Introduce a fast-track registration procedure • Ministry of Justice (Croatia) • Municipal courts (Croatia) • Cadastre authority (Czech • Land registry offices ● Update local and national tax information internally by Republic, Slovakia) (Croatia, Czech Republic, linking systems across institutions • Institute of Registries and Slovakia) Registering Notaries (Portugal) ● Assess the feasibility of reducing property transfer taxes property • Tax authority (Croatia, ● ● ● Introduce standardized contracts for property transfers and Portugal) consider making the use of lawyers or notaries optional ● ● ● ● Create an electronic platform for property transfers ● ● ● ● Continue to assess internal court procedures with a • Ministry of justice (all four • Local municipal and view to reducing time and backlogs countries) commercial courts (Croatia) • Judiciary (all four countries) • District courts (Czech ● ● ● ● Promote alternative dispute resolution  Republic, Slovakia) Enforcing contracts • First-instance courts ● ● ● ● Set legal limits on the granting of adjournments (Portugal) ● ● Improve or introduce fast-track procedures for small claims Note: All reform recommendations are detailed in the “What can be improved?” section of the corresponding chapter. a. The list includes the main ministries and agencies relevant to each regulatory area, but others might also be implicated. Starting a Business MAIN FINDINGS ƒƒ The ease of starting a business varies substantially among the cities benchmarked in Croatia, the Czech Republic and Slovakia. But no variations in performance emerge among those in Portugal. ƒƒ If represented by Split rather than Zagreb in the Doing Business global ranking on the ease of starting a business, Croatia would jump 22 places, from 87 to 65. In Split more than half of new limited liability companies are set up using a government service that simplifies start-up. In Zagreb most company founders choose to register their business in person at the court. ƒƒ Starting a business in the Czech Republic or Slovakia can take anywhere from just over two weeks (as in Olomouc, Presov and Zilina) to almost a month (as in Prague and Bratislava). The variation is due mainly to differences in efficiency among regional branches of the national tax authority in issuing the value added tax identification number. ƒƒ All four countries have implemented electronic filing for company registration. But except in Portugal, the process cannot be completed fully online—because company founders still need to deliver or pick up several documents in hard copy. STARTING A BUSINESS 19 E ach year millions of entrepreneurs one such reform in that period.3 Results complex than the EU average (figure across the European Union start at the country level show the importance 2.1). Starting a business takes eight pro- new businesses. These ventures of these efforts. In Portugal business cedures in the Czech Republic, Slovakia might range from a tile-making company registration reforms reduced the time and and most of the cities benchmarked in in Porto or a small bookstore in Plzen with cost for formalizing a company, leading Croatia, while it takes seven in Rijeka fewer than 15 employees to a large ship- to an increase in the number of business (Croatia) and six in Portugal and Split ping company in Split with more than 100 start-ups of 17% and in the number of (Croatia). The EU average is five proce- on its payroll or an information technology new jobs created monthly per 100,000 dures. Belgium, Estonia, Finland, Ireland firm in Kosice with earnings of more than inhabitants of 7. Moreover, the reforms and Sweden manage to regulate business EUR 20 million a year. Small and medium- may have created a more inclusive envi- start-up through only three. size companies like these make up 9 of 10 ronment for aspiring entrepreneurs: after businesses and create two of every three they were implemented, new start-ups The process for starting a business is jobs in the EU.1 All that entrepreneurship were more likely to be female-owned, and relatively slow but inexpensive in the helps the EU economy grow, create jobs they tended to be smaller and headed by Czech Republic and Slovakia. In Portugal and ramp up innovation. Not surprisingly, entrepreneurs with less experience and the process is both fast and relatively fostering entrepreneurship and creating a education.4 Results at the regional level for inexpensive. In Croatia the picture is favorable business environment for these Italy provide similar evidence: provinces more mixed. Start-up takes less than a economic powerhouses has been a focus with a longer process for starting a busi- week in all benchmarked cities in Portugal for many EU member states. ness have lower rates of firm creation than and in Split (Croatia). In Zagreb (Croatia) those with a more streamlined process.5 and across the cities benchmarked in Simplifying start-up formalities, often the the Czech Republic and Slovakia it takes first government regulation that compa- almost three weeks on average. Among nies must comply with, has been at the HOW DOES STARTING A EU member states only Poland, Bulgaria forefront of these efforts. Doing Business BUSINESS WORK IN THE and Austria impose a longer wait on recorded no fewer than 66 reforms by EU FOUR MEMBER STATES? entrepreneurs. member states to ease business start-up over the past 10 years.2 Indeed, all mem- All four countries covered by this study The average cost to start a business in ber states but two implemented at least have a start-up process that is more Croatia, at 7.3% of income per capita, is seven times the average in the Czech Republic and Slovakia and more than WHAT DOES STARTING A BUSINESS MEASURE? twice the EU average of 3.4%—a figure that includes top performers such as Doing Business records all procedures officially required, or commonly done in Slovenia (no cost) and Ireland (0.2%). practice, for an entrepreneur to start up and formally operate an industrial or com- About 90% of the cost in Croatia repre- mercial business, as well as the time and cost to complete these procedures and sents notary fees for drafting the com- the paid-in minimum capital requirement (see figure). To make the data compara- pany deed and preparing other founding ble across locations, Doing Business uses a standardized limited liability company documents. In addition, entrepreneurs that is 100% domestically owned, has five owners, has start-up capital equivalent in Slovakia need to deposit EUR 2,500, to 10 times income per capita, engages in general industrial or commercial activi- and those in Croatia HRK 10,000 (EUR ties and employs between 10 and 50 people within the first month of operations. 1,344), as paid-in minimum capital. Cost Only a symbolic amount is required in (% of income per capita) the Czech Republic (CZK 1). In Portugal Formal operation there is no paid-in minimum capital requirement. Paid-in $ Number of minimum An inventory of the start-up formalities capital procedures and procedural steps faced by compa- nies in the four countries shows that Portugal has managed to streamline Entrepreneur and integrate most such procedures Time (days) in a one-stop shop (table 2.1). Yet its Preregistration Registration, Postregistration incorporation start-up process still requires three separate notifications of the start of an 20 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA FIGURE 2.1  In all 25 cities the start-up process is more complex than the EU average—but in some it is also faster or less expensive Time (days) Paid-in minimum capital (% of income per capita) 28 All 5 Slovak cities 18 Bratislava 26 Prague 16 24 Zagreb 22 14 Brno, Liberec, Plzen 20 All 5 Croatian cities Kosice Trnava 12 18 Ostrava Olomouc, Usti nad Labem 16 Presov, Zilina 10 14 EU average 12 8 Varazdin 10 EU average Osijek 6 8 Rijeka All 8 Portuguese cities 6 Split 4 Ireland (EU best) 4 Ireland (EU Best),a 2 2 all 7 Czech cities, all 8 Portuguese cities 0 0 2 3 4 5 6 7 8 9 Procedures (number) Cost (% of income per capita) 0.2 Croatian city 2.0 Czech city 4.0 Portuguese city 6.0 Slovak city 7.4 Source: Doing Business database. Note: The averages for the EU are based on economy-level data for the 28 EU member states. a. Three other EU member states have no minimum capital requirement: Cyprus, the Netherlands and the United Kingdom. And five others have a requirement amounting to less than 0.1% of income per capita: Bulgaria, France, Greece, Italy and Latvia. employment relationship (see formality In all four countries applications for companies are issued a code (renewable 13 in table 2.1). In three of the four coun- business and tax registrations can be for a fee) to access their registration tries the registration for business income submitted electronically, using elec- documents online. tax (see formality 6 in table 2.1) is tronic signatures, electronic identifica- integrated with commercial registration. tion (e-ID) or electronic mail boxes. In The use of intermediaries (notaries, In the Czech Republic, however, busi- Croatia, however, electronic applications lawyers, accountants) in the incorpora- nesses must register separately for this must be followed by the submission of tion process varies substantially among purpose. In Slovakia company founders documents in hard copy. At the end of the the four countries. In Croatia and the need to obtain a tax clearance before registration process most companies in Czech Republic companies must hire a applying for business registration. And Croatia, the Czech Republic and Slovakia notary to draft and certify the company in Croatia, where the requirement for a receive hard copies of their business documents. No such requirement exists company seal was recently abolished by and tax registration documents, which in Portugal, where standard incorporation law, most newly incorporated compa- they need in future interactions with documents are available to the public. nies nevertheless order one because a public or private entities. In Portugal no In Slovakia signatures can be certified seal is still needed in practice. physical documents are issued. Instead, by either a notary or a public registrar. STARTING A BUSINESS 21 TABLE 2.1  Portugal has managed to streamline and integrate most startup formalities and procedural steps in a one-stop shop Formalities Croatia Czech Republic Portugal Slovakia Yes, reservation 1. Name check Yes Included in 5 Yes done in most cases Yes (or certification 2. Notarization of company documents Yes Yes n.a. at registrar's office) 3. Tax clearance for company founders n.a. n.a. n.a. Yes 4. Trade licensing n.a. Yes n.a. Yes 5. Business registration Yes Yes Yes Included in 4 6. Tax registration Included in 5 Yes Included in 5 Included in 4 7. VAT registration Yes (notification) Included in 6 Yes (by default) Yes 8. Opening of bank account Yes Yes Yes Yes 9. Company seal Yesa n.a. n.a. n.a. 10. Statistical registration Yesa n.a. Included in 5 n.a. 11. Social security or pension registration Yes Yes Included in 5 Yes 12. Health insurance registration Included in 11 Yes n.a. Yes Three separate 13. Employee registration Included in 11 Included in 11 and 12 Included in 11 and 12 notificationsb Source: Doing Business database. Note: n.a. = not applicable. a. If done using HITRO.HR (“single access point”), the procedure can be included in procedure 5: business registration. b. For social security, workmen’s accident compensation insurance and the labor compensation funds (FCT and FGCT). In Portugal a certified accountant must Portugal all companies are registered for How does the process vary complete the tax registration process for VAT by default.6 within Croatia? a newly incorporated company. Croatia Business registration in Croatia involves is the only country among the four that Among the 25 cities benchmarked in this multiple agencies and intermediaries—the restricts access to its online business study, starting a business is easiest in court registry, notaries, commercial banks, registration system (to notaries and the eight Portuguese cities and most dif- HITRO.HR (single access point), the State employees of the one-stop shop). In the ficult in Prague (Czech Republic), Zagreb Statistical Office, the Tax Administration, Czech Republic notaries have privileged (Croatia) and Bratislava (Slovakia) (table the Institute for Pension Insurance and the access to the online business registra- 2.2). There are no variations in perfor- Institute for Health Insurance (figure 2.2). tion system—online registration using a mance among the cities benchmarked Croatian entrepreneurs have different simplified notarial deed is fastest, taking in Portugal. But there are substantial options for registering a new company. only one day—but the public can access differences among those in the other They can use HITRO.HR, a government and use the electronic platform as well. three countries. In the Czech Republic service available in all major Croatian cit- and Slovakia the variations are due to ies at counters established in the offices Most of the procedures benchmarked differences in efficiency among regional of the Financial Agency (FINA), a public can be completed in a short time (one to branches of the national tax authority in entity providing financial intermediation three days), in accordance with statutory issuing the business income tax and VAT and information technology services. They time limits uniformly enforced across cit- identification numbers. In Croatia they can have a notary complete the process ies within each of the countries. One are due to differences in how companies on their behalf. Or they can deal directly exception is the value added tax (VAT) register. In Split and Rijeka, the best with the court registry. Applications can registration in the Czech Republic and performing cities in the country, half or be filed electronically through the online Slovakia: applications are evaluated for more of companies register using a gov- business registration system only by risk, to assess the applicants’ capacity and ernment service that undertakes several notaries or HITRO.HR officials. No matter intention to undertake activities subject formalities on their behalf, with the aim which option entrepreneurs choose, incor- to VAT—a procedure that can take one to of providing simpler and faster start-up; poration documents must be notarized, three weeks. By contrast, in Croatia VAT in the other cities less than half of com- and supporting documents submitted in registration is a simple notification, and in panies do so. hard copy to the court registry. 22 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA TABLE 2.2  Starting a business in Croatia, the Czech Republic, Portugal and Slovakia—where is it easier? Distance to Cost Paid-in minimum frontier score Procedures Time (% of income capital City (Country) Rank (0–100) (number) (days) per capita) (% of income per capita) Braga (Portugal) 1 90.88 6 6.5 2.1 0.0 Coimbra (Portugal) 1 90.88 6 6.5 2.1 0.0 Evora (Portugal) 1 90.88 6 6.5 2.1 0.0 Faro (Portugal) 1 90.88 6 6.5 2.1 0.0 Funchal (Portugal) 1 90.88 6 6.5 2.1 0.0 Lisbon (Portugal) 1 90.88 6 6.5 2.1 0.0 Ponta Delgada (Portugal) 1 90.88 6 6.5 2.1 0.0 Porto (Portugal) 1 90.88 6 6.5 2.1 0.0 Split (Croatia) 9 89.55 6 6 7.4 12.5 Rijeka (Croatia) 10 87.59 7 8 7.4 12.5 Olomouc (Czech Republic) 11 85.56 8 16.5 1.0 0.0 Usti nad Labem (Czech Republic) 11 85.56 8 16.5 1.0 0.0 Osijek (Croatia) 13 85.50 8 10.5 7.3 12.5 Varazdin (Croatia) 14 85.38 8 11 7.3 12.5 Ostrava (Czech Republic) 15 85.31 8 17.5 1.0 0.0 Presov (Slovakia) 16 84.73 8 15.5 1.1 17.2 Zilina (Slovakia) 16 84.73 8 15.5 1.1 17.2 Brno (Czech Republic) 18 84.55 8 20.5 1.0 0.0 Liberec (Czech Republic) 18 84.55 8 20.5 1.0 0.0 Plzen (Czech Republic) 18 84.55 8 20.5 1.0 0.0 Trnava (Slovakia) 21 83.98 8 18.5 1.1 17.2 Kosice (Slovakia) 22 83.72 8 19.5 1.1 17.2 Prague (Czech Republic) 23 83.55 8 24.5 1.0 0.0 Zagreb (Croatia) 24 82.49 8 22.5 7.2 12.5 Bratislava (Slovakia) 25 81.97 8 26.5 1.1 17.2 Source: Doing Business database. Note: Rankings are based on the average distance to frontier score for the procedures, time, cost and paid-in minimum capital associated with starting a business. The distance to frontier score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia.” The data for Bratislava, Lisbon, Prague and Zagreb have been revised since the publication of Doing Business 2018. The complete data set can be found on the Doing Business website at http://www.doingbusiness.org. In Croatia the data for Split and Rijeka capture business registration using HITRO.HR services. The data for Zagreb capture in-person registration at the court, while the data for Osijek and Varazdin capture electronic registration. Among the five cities surveyed, Zagreb is HITRO.HR is used in setting up half or one procedure from the start-up pro- the only one where the majority of limited more of new limited liability companies cess. Moreover, in Split most applicants liability companies are not incorporated in Split and Rijeka, making it easier to also order a company seal at HITRO. using the online business registration start a business there. The take-up of HR—which has contracted the services system7—even though in-person regis- its services is lower in the other three of a local seal maker—thus avoiding a tration at the court takes more time (14 cities (figure 2.3). When entrepreneurs separate visit to a private vendor. days compared with 3 days on average use HITRO.HR, its officials can complete for online registration). Start-up in Zagreb the registration with the State Statistical As data for Split illustrate, completing requires eight procedures and more than Office on their behalf without a need for the start-up process through HITRO. three weeks. a separate application, thus eliminating HR takes only six procedures and six STARTING A BUSINESS 23 FIGURE 2.2  Business registration in Croatia involves multiple agencies and intermediaries 1 Check availability of company name 2 Have a notary prepare and 3 Register at the commercial court certify company documents Business Business Business founder HITRO.HR Court founder Notary founder Application to register at Court Court HITRO.HR Tax Administration Application to register at State Statistical Office Statistical Office 3.1 Register at the State Statistical Office 4 Order company seal 5 Open bank account 6 Register with Institutes for Pension 7 Register for VAT Insurance and Health Insurance and Foreign Trade (HZMO and HZZO) Authorized Authorized Authorized Authorized Tax Business representative Company representative Commercial representative HZMO HZZO representative Administration Operational seal shop bank Paper document flow Alternative paper flow Online data flow Source: “Summary Note—Policy Options for Reforming the Business Entry Regime” (World Bank Group, Washington, DC, October 2017). days. Indeed, if Split rather than Zagreb the registration process, which leads to registration. The court is obligated by represented Croatia in the Doing Business differences in practices. Take the simple law to register a company within 24 global ranking on the ease of starting process of choosing a company name. hours if the application is submitted a business, the country would jump 22 The availability of a company name can electronically (or within 15 days if it is places, from 87 to 65. be checked online at no charge. But submitted in person). But the electronic because of the lack of clear guidelines application needs to be followed by the Challenges remain that may be limiting for business names and the exercise of submission of the original documents the take-up of HITRO.HR services. HITRO. judicial discretion, more than 30% of in hard copy. After receiving the paper- HR officials can assist entrepreneurs in name applications are being rejected in work, the court prepares and delivers carrying out some of the steps needed Zagreb—though rejection rates are lower its final decision—which the company to complete a company registration, but elsewhere in the country.8 To avoid rejec- needs to have in hard copy for future they have limited authority in others. For tion and the need to redo the company interactions with public or private agen- example, HITRO.HR lacks the authority documentation, most entrepreneurs set- cies (such as the Tax Administration, to handle registrations on its customers’ ting up a new limited liability company the State Statistical office and banks). behalf with some of the agencies involved, in Zagreb or Osijek choose to reserve Receiving the final court decision can such as the Tax Administration and the a company name before proceeding take anywhere from one day in Split to Institutes for Pension Insurance and to incorporation. Receiving the court’s four days in Varazdin.10 Health Insurance. The requirement to decision on a company name can take have the articles of association prepared two to five days. In Varazdin, where rejec- The cost to start a business in Croatia and certified by a notary might also reduce tion rates are lower, a company name is ranges from 7.2% of income per capita HITRO.HR’s appeal to entrepreneurs, who reserved ahead of time for only a fifth of in Zagreb to 7.4% in Split and Rijeka. The often choose to complete the company new limited liability companies formed.9 difference comes from the fees for HITRO. registration process using notaries instead. HR services. Even if not using HITRO.HR Yet another variation among the cities for company registration, entrepreneurs Another variation across the cities stems comes from the time it takes to obtain from outside Zagreb need to visit HITRO. from the discretionary power of judges in the final court decision on company HR to apply for a statistical number 24 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA FIGURE 2.3  HITRO.HR is used in registering half or more of new limited liability A company performing general com- companies in Split and Rijeka mercial or industrial activities also needs to have its activities licensed. The Trade License Office must complete the Split registration process within five working days and typically does so in one day Rijeka (as in Ostrava) or two, for a fee of CZK 1,000 (EUR 39.42). Newly incorporated Osijek companies are also required to register for social security and health insurance. Varazdin Entrepreneurs can apply simultaneously for several of these registrations by using Zagreb the services offered at Czech Points (integrated filing centers for public agen- 0 20 40 60 80 100 cies, located at post offices throughout Limited liability companies registered by method used (%), July–December 2017 the country). But most prefer to apply separately with each agency. Employees Online at HITRO.HR Online by notary In person at court at Czech Points may lack familiarity with the laws and regulations governing each Source: Statistics provided by the Ministry of Justice of Croatia. registration and provide little guidance on applications. Moreover, submitting appli- because the State Statistical Office has The main factor driving the variation in cations through Czech Points involves an no branches outside the capital.11 time among the seven cities is tax registra- additional fee, and the documents are tion. Income tax registration usually takes sent to the relevant agencies by regular How does the process vary one to five days. But applicants can wait mail. So joint applications save neither within the Czech Republic? 10 days to be registered for both income money nor time. In the Czech Republic, across all seven cit- tax and VAT purposes in Olomouc and ies surveyed, starting a business involves Usti nad Labem—and 18 days in Prague, How does the process vary completing the same eight procedures, where application volumes are highest. within Portugal? at a cost of 1% of income per capita. The tax authority completes an evalua- Portugal has one of the fastest business The process takes longest in the capital, tion of the company’s assets, premises start-up processes in the EU. It has a almost a month. It takes eight days less and business plans and, if needed, initi- centralized commercial registry database in Olomouc and Usti nad Labem (figure ates a registration hearing to ensure that and allows a company to be incorporated 2.4). its founders have no history that might anywhere in the country no matter where raise questions about its risk. it is based. Across all eight cities surveyed, The first step is to hire a notary, as all limited liability companies must be regis- FIGURE 2.4  The time required to start a business varies substantially among cities in tered through a notarial deed. For simple Croatia, the Czech Republic and Slovakia cases the notary fee to prepare the deed Croatia Portugal Slovakia Czech Republic is a flat CZK 2,000 (EUR 78.83). For com- Time (days) panies with a more complex structure the notary fee is assessed as a percentage of 6 (Split) 6.5 (All cities) the start-up capital. Notaries also have the legal authority to register a company directly in the business registry, with no follow-up or verification by court officers. 15.5 (Presov, Zilina) 16.5 (Olomouc, Having a notary register the company Usti nad Labem) online avoids the need to pay a court fee 22.5 (Zagreb) of CZK 6,000 (EUR 236.50)—a notary 24.5 (Prague) fee of CZK 1,300 (EUR 51.24) is charged 26.5 (Bratislava) instead—and ensures that the process can be completed the same day. Source: Doing Business database. STARTING A BUSINESS 25 starting a business involves completing capita.13 This changed in 2006, when the well as to sign documents electronically. the same six procedures, which takes government implemented the Empresa Lawyers, notaries and ordinary citizens about a week and costs EUR 360 (the na Hora program as part of a larger can access the Empresa Online portal equivalent of 2.1% of income per capita). initiative of administrative simplifica- and complete the business registration Most procedures can be completed on tion and e-government (SIMPLEX). The process without leaving their offices or the spot, though in Lisbon and Porto an program introduced preapproved articles exchanging any paperwork. In addition, appointment may need to be made in of association (which eliminated the Empresa Online gives companies per- advance at the one-stop shop—Empresa legal obligation to provide public deeds manent access to up-to-date certificates na Hora (on-the-spot firm).12 Controls are or notary acts), substantially reduced and other company documents, eliminat- carried out afterward. The six procedures the administrative fees, created lists ing the need for paper forms. Anytime consist of registering the business at the of preapproved company names and a public or private entity requests such one-stop shop (figure 2.5), opening a eliminated outdated formalities such as documents from a company, the com- bank account, informing the tax author- registering the company books. Today, pany can simply send a code allowing ity of the commencement of activity and using a preapproved company name and access to them. registering employees with three differ- standard articles of association, an entre- ent entities—social security, workers’ preneur can set up a company at a single How does the process vary accident insurance and the labor com- contact point in one or two hours. All within Slovakia? pensation funds (FCT and FGCT). the information is automatically shared In Slovakia starting a business anywhere among the public agencies involved (reg- in the country requires the same eight The process wasn’t always so easy. istry, social security, tax authority). procedures and the same fees, equivalent Registering a business used to require to 1.1% of income per capita. Yet the time visiting several different public agencies, Moreover, business registration has it takes varies substantially among the completing 11 procedures, preparing 20 moved online—thanks to the introduction five cities benchmarked—ranging from forms and documents, waiting about of a new identification document that about two weeks in Presov and Zilina two and a half months and paying the enables citizens to identify themselves to almost four weeks in Bratislava (see equivalent of 13.5% of income per when using online public services as figure 2.4). Authorities must register a business FIGURE 2.5  How do the one-stop shops of Portugal and Slovakia compare? within a couple of days. But the deadlines for tax registrations are much longer, How the one-stop shop in Portugal functions allowing up to 30 days for business Statistical income tax and 21 days for VAT. office Register at one-stop shop using standard Social Registering for VAT requires that com- deed and security pany founders provide considerable preapproved name Tax information (such as a business plan, authority details on company assets and evidence of the adequacy of registered prem- Submit notification of activity start-up ises for commercial activity). The tax authority evaluates this information to determine whether the applicant meets How the one-stop shop in Slovakia functions the criteria for VAT registration. The aim Collect registration confirmations from is to prevent tax fraud by ensuring that a Trade licensing each agency company’s founders have no history that Check Draft Register at might raise questions about its risk. If the Court company and certify one-stop registry tax authority considers an application name deed shop to be risky, it might request a financial Tax authority guarantee as a hedge against any future VAT-related liabilities. VAT registration is fastest in Zilina, where it takes 5 days Register for VAT for companies that are deemed to be low risk. In Bratislava, where application vol- Source: Doing Business database. umes are highest, it takes about 10 days. 26 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Before company registration, a separate registration could take place in parallel visit to the tax authority is needed to WHAT CAN BE IMPROVED? with corporate tax registration, with the obtain written confirmation that the two registrations synchronized as part of company founders are not on the list of This chapter’s review of the business the initial company registration with the tax debtors. Obtaining this clearance start-up process in the four EU member court. This would eliminate the need for takes two days in Presov and five days in states points to several areas of possible separate VAT registration, reducing the Bratislava. improvement. Most recommendations burden on both the taxpayers and the tax apply to Croatia, the Czech Republic and authority. Some of these registration procedures Slovakia. Portugal already has a state- have been integrated. For example, of-the-art one-stop shop and electronic This kind of approach is already used in company founders can apply for busi- platform to help businesses incorporate Hungary, where VAT registration can be ness income tax registration at the (see box 1.1 in the overview). Going for- declared during the company incorpora- same time as commercial registration ward, it needs to ensure appropriate allo- tion process at the Court of Registration. at the one-stop shop set up at the Trade cation of resources to keep up with other Completing all three registrations takes Licensing Office (under the Ministry of leading economies as they continue to just one or two days. In Portugal all Interior). But tax clearance, VAT registra- improve in this area. companies are registered for VAT at tion—undertaken voluntarily by many incorporation, with smaller companies companies at start-up14—and employer Simplify VAT registration being exempted from VAT filing if their registration for social security and health CZECH REPUBLIC, SLOVAKIA turnover falls below a certain threshold. insurance remain separate procedures.15 In the Czech Republic and Slovakia In Croatia, while VAT registration remains And while the application process is joint, obtaining a VAT number takes as long as a separate process, obtaining a decision each authority—tax, court and licens- one to three weeks (figure 2.6). The rea- on the registration takes only one to two ing—communicates the outcome sepa- son is that tax officers undertake a thor- days. After registration, checks can be rately to the applicant (see figure 2.5). ough evaluation of a company’s founders, performed to assess the accuracy of the premises and declared business activity information submitted. In addition to a small fee for certifying to reduce the risk of noncompliance and signatures on company documents, fraudulent claims. Other countries also offer examples. In authorities charge fees for commercial Lithuania the founders of a new company registration: EUR 150 if the application is Streamlining risk screening at the point can complete VAT registration online in submitted online and twice that amount of registration would allow a reallocation three days or less when registering with if it is submitted in person. No fee is of the resources used to perform this the Register of Legal Entities. Similarly, charged for the other procedures. activity to other compliance actions. VAT in Latvia a VAT law in force since 2013 FIGURE 2.6  VAT registration is time consuming across cities in the Czech Republic and Slovakia Zilina Presov Trnava Kosice Usti nad Labem Olomouc Bratislava Ostrava Czech city Plzen Slovak city Liberec Brno Prague 0 2 4 6 8 10 12 14 16 18 20 Time to register for VAT (days) Source: Doing Business database. STARTING A BUSINESS 27 allows simultaneous filing of the com- usually assess other protections—in the minimum capital requirement. Among pany and VAT registration applications at company law, insolvency law and secured EU member states, five have no require- the commercial registry, and the process transactions law. ment: Cyprus, Ireland, the Netherlands, can be completed in three days. Portugal and the United Kingdom. Six In addition, requiring fixed amounts of others have a requirement amounting Reduce or eliminate the paid-in capital fails to take into account differ- to less than 0.1% of income per capita: minimum capital requirement ences in commercial risk. A small firm Bulgaria, the Czech Republic (box 2.1), for limited liability companies in the services industry does not present France, Greece, Italy and Latvia. Globally, CROATIA, SLOVAKIA the same risk as a large manufacturing 35 economies abolished or reduced their Slovakia’s paid-in minimum capital company in a volatile market. Moreover, paid-in minimum capital requirement requirement, at 17.2% of income per a minimum capital requirement can act over the past five years.19 capita, and Croatia’s, at 12.5%, remain as a barrier to entry—especially for small among the highest in the EU (figure 2.7). companies.18 Tying up funds to meet Review whether certain capital requirements where these are requirements can be eliminated Yet research shows that minimum capital sizable can have substantial opportunity for small and medium-size requirements provide little protection costs, forcing companies to limit spend- businesses to creditors and hardly any security for ing on such needs as hiring and training CZECH REPUBLIC, SLOVAKIA investors during insolvency.16 Recovery employees, investing in equipment or In the Czech Republic and Slovakia every rates are no higher in economies with developing services. newly established company needs to paid-in minimum capital requirements have its activities licensed. In most EU than in those without them.17 Before Today more than 100 economies bench- member states professional chambers making an investment decision, creditors marked by Doing Business have no paid-in grant licenses to businesses. More often, licenses are required only for companies in regulated or strategic sectors and FIGURE 2.7  Eleven EU member states require no paid-in minimum capital or only a industries. For others, a simple statement symbolic amount of own responsibility suffices. This is the Paid-in minimum capital (% of income per capita) case in Spain, where company founders Bulgaria 0 file a declaration stating that they comply Cyprus 0 with the law applicable in the relevant Czech Republic 0 France 0 sector. Rather than being applied across Greece 0 the board, licensing requirements should Ireland 0 be limited to activities affecting safety, Italy 0 Latvia 0 public health, the environment and the Netherlands 0 like—in each case on the basis of a clear Portugal 0 United Kingdom 0 public policy objective. Romania 0.5 Malta 1.1 Another requirement warranting review Finland 6.4 EU average 10.1 relates to paid-in minimum capital. In Poland 10.7 the Czech Republic, while the minimum Sweden 11.1 Austria 12.5 capital requirement for a newly registered Croatia 12.5 company is a symbolic CZK 1, the law Spain 12.5 Denmark 13.5 still requires that entrepreneurs form- Estonia 16.0 ing a company deposit the minimum Belgium 16.8 capital and provide a confirmation from Slovakia 17.2 Luxembourg 18 the bank that the capital contribution Lithuania 19.3 is held in the company’s bank account. Germany 32.4 Slovenia 39.6 This requirement could be eliminated by Hungary 43.8 allowing companies to register by just 0 10 20 30 40 50 declaring their authorized capital. While companies will continue to open bank Source: Doing Business database. accounts to operate their business, there Note: Bulgaria, the Czech Republic, France, Greece, Italy and Latvia have a paid-in minimum capital requirement may be no need to provide proof of one at amounting to less than 0.1% of income per capita. The average for the EU is based on economy-level data for the 28 EU member states. registration. 28 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA BOX 2.1 How reducing minimum capital requirements paid off in the Czech Republic In the Czech Republic before 2014, the paid-in minimum capital requirement for a new limited liability company was CZK 200,000 (equivalent to almost a third of income per capita) and at least CZK 20,000 for each founding partner. A 2014 amend- ment to Act 90/2012 Coll. on Corporations reduced these capital requirements to a symbolic CZK 1. What prompted this change? A desire to extend access to advantages stemming from this business form—limited liability, tax flexibility, relatively few corporate formalities—to a wider set of Czech entrepreneurs. The effort paid off: by one estimate the number of new limited liability companies in the Czech Republic grew by 9% between 2013 and 2014—from 22,227 to 24,266. While the number has continued to grow in every year since, the 9% rate was exceeded for the first time only between 2016 and 2017 (at 12%), when domestic and international economic conditions were much more favorable.a a. “Loni vzniklo 32 187 firem, nejvíc od roku 2007” [Last year, 32,187 companies were established, the highest since 2007], Bisnode, press release, January 29, 2018, https://www.bisnode.cz/o-bisnode/o-nas/novinky/loni-vzniklo-32-187-firem-nejvic-od-roku-2007/. In addition, once business registration is amount topped only by Italy, Cyprus, verify documents and identities—just as completed entirely online, the govern- Poland and Malta among EU member notaries are. A single verification should ment could form partnerships with com- states. About 90% of this cost comes suffice for a standard company. mercial banks, allowing them to link their from the mandatory step of hiring a notary online platforms with the online one-stop to prepare the company deed and other Moreover, with the introduction of online shop. Then entrepreneurs registering founding documents and to certify found- registration and digital signatures, the their business through the online one- ers’ specimen signatures. While the same need to verify personal identification stop shop could also access the bank of requirement exists in the Czech Republic, becomes obsolete. The Singapore reg- their choice to apply for a new account notary fees there are only a fifth of those in istrar, for example, simply assumes that online. Examples of such arrangements Croatia. The government could lower the businesses have no interest in going can be found in Norway and in Lithuania, cost of starting a business by developing through with a fraudulent registration. where starting a business has recently standard incorporation documents that The registry office uses postregistration become easier thanks to the ability to are flexible enough to accommodate most verification, informing people that a com- apply online for a bank account during the small businesses, thus allowing entre- pany has been created with their names electronic business registration process. preneurs to draft and file the documents listed as founders. Thus rather than veri- themselves. Eliminating the requirement fying every application, officials can focus Change is already under way in Slovakia to to have a notary prepare incorporation their time on the few fraudulent cases eliminate a procedural requirement. Today documents would be an important in which people are listed as company company founders need to obtain a clear- cost-saving measure, especially for small founders without their consent. ance from the tax authority confirming businesses. Larger companies, with more that they are not on the list of tax debtors. complex structures, could continue to Globally, almost half the economies Obtaining this clearance takes two to five consult professionals if needed. benchmarked by Doing Business—includ- days. A legislative amendment, set to take ing Denmark, France, Portugal, Romania effect on September 1, 2018, will eliminate Experience elsewhere shows that requir- and Slovakia—have no requirement for the requirement for applicants to prove ing businesses to use legal services for using legal or notary services in company a clear tax record and shift the burden of registration is not necessary to ensure registration, and more and more are mak- checks to a public agency (the court reg- accuracy and compliance with the law, ing the use of these services optional. istry). To ensure effective implementation, particularly for simpler forms such the tax authority will need to grant the as partnerships and limited liability Make company name reservation court registry access to a comprehensive companies. Portugal successfully made more transparent and rules based and up-to-date list of debtors. third-party involvement optional for CROATIA companies using standard incorporation The significant number of company name Make third-party involvement documents provided by the registry. applications being rejected in Croatia’s optional Slovakia allows registry staff to certify courts suggests a need to identify ways CROATIA, CZECH REPUBLIC statements of consent of the company to make name reservation more transpar- As measured by Doing Business, the cost founders and their specimen signatures. ent and rules based. Applicants should to start a business in Croatia amounts to Registrars are professionals who could be able to search the business registry more than 7% of income per capita—an be entrusted by law with the power to online, familiarize themselves with a set STARTING A BUSINESS 29 of objective rules on business names and details every month. As a result, several EU and Slovakia must register with social complete the name reservation in one member states simply assume a job start security and health insurance. These pro- online session, without having to interact when wage-related taxes are paid for the cedures could eventually be integrated with back-office staff. first time for an employee—and assume into the business registration process. In a job end when these are paid for the both these countries sole proprietors can For a model, Croatia could look to Australia, last time. To support this approach, they apply jointly for social security, health Canada and the United States, where in the require employers to include information insurance and tax registration at the one- early 2000s many states or provinces intro- on an employee’s job characteristics with stop shop at the trade licensing office. duced clear rules for ascertaining whether the payment of wage-related taxes rather The same option could be offered to legal proposed company names are identical to than reporting this information separately. entities as well. an existing one, contain a restricted word or phrase, or require special consent. These This approach further simplifies proce- In Croatia HITRO.HR officials can help rules have increased both transparency and dures compared with those in countries businesses register with the statistical efficiency in company name search and where the employer registration is inte- office, but they lack the authority to clearance. People can go online to check grated with the registration of economic register them for tax, pension and health the availability of the business name they activity, as is the case in Portugal. The insurance purposes. Giving HITRO.HR intend to use and then apply for it. This trig- reason is that not all businesses hire the authority to complete the entire busi- gers automated tests to determine whether people immediately after being founded. ness registration process could improve the name is available, resulting in automatic efficiency. rejection or acceptance. In Australia, in In Portugal companies must file three exceptional circumstances, the authority separate notifications at the start of each And in all three countries, continuing responsible for reviewing company names employment relationship, including with the integration efforts—with a single, (the Australian Securities and Investments social security and the labor compensa- consolidated online interface as the final Commission) may also perform a manual tion funds (FCT and FGCT). The country goal—would further simplify the process review and reject a name if it is an unknown could follow the example of Denmark, for starting a business. word or deemed to be offensive or poten- where simply reporting a wage payment tially misleading. for the first time is assumed to mean that Create a single online process the business has become an employer. for starting a business Alternatively, Croatia’s court registry could CROATIA, CZECH REPUBLIC, provide a list of preapproved company Alternatively, Portugal could allow compa- SLOVAKIA names from which applicants could choose. nies to submit information on employees’ Several EU member states have a one- Other countries offer examples. Portugal’s contracts at incorporation. In Spain, for stop shop allowing entrepreneurs to Empresa Online platform allows users to example, a new company can register register a business for all purposes: for select a preapproved name from the regis- employees through the online platform notification of the economic activity, for try’s website and proceed to the one-stop CIRCE at the moment of incorporation. VAT, for business income tax and as an interface to register their company. Similarly, in Côte d’Ivoire company found- employer. Portugal’s Empresa Online ers can enter the names and details of up to platform allows users to select a preap- Simplify notifications of the start 20 employees on the company registration proved company name and standard of employment relationships form, allowing them to register the employ- incorporation documents from the regis- PORTUGAL ees with social security at the moment of try’s website and proceed to the one-stop Employers in all EU member states are company registration and through one interface to register the company. The required to pay social security contribu- step. Another option for Portugal would be registry then automatically processes the tions, employee income withholding tax to integrate the three separate notifications tax, social security and labor registrations or both. And when new employees start a of an employment relationship into a single and publishes the incorporation notice. job, their employers are typically required registration. In Hungary companies register elec- to submit information on the wages paid, tronically with the Court of Registration the number of hours worked and certain Integrate postregistration and immediately obtain their business details of the employment contract. procedures into the income tax, VAT and statistical numbers. incorporation process In Slovenia, thanks to interconnectiv- The increase in job turnover has raised the CROATIA, CZECH REPUBLIC, ity between the systems of different costs of job start and end notifications. SLOVAKIA agencies, the electronic single window Meanwhile, automation has reduced the After completing business registration, (e-Vem) allows entrepreneurs to register costs of submitting the same contract new companies in the Czech Republic with the business registrar, the statistical 30 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA office, the tax authority and the health institute in a single step. BOX 2.2 Rolling out a platform for providing e-government services in Slovakia In Croatia, the Czech Republic and In Slovakia e-government services are provided through the central government Slovakia, however, there is no single portal slovensko.sk, a platform administered by the Office of the Vice Prime interface offering integrated procedures Minister for Investments and Informatization. The portal’s main purpose is to for registering a business for all purposes. supply a single electronic access point for requesting and providing public ser- And not all procedures can be completed vices. But not all public agencies and service providers are using the platform yet. fully online, with several documents still Users can access the central government portal through an ID chip card with a needing to be delivered in hard copy. To qualified electronic signature, which can be obtained from the government at no be effective, online platforms need to be cost; or through a qualified electronic signature mechanism on flash drive, which accompanied both by measures stimulat- is available from licensed private providers for a fee. The portal ensures the au- ing business take-up and by the possibility thentication of users and creates a secure transaction to direct data to the gov- of completing the entire process online ernment agency or service provider responsible for responding to their request. (that is, with no need for paper copies). The portal also sets up and manages “data boxes” (electronic mail boxes) for us- ers. Since June 2017 every newly incorporated company has been provided with a E-government services are being rolled data box at no cost. The data box stores electronic communications or documents out in all three countries. The availability from public offices (or the platform administrators). In principle, all public author- of online services has increased—such as ities are obligated to use data boxes when communicating with private entities. the online business registration system in But some agencies are still implementing the necessary changes. For example, the Croatia and the public administration por- tax authority has been granted additional time to adapt its online platforms. And tal slovensko.sk in Slovakia (box 2.2). And while all registered companies have been required to communicate electronically with the tax authority since January 2018, the agency still uses traditional mail the Czech Republic was among the first EU to deliver official documents. Mandatory two-way electronic communication is member states to adopt an e-government expected in the next phase of implementation for the system. act, which led to the introduction of an innovative “data box” system facilitating Sources: Information provided by the Office of the Vice Prime Minister for Investments and Informatization; communication and the sharing of official “O portáli” [About us], slovensko.sk, accessed May 29, 2018, https://www.slovensko.sk/sk/o-portali. documents between businesses and pub- lic authorities (box 2.3).20 BOX 2.3 E-government in the Czech Republic: using data boxes to enhance business communications In 2009 the Czech government, as part of its e-government agenda, introduced a system of “data boxes”—electronic mail boxes for exchanging official documents. The aim was to make communication between businesses and public authorities faster, less costly, and more transparent and reliable. The data boxes have progressively changed the way that businesses interact with state agencies in the Czech Republic. Since 2012 the Ministry of Interior has provided all companies, upon their incorporation, with a data box at no charge. Thus today, rather than using printed documents, entrepreneurs can submit forms and information from any device connected to the inter- net. For example, data boxes enable them to submit documents electronically for tax registrations, tax filings and social security registrations as well as to communicate electronically with the court, cadastre or city authorities. Each data box is identifiable through a unique combination of seven alphanumeric characters, and all data are encrypted. Using a data box requires no additional hardware or authentication technology. Every message transmitted through the data box system includes a time stamp and an electronic stamp from the ministry confirming its authenticity. Messages and documents are stored in the data box at no charge for the first 90 days. The period can be extended for a fee. Users may also subscribe to a paid “data safe” service, which allows them to archive files and messages. These can then be retrieved, with a new time stamp issued and used for official purposes. All public agencies in the Czech Republic are legally required to use data boxes as a primary means of communication and deliv- ery of official documents. And the system can be used for communication not only between public and private entities but also, for a fee, between private entities. Sources: Information provided by the Ministry of Interior of the Czech Republic; “Datové schránky” [Data boxes], Ministry of Interior of the Czech Republic, accessed May 29, 2018, http://www.mvcr.cz/clanek/datove-schranky-datove-schranky.aspx. STARTING A BUSINESS 31 National e-ID, which should be key Business Law Review 15, no. 5 (2004): 1031–35; NOTES Joelle Simon, “A Comparative Approach in enabling the use of e-government to Capital Maintenance: France,” European services, has already been introduced 1. As defined in EU Recommendation 2003/361, Business Law Review 15, no. 5 (2004): in Slovakia and is set to be introduced 1037–44; and Peter O. Mülbert and Max small and medium-size enterprises are Birke, “Legal Capital—Is There a Case against in mid-2018 in the Czech Republic. companies with a staff headcount of less the European Legal Capital Rules?” European than 250 and turnover of EUR 50 million or Croatia already has a system for identity less. Data are from “Statistics on Small and Business Organization Law Review 3, no. 4 verification, called e-Citizen, though its (2002): 695–732. Medium-Sized Enterprises: Dependent and 17. World Bank, Doing Business 2012: Doing implementation has been slow. Independent SMEs and Large Enterprises,” Business in a More Transparent World Eurostat, last updated January 26, 2018, (Washington, DC: World Bank, 2011). http:/ /ec.europa.eu/eurostat/statistics The next step should be to improve the 18. Andre Van Stel, David Storey and Roy -explained/index.php/Statistics_on_small Thurik, “The Effect of Business Regulations interoperability of e-government infra- _and_medium-sized_enterprises. on Nascent and Young Business 2. Doing Business database. structure to help address the fragmenta- 3. These are Belgium and Finland. Entrepreneurship,” Small Business Economics tion of services and databases between 28, no. 2 (2007): 171–86. 4. Lee Branstetter, Francisco Lima, Lowell 19. Doing Business database. the agencies involved in the start-up J. Taylor and Ana Venâncio, “Do Entry 20. Act 365/2000 Coll. on Public Administration Regulations Deter Entrepreneurship and Job process. This would allow the integra- Creation? Evidence from Recent Reforms Information Systems, adopted September 14, tion of business registration into a single 2000. in Portugal,” Economic Journal 124, no. 577 process with a single online submission (2014): 805–32. 5. Francesco Bripi, “The Role of Regulation on of information to satisfy the registration Entry: Evidence from the Italian Provinces,” requirements of all relevant agencies. An Working Paper 932 (Bank of Italy, Rome, applicant for business registration would 2013). 6. Smaller companies that do not meet the be able to file all the data needed through turnover threshold are exempted from VAT a single form, while a back-office system filing in Portugal. would automatically exchange the input 7. Data include all limited liability companies created in July–December 2017. Statistics data with all involved agencies and provided by the Ministry of Justice of Croatia. receive their outputs without additional 8. Data include all name reservations submitted interactions with the applicant. All output online using the online business registration system in October–December 2017. Statistics documents could be dispatched to the provided by the Financial Agency (FINA), applicant in electronic form, as is already Center for HITRO.HR. being done in Hungary. Companies could 9. Data include all limited liability companies established with and without name also be issued with a registration code— reservation in July–December 2017. Statistics as in Portugal, where institutions such as provided by the Ministry of Justice of Croatia. courts, banks, notary offices, and state 10. Data include all companies incorporated online using the online business registration and municipal authorities have online system in October–December 2017. Statistics access to the company registry and can provided by the Financial Agency (FINA), make their own checks of the legal status Center for HITRO.HR. 11. The application can also be submitted by mail, of companies that provide their registra- but this is rarely done in practice. tion code, without requesting additional 12. The appointment is made by phone and paperwork. usually given one or two days later. 13. Doing Business database. 14. VAT registration becomes mandatory for a company once its turnover exceeds EUR 49,790. 15. Act 264/2017 amending the Commercial Code 513/1999, section 1056—scheduled to enter into force on September 1, 2018—will give the commercial registry access to the debtors list maintained by the tax authority, thus eliminating the requirement for applicants to prove a clear tax record. 16. Geoffrey Elkind, “Minimum Capital Requirements: A Comparative Analysis” (U.S. Agency for International Development, Washington, DC, 2007). Other relevant studies include John Armour, “Legal Capital: An Outdated Concept?” European Business Organization Law Review 7, no. 1 (2006): 5–27; Friedrich Kübler, “A Comparative Approach to Capital Maintenance: Germany,” European Dealing with Construction Permits MAIN FINDINGS ƒƒ The ease of dealing with construction permits for a simple warehouse varies substantially among the cities benchmarked in all four countries. The most variation is observed in the time and cost required. ƒƒ Construction permitting is more complex in all four countries than in most other member states of the European Union. But 10 of the 25 cities benchmarked have a permitting process that is faster than the EU average. ƒƒ Among the Croatian cities, Varazdin has the fastest and least costly permitting process. Indeed, if represented by Varazdin rather than Zagreb in the Doing Business global ranking on the ease of dealing with construction permits, Croatia would move up by almost 20 places, from 126 to 107—surpassing Spain. ƒƒ The Czech Republic and Slovakia lag behind all other EU member states in the building quality control index. But their benchmarked cities would rank among the top 10 economies globally on the cost of dealing with construction permits, along with Estonia and Poland. ƒƒ Dealing with construction permits takes around five months in most of the Portuguese cities benchmarked, but around nine months in Braga and Coimbra. The gap is due mainly to differences in efficiency among municipal authorities—but also to more complicated local permitting regulations in Braga and Coimbra. DEALING WITH CONSTRUCTION PERMITS 33 C onstruction is one of the main simpler projects typically do not require a economic drivers in the European HOW DOES CONSTRUCTION second set of clearances. Union, contributing 9% of overall PERMITTING WORK IN THE GDP and providing 18 million direct FOUR MEMBER STATES? Construction inspections are manda- jobs.1 In 2017 the EU construction sector tory in all four member states. In the grew by 3.8% on average, the strongest In Croatia, the Czech Republic, Portugal Czech Republic, Portugal and Slovakia growth since the 2008 financial crisis.2 and Slovakia the construction regulation local authorities are responsible for Meanwhile, the construction industry includes a national framework, which construction oversight, while in Croatia has been at the forefront of regulatory outlines the general principles of territo- inspections are carried out by a central overhauls as governments respond to rial planning and of the building control authority (the Ministry of Construction). technological advances and changing systems, and local regulations, which In addition, in Croatia the construction requirements for urban planning. In the define the specific features of the building process must be overseen by an external past five years 10 of 28 EU member control systems within each municipal- supervisor, while in the other three coun- states have reformed their regulatory ity.4 In the Czech Republic and Slovakia tries this is done by an in-house engineer. frameworks to encourage efficient and construction permitting involves a two- sustainable building standards and to tier process requiring investors to obtain Among the four countries, dealing accommodate growing demand for elec- both a location permit and a construction with construction permits is easiest in tronic governance.3 permit.5 In the Czech Republic clearances Portugal, where on average it takes 14 must be obtained from the relevant public procedures and 189 days and costs 0.8% entities for both permits, while in Slovakia of the warehouse value (table 3.1). The WHAT DOES DEALING WITH CONSTRUCTION PERMITS MEASURE? To measure the ease of dealing with construction permits, Doing Business records the procedures, time and cost required for a small or medium-size business to obtain the approvals needed to build a commercial warehouse and connect it to water and sewerage. This includes all inspections and certificates needed before, during and after construction of the warehouse. To make the data comparable across locations, it is assumed that the warehouse is in the periurban area of the analyzed busi- ness city, that it is not in a special economic or industrial zone and that it will be used for the general storage of nonhazardous materials such as books. In addition, Doing Business compiles a building quality control index that measures the underlying quality of construction regulations and controls. The index accounts for one-fourth of the distance to frontier score for dealing with construction permits (see figure). Dealing with construction permits: measuring the efficiency and quality of building regulation Rankings are based on distance to frontier scores for four indicators Quality of Measures the accessibility of building regulations and the clarity building regulations of requirements for obtaining a building permit Days to comply with formalities to build a Quality control Assesses whether licensed or technical experts are involved in warehouse approving building plans before construction 25% Building quality Quality control Records the types of inspections legally mandated during 25% control during construction construction and whether they are carried out in practice Time index 25% 25% Cost Procedures Quality control Records final inspections legally mandated after construction and after construction whether they are carried out in practice Cost to comply Steps to comply with formalities, with formalities; Records which parties are held legally liable for structural defects Liability and and which are required to obtain insurance policies to cover as % of completed when final document is insurance regimes damages caused by defects warehouse value received Professional Assesses the qualification requirements for the professionals who certifications approve building plans and for those who supervise construction 34 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA process is fastest in Croatia (taking 153 How do results compare with other it reflects approvals that builders must days on average) but also most expen- EU member states and globally? obtain before applying for a building sive there (costing 9.2% of the ware- Dealing with construction permits permit. Indeed, builders in the Czech house value on average). Dealing with requires on average 22 procedures in Republic must obtain at least 12 pre- construction permits takes the longest in Croatia, 21 in the Czech Republic and 14 construction approvals from different the Czech Republic and Slovakia, but the in both Portugal and Slovakia. In all 25 authorities, the highest number among process also costs the least there, at only cities benchmarked in the four countries EU member states. 0.2% of the warehouse value. The Czech the process requires more procedures Republic and Slovakia have more scope than the average for EU member states In the Czech Republic, Portugal and for improvement on the building quality of 13 (figure 3.1). In Portugal the relative Slovakia dealing with construction per- control index. Both score 8 of 15 possible complexity of the process is due largely mits takes longer than the EU average of points, while Croatia receives 12 points to multiple inspections during construc- 174 days. Indeed, the process takes longer and Portugal 11. tion, while in the other three countries in Slovakia (282 days on average) than TABLE 3.1  Dealing with construction permits in Croatia, the Czech Republic, Portugal and Slovakia—where is it easier? Distance to Cost Building quality frontier score Procedures Time (% of control index City (Country) Rank (0–100) (number) (days) warehouse value) (0–15) Porto (Portugal) 1 74.04 14 159 0.6 11 Ponta Delgada (Portugal) 2 73.59 14 169 0.4 11 Evora (Portugal) 3 73.53 14 169 0.4 11 Faro (Portugal) 4 73.42 14 170 0.4 11 Lisbon (Portugal) 5 73.10 14 160 1.3 11 Funchal (Portugal) 6 72.83 14 159 1.5 11 Braga (Portugal) 7 66.58 14 259 0.8 11 Varazdin (Croatia) 8 66.20 21 112 5.3 12 Coimbra (Portugal) 9 65.93 14 265 0.9 11 Presov (Slovakia) 10 62.91 14 250 0.2 8 Trnava (Slovakia) 11 61.39 15 258 0.2 8 Osijek (Croatia) 12 61.10 22 143 6.8 12 Rijeka (Croatia) 12 61.10 22 136 7.2 12 Kosice (Slovakia) 14 60.74 14 280 0.2 8 Bratislava (Slovakia) 15 59.33 14 300 0.2 8 Brno (Czech Republic) 16 57.90 20 236 0.2 8 Zilina (Slovakia) 16 57.90 14 320 0.2 8 Usti nad Labem (Czech Republic) 18 57.24 20 245 0.3 8 Ostrava (Czech Republic) 19 56.89 20 250 0.2 8 Liberec (Czech Republic) 20 56.67 21 239 0.3 8 Prague (Czech Republic) 21 56.17 21 246 0.2 8 Plzen (Czech Republic) 22 55.38 21 257 0.2 8 Zagreb (Croatia) 23 54.77 22 146 11.7 12 Olomouc (Czech Republic) 24 54.45 21 270 0.2 8 Split (Croatia) 25 43.67 23 227 15.1 12 Source: Doing Business database. Note: Rankings are based on the average distance to frontier score for the procedures, time and cost associated with dealing with construction permits as well as for the building quality control index. The distance to frontier score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia.” The data for Bratislava, Lisbon, Prague and Zagreb have been revised since the publication of Doing Business 2018. The complete data set can be found on the Doing Business website at http://www.doingbusiness.org. DEALING WITH CONSTRUCTION PERMITS 35 FIGURE 3.1  In all 25 benchmarked cities, dealing with construction permits requires more procedures than the EU average Time (days) Building quality control index (0–15) 320 Zilina 15 300 Bratislava Luxembourg (EU and global best)a 280 Kosice 14 Olomouc Coimbra 260 Braga Trnava Plzen Presov Ostrava Usti nad Labem Prague 240 Liberec 13 Brno Split 220 All 5 Croatian cities 12 200 180 Faro Evora EU average EU average Ponta Delgada 11 160 Lisbon Porto All 8 Portuguese cities Zagreb Funchal 140 Osijek Rijeka 10 120 Varazdin 100 9 80 All 7 Czech cities, Denmark (EU best) all 5 Slovak cities 60 8 6 8 10 12 14 16 18 20 22 24 Procedures (number) Cost (% of warehouse value) 0.2 Croatian city 5.0 Czech city 10.0 Portuguese city Slovak city 15.1 Source: Doing Business database. Note: The averages for the EU are based on economy-level data for the 28 EU member states. For practical reasons the figure groups cities with similar times or costs in some cases. See table 3.1 for more precise data on the indicators. a. New Zealand and the United Arab Emirates also have a score of 15 on the building quality control index. in any other EU member state except Dealing with construction permits is six main areas (for a possible 15 points): Cyprus (507 days)—and almost twice as much less costly on average in the Czech quality of building regulations (2 points); long as in Croatia (153 days on average). Republic (0.2% of the warehouse value), quality control before (1), during (3) and Where the process involves a high num- Slovakia (0.2%) and Portugal (0.8%) after construction (3); liability and insur- ber of preconstruction approvals, as is than the EU average (2.0%). But it is ance regimes (2); and professional cer- the case especially in the Czech Republic, much more expensive in Croatia (9.2%), tifications (4). Croatia scores 12 points, this often means frequent and time- largely because of high costs associated surpassing the EU average (11.6)—largely consuming revisions of the project design with hiring external contractors and pay- because of robust qualification require- and a longer overall permitting process. ing infrastructure development fees. ments for the professionals involved in In Portugal the time required for dealing approving building plans and supervising with construction permits (189 days on Among the four countries, Croatia per- construction (table 3.2). Portugal scores average) exceeds the EU average largely forms best on the building quality control 11 points; compared with Croatia, it has because of a lengthy architectural project index, which assesses the quality of fewer qualification requirements for the approval process at the municipality. construction regulations and controls in professionals involved in approving plans 36 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA and supervising construction. The Czech Portugal have building control authorities university degree, be registered with Republic and Slovakia both receive 8 conduct random inspections throughout the professional association and pass a points. Their lower scores reflect a lack the construction process. certification exam. Portugal requires only of mandatory higher education require- that they have a university degree and be ments for professionals approving plans All four countries legally mandate registered with the professional associa- and supervising construction, though final inspections after construction. tion. The Czech Republic and Slovakia do both countries require a minimum Croatia holds the architect or engineer not specify a university degree as a man- number of years of experience and a in charge of drawing the plans and the datory requirement; instead, they require qualification examination. There is no construction company legally liable only a certification exam and a minimum subnational variation in scoring within for structural defects discovered in a number of years of experience. the four countries, as all areas assessed building after it has been occupied. The are covered by national regulation. Czech Republic, Portugal and Slovakia How does the process vary additionally hold the construction within Croatia? All four countries make building regula- supervisor liable. But none of the four Among the five Croatian cities, construc- tions available online and clearly specify countries require any of the legally tion permitting is fastest and easiest in the requirements for a building permit. liable persons to obtain insurance to Varazdin—and it is most burdensome in But only Portugal has local authorities cover possible structural defects dis- Split, as a result of more preconstruction staffed with licensed architects and engi- covered once the building is in use. approvals, slower processing times and neers who verify that building plans are in more costly municipal utility contribu- compliance with the building regulations. The main variation in index scores among tions. Entrepreneurs dealing with con- All four countries require a supervising the four countries results from the qualifi- struction permits can expect to complete engineer to be legally responsible for cation requirements for the professionals 21 procedures in Varazdin but 23 in Split. supervising construction, either an in- responsible for approving permits and In Split and Zagreb they must obtain house engineer (as in the Czech Republic, supervising construction. Croatia requires a clearance from the waste collection Portugal and Slovakia) or an external that these professionals have a minimum department—a procedure not required one (Croatia). In addition, Croatia and number of years of experience, have a in the other three Croatian cities. This TABLE 3.2  Croatia has the most robust building quality control mechanisms among the four member states Czech Croatia Portugal Slovakia     Republic Building quality control index (0–15) 12 8 11 8 Quality of building Are building regulations easily accessible? 1 1 1 1 regulations (0–2) Are the requirements for obtaining a building permit clearly specified? 1 1 1 1 Quality control Is a licensed architect or licensed engineer part of the committee or team before construction 0 0 1 0 that reviews and approves building permit applications? (0–1) Quality control Are inspections mandated by law during the construction process? 1 1 1 1 during construction (0–3) Are inspections during construction implemented in practice? 1 1 1 1 Quality control after Is a final inspection mandated by law? 2 2 2 2 construction (0–3) Is a final inspection implemented in practice? 1 1 1 1 Is any party involved in the construction process held legally liable for latent 1 1 1 1 Liability and defects once the building is in use? insurance regimes Is any party involved in the construction process legally required to obtain a (0–2) latent defect liability—or decennial (10-year) liability—insurance policy to 0 0 0 0 cover possible structural flaws or problems in the building once it is in use? Are there qualification requirements for the professional responsible for Professional verifying that the architectural plans or drawings are in compliance with the 2 0 1 0 certifications building regulations? (0–4) Are there qualification requirements for the professional who conducts the 2 0 1 0 technical inspections during construction? Source: Doing Business database. Maximum points obtained. DEALING WITH CONSTRUCTION PERMITS 37 clearance is typically required only when required to obtain a project approval from four regional cities at HRK 39,210 (EUR the waste removal containers are located the Ministry of Interior Affairs (for fire 5,271) but much higher in Zagreb at HRK on public land, which is usually the case safety) ranges from 7 days in Osijek to up 65,272 (EUR 8,775). in Split and Zagreb. And in all the cities to 25 days in Zagreb. except Varazdin and Zagreb builders How does the process vary receive a random work safety inspection The cost of dealing with construction within the Czech Republic? from the labor inspectorate. In Varazdin permits varies substantially among the An entrepreneur dealing with construc- and Zagreb this type of inspection, while Croatian cities, ranging from 5.3% of the tion permits in the Czech Republic can possible, is not common for simple con- warehouse value in Varazdin to 15.1% in expect to complete 20 procedures in struction projects. Split. This variation stems from two cost Brno, Ostrava or Usti nad Labem but 21 components: the municipal utility fee and in Liberec, Olomouc, Plzen or Prague. The Varazdin has the fastest construc- the water contribution to the state com- additional procedure in the last four cities tion permitting process among the pany Croatian Waters. These two cost is an informational meeting that inves- five Croatian cities. It takes only 112 components account on average for about tors typically request with the municipal days to complete, thanks to efficient 70% of the total cost of dealing with con- environmental department to clarify coordination between the municipality struction permits in Croatia (figure 3.2). potential environmental impact assess- and the public authorities that provide The municipal utility fee is determined ment requirements. the required clearances. Obtaining a independently by each municipality and building permit takes only 15 days in is used for developing public infrastruc- Among the seven Czech cities, dealing Varazdin—but about a month in Osijek, ture in the area affected by the new with construction permits is easiest and Rijeka and Zagreb and as long as three construction. The fee ranges from as low least time consuming in Brno, where months in Split. Split has one of the as HRK 58,520 (EUR 7,867) in Varazdin completing the 20 procedures takes 236 most dynamic construction scenes in to five times as much in Zagreb at HRK days. The greater speed is due largely to Croatia, with many complex construc- 292,613 (EUR 39,339) and eight times faster processing times for obtaining a tion projects under development. This as much in Split at HRK 458,621 (EUR zoning permit, completing the required has put a strain on the local construction 61,657)—reflecting differences among preconstruction approvals and obtaining permitting personnel and resulted in the five Croatian cities in infrastructure the utility connections. In Brno the zoning backlogs in processing permit applica- development and maintenance goals. In permit is issued in 55 days, compared with tions. It is also among the main reasons 2016 Varazdin reduced the utility fee by an average of 60 days in the other Czech that the overall construction permitting half for industrial buildings, in an effort to cities, and completing all required pre- process takes longer in Split than in the encourage new investments.6 The con- construction approvals takes around 159 other four cities. But entrepreneurs in tribution to Croatian Waters is set at the days, about 10 days less than in the other Split have also pointed to administrative national level and is used for maintaining cities. In general, preconstruction approvals inefficiencies at the municipality and and developing water and sewerage are the most time-consuming part of the slow processing of the fire safety clear- infrastructure.7 This fee is the same in the process in all the Czech cities (figure 3.3). ances required for a building permit as factors that exacerbate the backlog in the approval process. FIGURE 3.2  Infrastructure development fees account on average for nearly 70% of the cost of dealing with construction permits in Croatia The time required to obtain a water Varazdin and sewerage connection also varies in Croatia. As a result of differences in Osijek operational capacity at the local utility Rijeka providers, this time ranges from 10 days in Varazdin to 30 days in Split. Similar Zagreb differences show up in the time to obtain technical conditions and clearances from Split national authorities, stemming in part 0 100 200 300 400 500 600 from differences in staffing and work- Cost to deal with construction permits (HRK, thousands) load at their local branches. Getting a clearance from the national electric grid Hiring external contractors Infrastructure development fees Others company (HEP) takes 8 days in Varazdin but up to 25 days in Osijek. And the time Source: Doing Business database. 38 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA FIGURE 3.3  Approvals required before construction take around six months in the time required to obtain the approvals Czech Republic for the construction project and for the building permit from the municipality. Brno Together, these two procedures take the Liberec shortest time in Porto (100 days), fol- lowed by Evora and Lisbon (105 days). Usti nad Labem They take around four months in Faro, Prague Funchal and Ponta Delgada—and up to half a year in Braga and Coimbra. Ostrava Plzen Overall among the eight Portuguese Olomouc cities, dealing with construction permits is easiest in Porto and most difficult in 0 50 100 150 200 250 300 Coimbra. Porto has among the most Time to deal with construction permits (days) transparent and user-friendly regula- Before construction Utilities After construction tions in the group, and it makes zoning maps and process guides available Source: Doing Business database. electronically. More importantly, Porto is the only city among the eight where One reason for the faster approval process the evidence number. In Ostrava and entrepreneurs can apply for a building in Brno is the municipality’s more efficient Plzen, however, obtaining the evidence permit through an electronic platform. communication with investors and other number takes around two weeks, largely This allows the municipality to review the stakeholders. Finally, obtaining a water and because of inefficiencies in communica- building plans and process the building sewerage connection takes only 18 days in tion between different departments at permit application at the same time, sav- Brno, but 30 days on average in the other the municipality. ing considerable time for entrepreneurs. cities. The utility company in Brno takes less time to identify potential connection Dealing with construction permits is In contrast, the local permitting regula- points because it has more up-to-date relatively inexpensive in all the Czech tions (urbanization plans) in Braga and infrastructure maps than those in the other cities, with an average cost of around Coimbra are difficult for entrepreneurs cities. 0.25% of the warehouse value. A small to navigate, which often leads to errors variation in cost stems mainly from the in project documentation and thus sub- Dealing with construction permits takes utility connection fees. Connecting to stantial delays in the permitting process. the most time in Olomouc—almost five the water and sewerage network costs In Coimbra builders face additional weeks more than in Brno. In total, 270 around CZK 4,000 (EUR 158) in Brno but uncertainties because of the complexity days are required to complete the 21 around CZK 7,000 (EUR 276) in Usti nad of the formulas for building permit fees. procedures. The process is slowed by Labem. The engineers who provide the delays in obtaining a clearance from the utility connection typically bill between The approval of construction projects fire department, which takes 45 days six and eight hours of work in all the cities involves political decision making in in Olomouc but around 30 days or less and also provide the water meters and all the Portuguese cities, at the level in the other cities. The longer wait in other equipment. Variations in labor and of the urbanism councilor or even the Olomouc is due in part to the shortage of equipment costs from city to city lead mayor. So the process is prone to political technical staff at its fire department. to the differences in the total cost of the stalemates that affect the city council’s connection. ability to approve construction projects.8 After construction is completed, builders Moreover, projects with a large social or must obtain an occupancy permit and How does the process vary economic impact might get prioritized, an evidence number (a tracking number within Portugal? which could adversely affect smaller con- assigned to a new building for use in offi- Dealing with construction permits struction projects. These circumstances cial records), both of which are required requires 14 procedures in all eight cities exist in all the cities benchmarked in for registration with the cadastre. In all benchmarked in Portugal. The process Portugal, but they affect more entrepre- seven cities the occupancy permit is is fastest in Funchal and Porto, where neurs in Braga and Coimbra. issued within two weeks after the final it takes only 159 days, and slowest in inspection, and in Prague and four other Coimbra (265 days) and Braga (259 Other variations in time among the eight cities it takes an additional week to obtain days). The main differences arise in the Portuguese cities relate to the procedures DEALING WITH CONSTRUCTION PERMITS 39 for connecting to utilities and register- from an average of around EUR 1,500 in building permits is the most time-con- ing the building. Obtaining the water six of the cities to around EUR 8,000 in suming part of the process in all five cities and sewerage connection takes about Coimbra and Lisbon (figure 3.4). The dif- benchmarked, accounting for around 60% a month in Braga, Coimbra, Lisbon and ference stems from variations in the level of the total time required for dealing with Porto, but just two weeks in the other of infrastructure availability. In Braga, construction permits (figure 3.5). four cities. This difference reflects the Coimbra and Lisbon gaps in the infra- availability of inspection engineers at the structure network result in higher costs Dealing with construction permits takes local water and sewerage companies and related to the extension of the water and 15 procedures in Trnava but 14 in the the complexity of the connection works, sewerage networks. In the other cities the other four cities benchmarked in Slovakia. both of which vary depending on the size public infrastructure is available in most Trnava is the only one where investors of the city. On average, the connection cases, so entrepreneurs do not have to consult with the local building office takes almost twice as much time in the cover the cost of extension works. Porto about their planned project before start- larger cities as in the smaller ones. has a “100% infrastructure coverage” ing the application process. In practice policy: the municipality covers the cost this additional step does not increase the Dealing with construction permits is of extension works in areas where there time required to deal with construction most expensive in Funchal (at 1.5% of is no public infrastructure, minimizing the permits and is commonly thought of as the warehouse value) and least costly in burden on entrepreneurs. a precautionary step to avoid even longer Ponta Delgada (0.4%). The main drivers processing times. of the variation in cost are the building How does the process vary permit fee and the utility connection cost. within Slovakia? There is much variation in the time The building permit fee is determined Among the Slovak cities, the permitting required to connect to the water and by each city and ranges from EUR 105 process is fastest and easiest in Presov, sewerage networks and to register the in Coimbra to EUR 11,368 in Funchal. In where it can be completed in 250 days. newly built warehouse with the local the other cities this fee averages around In Zilina, which is similar in size to Presov, cadastral office. Obtaining the new util- EUR 2,000. Coimbra reduced its build- completing the process takes 70 days ity connections takes around a week in ing permit fee from EUR 1,000 to EUR longer, largely because of delays in obtain- Bratislava, Presov and Trnava but almost 105 in 2017.9 The aim was to invigorate ing the location and building permits.11 two weeks in Kosice and a month in construction activity in the city, which While obtaining these two permits takes Zilina. The utility provider in Zilina takes has dropped by some 80% since 2007.10 only 120 days in Presov, it takes 165 days about three weeks to prepare the service in Zilina—in part because of a shortage of contract, while those in the other cities The cost for the water and sewerage con- adequately trained staff at the permitting take only one or two. nection also varies substantially, ranging authorities. Obtaining the location and Registering the building takes the least FIGURE 3.4  Among the Portuguese cities, obtaining the water and sewerage time in Trnava, about 50 days. Trnava’s connection is most costly and time consuming in Lisbon and Coimbra cadastre is staffed with experienced professionals and has efficient case Time (days) Cost (EUR, thousands) management practices with low levels of 35 9 backlog, which partly explains the faster 8 registration process. Completing this 30 7 final step takes slightly longer in Kosice, 25 around 55 days, while it takes 60 days in 6 the rest of the cities. 20 5 15 4 The cost of the water and sewerage con- 3 nection, while relatively small, also varies 10 across the cities, ranging from EUR 115 in 2 5 Trnava and around EUR 300 in Bratislava 1 and Zilina to EUR 500 in Kosice and 0 0 Presov. This variation reflects price Evora Faro Funchal Ponta Coimbra Porto Braga Lisbon Delgada schedules that are set independently by Time Cost each utility and the varying hourly rates for labor required to complete a technical Source: Doing Business database. inspection of the new connection. 40 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Clarify and better communicate FIGURE 3.5  Obtaining the location and building permits accounts for around 60% of the total time required for dealing with construction permits in Slovakia the guidelines and requirements for dealing with construction Presov permits CROATIA, CZECH REPUBLIC, Trnava PORTUGAL, SLOVAKIA Kosice Entrepreneurs in all four member states cite the complexity of regulation as a Bratislava major hindrance in dealing with con- struction permits. A typical construction Zilina project entails compliance with national 0 50 100 150 200 250 300 350 laws, local regulations and the technical Time to deal with construction permits (days) standards of different public agencies— an arduous task for builders, especially Obtain location permit Obtain building permit Other procedures small businesses. To simplify this task and prevent delays due to incomplete Source: Doing Business database. applications or errors in project docu- mentation, economies around the world WHAT CAN BE IMPROVED? status report tools. As a result, among are introducing step-by-step process the Portuguese cities Porto has the fast- maps that help entrepreneurs navigate This chapter’s review of the construction est processing time for approving project the regulatory complexities. In New York permitting process in Croatia, the Czech documentation and issuing building City, for example, the city government Republic, Portugal and Slovakia points to permits, despite having a substantially has introduced a simple online survey several areas of possible improvement. heavier workload than the other cities.14 tool that asks the investor targeted Some recommendations apply to several Faro is working in collaboration with six questions about the proposed construc- countries or to all four, others to only one other municipalities in the Central Algarve tion and prints out an exact map of the of them. to develop a comprehensive online plat- procedures and regulatory compliance form, scheduled to become operational requirements.15 For a knowledgeable Introduce or improve electronic in 2019. Other cities in Portugal and the investor, completing the survey takes permitting systems other member states could follow Faro’s only a few minutes, and it saves hours of CROATIA, CZECH REPUBLIC, example: given the potentially prohibitive management time and effort. PORTUGAL, SLOVAKIA costs of developing and implementing an To increase the efficiency of construction electronic platform, pooling resources to In Portugal, Porto has come up with a dif- permitting, the four countries could transi- share the costs makes good sense. ferent solution—a detailed online manual tion to a fully electronic process. Electronic for going through the construction per- permitting systems are becoming increas- Croatia has already set up an electronic mitting process, complete with process ingly common around Europe, and the permitting system (e-dozvoly). But the maps that cover a variety of possible sce- European Commission has defined elec- system has not been fully adopted by narios.16 But Faro is the only city among tronic application for building permission the municipalities nor is it commonly the eight benchmarked in Portugal that as one of 20 primary e-government ser- used by practitioners. Public and private has an online fee simulator that helps vices.12 In Hungary, for example, all appli- sector stakeholders have reported tech- investors understand the building permit cants for a building permit are required nical issues, but they have also suggested fees.17 Coimbra is another city that could to submit their application through the that inadequate training among local benefit from such a simulator, given the Building Regulatory Support Electronic municipality staff has prevented use of reported complexity in calculating the Documentation System (ÉTDR), upload- the system’s full potential. Practical train- building permit fees there. ing all the technical and architectural ing programs should therefore go hand plans. The building department then asks in hand with any efforts to improve the Introduce mandatory insurance other authorities to review and approve system’s technical capabilities. In addi- requirements to cover structural the plans through the system.13 tion, public-private workshops might be defects helpful for assessing the functionality of CROATIA, CZECH REPUBLIC, In Portugal, Porto has a fully functional the electronic system and explaining its PORTUGAL, SLOVAKIA and widely used electronic application benefits and capabilities to a wider range In all four member states the builders and system, equipped with tracking and of practitioners. architects involved in the construction of DEALING WITH CONSTRUCTION PERMITS 41 a building are held liable by law for struc- also register the building with the tax stakeholders might also be needed, to tural flaws or problems in the building, authority. gain more insight into the functionality yet obtaining an insurance policy to cover of the online platform and reveal areas possible structural flaws once it is in use is The Czech Republic, Portugal and needing improvement. not mandatory. Insurance to cover costs Slovakia could follow Croatia’s example arising from structural defects benefits in streamlining the registration procedure Consolidate preconstruction clients as well as contractors and encour- by improving the coordination between approvals ages more construction, particularly for the municipality and the real estate CROATIA, CZECH REPUBLIC, small and medium-size construction registry or cadastre—and, in Portugal, the SLOVAKIA companies.18 tax authority as well. Introducing better Before applying for a building permit, coordination protocols between these entrepreneurs in Croatia, the Czech The four member states could follow agencies and encouraging electronic Republic and Slovakia have to go through the example of Denmark or France, both document exchange could increase the anywhere from 5 to 12 approvals and early adopters of mandatory insurance efficiency of postconstruction proce- verifications of the project documenta- regimes. Both require decennial (10- dures and save entrepreneurs up to 40 tion. These preconstruction approvals are year) insurance. Denmark requires this days in the Czech Republic and Slovakia required to ensure that the main project insurance for the construction of new and close to 10 days in Portugal. complies with the zoning rules, with envi- permanent dwellings. The municipal- ronmental, fire safety and public health ity checks the validity of the insurance In both the Czech Republic and Portugal standards and with other such require- before issuing the building permit and, the necessary infrastructure is already in ments. In addition, entrepreneurs must after the completion of construction, place. The Czech Republic has an online obtain detailed verifications from each when issuing the occupancy permit. registry for land identification, addresses utility provider on the availability of the France applies the same requirement to and property (RUIAN), which allows required capacity for the proposed build- all new buildings, regardless of their pur- the building office to enter information ing. All the public entities involved in the pose.19 It requires two levels of coverage about a new building after issuing the approval process can potentially request for structural defects—insurance taken occupancy permit. Once the system modifications of the main project—modi- out by the owners of the building (dom- is updated, the official in the cadastral fications that might lead to changes in mage ouvrage) and decennial insurance office can register the new building. This other sections of the project and there- taken out by the builders. system could be further enhanced by fore require additional verifications from eliminating the need for the investor to different agencies. Both entrepreneurs Streamline building registration submit a request for registration, which and public authorities have cited these procedures by improving takes time to record and process. issues as among the main hindrances in communication channels the construction permitting process as between public agencies Similarly, in Portugal the tax authority well as the main reason for the lengthy CZECH REPUBLIC, PORTUGAL, has access to an online system (Sistema approval processes, especially in the SLOVAKIA de Plantas de Arquitetura, or SPA) that Czech Republic and Slovakia. Croatia is the only country among the allows it to request the approved archi- four member states that does not require tectural plans for a building directly from These three countries could consider property registration as a separate step the city council, eliminating the need introducing a single point of contact in dealing with construction permits— for the investor to register the building at one of the public authorities to take because the municipality automatically at the tax authority. But the platform is responsibility for both coordinating the completes this registration after issuing not yet widely used by municipalities project approval process with all the the occupancy permit. An electronic land because of lack of coordination between relevant entities and keeping track of the registry and cadastral information system the permit-issuing authorities and the tax timeline for the approvals. Economies (ZIS) allows geodetic engineers to submit authority as well as delays in processing around the world have been adopting the updated cadastral information elec- the requested forms. This makes it more this kind of “single window” principle to tronically, sparing the investor the need practical for entrepreneurs to submit the solve similar problems. A recent reform to go through the registration process. By documents in person. Portuguese cities in Serbia, for example, consolidated the contrast, registering a new building takes could encourage greater use of the online issuance of the technical conditions for on average 57 days in Slovakia and 27 platform by designing better coordina- utilities, traffic and public safety in a days in the Czech Republic. In Portugal tion frameworks between agencies and single document called “the location con- completing the same process takes only gradually phasing out paper commu- ditions.”20 This reduced both the number around a week, but investors then must nication. A process review involving all of clearances required from individual 42 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA agencies and the overall time for dealing permit-issuing agencies that are Consider ways to reduce the with construction permits.21 adequately staffed and technically com- burden on entrepreneurs for petent, with professional case manage- infrastructure development As an initial step toward implementing ment know-how and technology. Builders CROATIA a single-window approval mechanism, in the Czech Republic and Slovakia cited In Croatia the fees for infrastructure municipalities in the Czech Republic and inadequately trained or staffed permit- improvement (the municipal contribution Slovakia could improve the effectiveness issuing offices and underutilized technol- and the payment to Croatian Waters) of an existing practice of preliminary con- ogy as among the reasons for delays in add up to around HRK 250,000 (EUR sultations. These consultations take place dealing with construction permits. 33,600) on average, accounting for in an informal setting and serve more as a about 70% of the cost of dealing with relationship management tool than as an More robust qualification requirements construction permits. These contribu- informative guide to the permitting pro- for the professionals involved in con- tions help municipalities make the neces- cess. Adding a level of technical expertise struction permitting and control might sary investments in public infrastructure from the key permitting authorities could also be needed. In the Czech Republic (roads, public spaces, utility networks) make these preliminary consultations and Slovakia the professionals approving to accommodate the potential growth in more effective and save time and effort building plans and supervising construc- demand resulting from new construction. for entrepreneurs. tion are required only to have three years But excessive infrastructure development of experience and to pass a qualification fees tend to reduce investment in com- The Czech Republic, where more pre- exam. In Croatia and Portugal, by con- mercial properties, adversely affecting construction approvals are required trast, these professionals are required to job growth.26 than in any other EU member state, have a university degree in architecture has introduced a web-based platform or engineering. Introducing a requirement Croatia could consider reducing or called UtilityReport to enable investors for higher education would automatically eliminating these fees or applying more to request information from utilities and increase the technical competency at the targeted criteria, backed by approved or other infrastructure owners electroni- permitting agencies. Globally, more than planned capital expenditure programs cally. But the service is not widely used 80% of economies require a university directly linked to the potential use of the because it lacks complete geographic degree in architecture or engineering for funds collected. This would help ensure coverage and full participation from util- professionals reviewing building plans.23 that the system is not punitive toward ity providers. The Czech Republic could investors and that the contributions are improve its preconstruction information In the medium term the issue of under- set at the minimum required to ensure database by linking UtilityReport to the staffing could be addressed by giving the functionality of the area’s public infra- online registry for land identification, certified private sector professionals a structure. Serbia, for example, abolished addresses and property (RUIAN) and greater role in the permitting process. similar fees in 2014 for some buildings, by adding comprehensive infrastructure While this might require legislative driven by the need to accelerate con- information and zoning maps in col- action, the benefit of having a highly struction investments.27 laboration with the utility providers and specialized workforce that is flexible to municipal building offices. The Danish changes in demand might be substantial, Croatia could also consider distributing municipality of Copenhagen provides an especially since weather conditions the infrastructure development costs example. Its online zoning map covers the mean that construction is a highly sea- over a wider base of existing and potential entire city and provides multiple layers sonal activity in both countries. Australia, investors, rather than levying them solely of information, including the city master Singapore and the United Kingdom are on the owner of the proposed building plan, detailed local plans and information among the countries that have adopted site. In New Zealand, for example, the on the coverage of different infrastructure a system of third-party contractors to utility contribution fees are calculated networks.22 expand regulatory coverage and exper- as a “fair, equitable, and proportionate tise.24 In general, research shows that portion of the total cost of capital expen- Enhance the quality of construction permitting is more efficient diture necessary to service growth over regulatory expertise in in economies that rely on some form of the long term”—a calculation based on collaboration with the private private sector participation in construc- a set of technical criteria that take into sector tion permitting or control processes.25 But account the parameters of the construc- CZECH REPUBLIC, SLOVAKIA such a system needs to be accompanied tion project.28 Construction permitting is a complex by adequate safeguards, such as more process involving multiple stakehold- robust qualification requirements for pro- ers. Managing this process requires fessionals who approve building plans. DEALING WITH CONSTRUCTION PERMITS 43 Streamline the process for objective benchmark for identifying and obtaining the occupancy permit NOTES addressing cases that have been delayed CZECH REPUBLIC in the system. It would also allow appli- 1. The European Construction Sector: A Global Before registering a new building, entre- cants to track the status of their submis- Partner, European Commission, Internal preneurs in the Czech Republic have to sions online, enabling them to make more Market, Industry, Entrepreneurship and SMEs Directorate General, Energy Directorate obtain an evidence number for it, a track- informed decisions (including about pos- General and Joint Research Centre (2016), ing number for use in official records. sible remedial actions) in response to the https:/ /ec.europa.eu/growth/content While the legislation clearly indicates project timeline. Data from such a track- /european-construction-sector-global -partner-0_en. that obtaining this number is the respon- ing system could also be used by third- 2. Annual data on production in construction sibility of the building office, in practice party watchdogs, such as the association from the Eurostat database, accessed this step is typically completed by the of architects or local business chambers, February 10, 2018, http:/ /ec.europa.eu /eurostat/statistics-explained/index investor and takes around three weeks.29 to protect the interests of investors and .php?title=File:EU-28_Construction,_annual boost the competitiveness of the local _rate_of_change_2005_-_2017,_calendar This extra step could be carried out public administration. _adjusted_data.png. Percentage change in each year calculated through comparison with through an interagency process, without the same period in the previous year. the participation of the investor. The In addition, Portugal could improve 3. Doing Business database. agencies verifying that the new building the compliance of the permit-issuing 4. In Portugal, in addition to municipal administrations, there are regional conforms with the approved plans and authorities with the official time limits administrations for the Autonomous Regions the authority issuing the evidence num- by adopting tacit approval (silence-is- of Azores and Madeira. ber are all within the municipality. Better consent) rules. Portugal had such rules 5. A location permit (or zoning permit) is a planning permission that grants the right to communication channels and clearer in its previous construction permitting use a land plot for a specific development implementation protocols could therefore regulation, which was repealed in 1999 project in accordance with the land use eliminate the need for this procedure. The by the current regulation.30 The new regulations. But it does not authorize construction. Czech Republic could look to the example regulation states that if the public bodies 6. Official Gazette of the City of Varazdin 23, no. 1 of Slovakia, where the evidence number responsible for approving construction (February 25, 2016), http:/ /www.glasila.hr is granted to the investor together with projects fail to issue their decisions /svgv. 7. “Uredbu o izmjeni uredbe o visini vodnoga the occupancy permit. within the legally prescribed time limits, doprinosa” [Regulation on a change of entrepreneurs have the right to appeal the regulation on the water contribution Introduce application tracking to an administrative court.31 But a court participation], Narodne Novine, July 23, 2015, https:/ /narodne-novine.nn.hr/clanci systems and silence-is-consent appeal is a long and costly process and is /sluzbeni/2015_07_83_1588.html. rules to increase accountability therefore rarely used in practice. Portugal 8. According to Decree-Law 555/99, articles 5.1, at the permit-issuing authorities could consider reintroducing the auto- 5.2 and 5.3, the building permit, authorization or advance notice (pedido de infomação prévia) PORTUGAL matic tacit approval clauses in the con- is the responsibility of the mayor of the city In all eight cities benchmarked in struction permitting process. To ensure and may be delegated to councilors, with the Portugal, obtaining the approval of build- realistic timelines for project approvals, option of subdelegation, or to the directors of municipal services. ing plans from the municipality takes this step should be taken in consultation 9. Regulamento Municipal de Urbanização longer than the legally mandated 30 with a wide range of stakeholders. e Edificação (Taxas e Compensações days—and entrepreneurs lack an effec- Urbanísticas de Coimbra) (381/2017). Available at https:/ /dre.pt/application tive mechanism for appealing unjustified /conteudo/107720445. delays. As a simple step toward greater 10. Data for 2007–16 on building permits by transparency and accountability in geographic location from Statistics Portugal, accessed February 17, 2018, https:/ /www.ine construction permitting, municipalities .pt/xportal/xmain?xpid=INE&xpgid=ine_indic could introduce an online application adores&indOcorrCod=0000086&contexto=b tracking system. This system could be d&selTab=tab2. 11. Data from Eurostat database (2011 census incorporated in the municipality website, data), accessed February 17, 2018, avoiding the need for a fully functional https://ec.europa.eu/CensusHub2/intermediate electronic permitting platform. .do?&method=forwardResult. 12. European Commission, eGovernment Benchmark 2016: A Turning Point for The system could initially be used for eGovernment Development in Europe? recording the date of submission of appli- (Luxembourg: Publications Office of the European Union, 2016). cation materials and generating simple 13. World Bank, Doing Business in the European status reports on the review process. Union 2017: Bulgaria, Hungary and Romania This would give the issuing authority an (Washington, DC: World Bank, 2017). 44 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA 14. Data for 2016 on construction works 31. Decree-Law 555/99 of December 16, 1999, completed from Statistics Portugal, accessed as amended by Decree-Law 26/2010 of February 17, 2018, https:/ /www.ine.pt/xportal March 30, 2010, articles 111 (Silêncio da /xmain?xpid=INE&xpgid=ine_indicadores&i Administração) and 112 (Intimação judicial ndOcorrCod=0000086&contexto=bd&selT para a prática de ato legalmente devido). ab=tab2. 15. New York City Business Portal, https:/ /www1.nyc.gov/nycbusiness /description/construction-permits. 16. Porto, Direção Municipal do Urbanismo, Departamento Municipal de Gestão Urbanística, “Manual de recomendações e boas práticas: elaboração de projetos,” https:/ /balcaovirtual.cm-porto.pt/Conteudo /Documents/Manual%20 Recomendações%20e%20Boas%20Práticas _urbanismo.pdf. 17. “Simuladores de taxas,” Faro (Portugal) municipality website, http:/ /www.cm-faro.pt /pt/menu/894/simuladores-de-taxas.aspx. 18. World Bank, Doing Business 2016: Measuring Regulatory Quality and Efficiency (Washington, DC: World Bank, 2015). 19. Except those listed in article L243-1-1 of the Insurance Code. 20. Republic of Serbia, Amendment to the Law on Planning and Construction from December 2015, Official Gazette 145/2015. 21. World Bank, Doing Business 2016: Measuring Regulatory Quality and Efficiency (Washington, DC: World Bank, 2015). 22. Copenhagen (Denmark) municipality website, https:/ /www.bygogmiljoe.dk/. 23. Doing Business database. 24. Doing Business database; Thomas Moullier, Building Regulatory Capacity Assessment: Level 2—Detailed Exploration (Washington, DC: World Bank, 2017). 25. Doing Business database. 26. Gregory S. Burge, “The Effects of Development Impact Fees on Local Fiscal Conditions,” in Municipal Revenues and Land Policies, edited by Gregory K. Ingram and Yu-Hung Hong (Cambridge, MA: Lincoln Institute of Land Policy, 2010). 27. The Law on Property Tax of July 3, 2014, eliminated the fees for using construction land. 28. Auckland (New Zealand) Council, “Development Contributions Policy 2015,” https:/ /www.aucklandcouncil.govt.nz /plans-projects-policies-reports-bylaws/our -policies/docsdevelopmentcontributionspolicy /contributions-policy.pdf. 29. Law-Act 128/2000, paragraph 31a, states that for a new construction that requires a construction permit, the building office issues a written request to the municipality for an evidence number. Law-Act 183/2006, paragraph 121, sections 2 and 41b, states that if the construction is new, the building office requests that an evidence number be issued for the new building. 30. Decree-Law 448/91 of November 29, 1991, article 67, was replaced by Decree-Law 555/99 of December 16, 1999, as amended by Decree-Law 26/2010 of March 30, 2010, articles 111 (Silêncio da Administração) and 112 (Intimação judicial para a prática de ato legalmente devido). Getting Electricity MAIN FINDINGS ƒƒ Among the cities benchmarked in Croatia, getting electricity is easiest in Varazdin and most difficult in Zagreb. Varazdin has the most reliable electricity supply as well as the most advanced use of information technology in the utility’s local office. ƒƒ Of the four countries, the Czech Republic has the greatest subnational variation in performance. Getting electricity is easier in the largest cities, where low- voltage connections are commonly available (Prague and Brno). It is most difficult in smaller centers, where warehouses typically get medium-voltage connections (as in Liberec and Olomouc). ƒƒ Among the Portuguese cities, getting electricity is easiest in Coimbra and most difficult in Faro. In Coimbra a georeferencing system has eliminated the need for a site visit to determine the cost of the connection. ƒƒ In Slovakia getting electricity takes 56 days and four procedures in Zilina, while it takes a month longer and five procedures in Bratislava and Trnava. The utility in Zilina eliminated the need to get a project approval by providing more detailed technical conditions at the outset. ƒƒ By adopting all the good practices already in place among their cities, Croatia, Portugal and Slovakia could each improve their global ranking on the ease of getting electricity by more than 40 places. In the Czech Republic cities outside the capital could learn from Prague, which ranks first among the 25 cities benchmarked by this study. 46 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA E lectricity is an important element responsible for control and security. Doing Czech Republic and Slovakia multiple in the competitiveness of an Business looks at how these entities and utilities operate in the national territory, economy. Research shows that regulatory aspects affect companies with each one serving a designated geo- capital (domestic and foreign) tends to be seeking to obtain a new connection, with graphic area. In Portugal one distribution attracted to countries that offer a reliable the aim of helping to identify bottlenecks utility operates in the continental part of and competitively priced supply of elec- in the connection process so that govern- the country, while a different utility serves tricity.1 And it shows that faster, simpler ments and regulators can make getting each autonomous island region. In Croatia and less costly connection processes are electricity easier for entrepreneurs. In only one distribution utility operates. associated with better firm performance, addition, Doing Business captures quanti- especially in industries with high electric- tative data on the reliability of supply as The procedural steps, the time and the ity consumption.2 Conversely, high elec- well as qualitative information on how cost for getting an electricity connection tricity prices, frequent power outages and utilities and regulators handle power out- depend on the availability of both low- difficult connection processes constrain ages and how tariffs and tariff changes and medium-voltage infrastructure as firms’ operations and affect entrepre- are communicated to customers. well as the most likely connection type neurs’ decisions on whether to establish for warehouses in the area. In all the cit- a business and how to operate it. ies benchmarked in Croatia and Portugal, HOW DOES GETTING for a warehouse like the one in the Doing The process for obtaining an electricity ELECTRICITY WORK IN THE Business case study, entrepreneurs are connection is subject to different regula- FOUR MEMBER STATES? more likely to opt for a low-voltage tions that seek to ensure service quality, connection. In the Czech Republic and general security and technical standards. In all four countries covered by this study, Slovakia the type of connection depends To get a new connection, entrepreneurs the process for obtaining an electricity con- on the location: in some cities it is more must interact mainly with the distribution nection is regulated largely at the national common to connect to the low-voltage utility. Other entities are also involved, level and monitored by a national regula- network, in others to the medium- such as municipalities, regulatory author- tory agency.3 Distribution utilities are key voltage network.4 In the cities where ities, electrical contractors and entities players in the connection process. In the it is more common to connect to the WHAT DOES GETTING ELECTRICITY MEASURE? Doing Business records all procedures required for a business to obtain a perma- Getting electricity: measuring efficiency, nent electricity connection and supply for a standardized warehouse. These pro- reliability and transparency cedures include applications and contracts with electricity utilities, all necessary Rankings are based on distance to inspections and clearances from the distribution utility and other agencies, and frontier scores for four indicators the external and final connection works. To make the data comparable across Days to obtain Cost to obtain a locations, several assumptions about the warehouse and the electricity connec- an electricity connection, as % of connection income per capita tion are used. The location of the warehouse is assumed to be within city limits, the subscribed capacity of the connection 140 kilovolt-amperes (kVA), and the length of the connection 150 meters. 25% 25% Time Cost Doing Business also measures how reliable the supply of energy is and how trans- 25% 25% parent the consumption tariffs are. Its reliability of supply and transparency of tar- Procedures Reliability of supply and iffs index encompasses quantitative data on the duration and frequency of power transparency of tariffs outages as well as qualitative information on several aspects: the mechanisms put in place by the utility for monitoring power outages and restoring power sup- Steps to file a connection Power outages ply, the reporting relationship between the utility and the regulator for power out- application, prepare and regulatory a design, complete mechanisms in ages, the transparency and accessibility of tariffs and whether the utility faces a works, obtain approvals, place to monitor go through inspections, and reduce them; financial deterrent aimed at limiting outages. The index accounts for one-fourth of install a meter and transparency of the distance to frontier score for getting electricity (see figure). In addition, Doing sign a supply tariffs contract Business records the price of electricity in each location covered.a a. While Doing Business records the price of electricity, it does not include these data when calculating the distance to frontier score or the ranking on the ease of getting electricity. GETTING ELECTRICITY 47 medium-voltage network, entrepreneurs half months on average, although the time processes suggest that all four countries need to go through additional steps (such varies substantially among the bench- have room for improvement. According as installing a private substation), wait marked cities. Portugal is the only one of to Doing Business 2018, getting electricity longer and pay higher connection fees. the four countries where getting electricity takes 23 days in Vienna (Austria), less costs less than the EU average: 36.5% of than half the time it takes in Funchal How do results compare with other income per capita on average, as com- (Portugal), which has the fastest process EU member states and globally? pared with 118.7% of income per capita for among the 25 benchmarked cities. And Getting electricity takes around two the EU. In Croatia the average cost is equal while the connection process costs only months on average in Croatia (65.6 days) to 249.3% of income per capita; at that 6% of income per capita in France, it and Portugal (61.1 days) and two and a half same cost, an entrepreneur in Portugal costs about four times as much relative months in Slovakia—less time in all three could connect seven warehouses. to income per capita in Brno and Prague countries than the average for EU mem- (Czech Republic), which have the least ber states of three months. In the Czech Data for the EU member states with costly processes among the 25 cities Republic the same process takes five and a the fastest and least costly connection (table 4.1). TABLE 4.1  Getting electricity in Croatia, the Czech Republic, Portugal and Slovakia—where is it easier and where is power supply more reliable? Reliability of supply Distance to Cost and transparency of frontier score Procedures Time (% of income tariffs index City (Country) Rank (0–100) (number) (days) per capita) (0–8) Prague (Czech Republic) 1 95.35 3 60 25.9 8 Brno (Czech Republic) 2 89.92 3 110 25.9 8 Zilina (Slovakia) 3 88.41 4 56 55.2 7 Coimbra (Portugal) 4 87.49 4 65 36.1 7 Lisbon (Portugal) 5 86.45 5 65 36.1 8 Presov (Slovakia) 6 86.27 5 66 57.0 8 Kosice (Slovakia) 7 85.29 5 75 57.2 8 Ponta Delgada (Portugal) 8 85.12 4 58 38.6 6 Funchal (Portugal) 9 84.96 5 50 34.2 7 Varazdin (Croatia) 10 84.29 4 60 237.1 6 Evora (Portugal) 11 84.19 5 57 36.1 7 Bratislava (Slovakia)a 12 83.19 5 89 244.5 8 Rijeka (Croatia) 13 82.87 4 73 237.1 6 Porto (Portugal) 14 82.71 6 61 36.2 8 Split (Croatia) 15 82.66 4 75 237.1 6 Braga (Portugal) 16 82.27 6 65 38.8 8 Osijek (Croatia) 17 81.70 4 55 237.1 5 Zagreb (Croatia) 18 80.43 4 65 298.5 5 Trnava (Slovakia)a 19 80.07 5 89 244.5 7 Faro (Portugal) 20 78.83 6 68 36.1 7 Ostrava (Czech Republic)a 21 69.89 6 172 283.2 8 Plzen (Czech Republic)a 22 69.67 6 174 282.8 8 Usti nad Labem (Czech Republic)a 23 67.70 5 233 193.0 8 Olomouc (Czech Republic) a 24 67.09 6 169 282.5 7 Liberec (Czech Republic)a 25 66.32 5 217 193.0 7 Source: Doing Business database. Note: Rankings are based on the average distance to frontier score for the procedures, time and cost associated with getting electricity as well as for the reliability of supply and transparency of tariffs index. The distance to frontier score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia.” The data for Bratislava, Lisbon, Prague and Zagreb have been revised since the publication of Doing Business 2018. The complete data set can be found on the Doing Business website at http://www.doingbusiness.org. a. In these cities, for a warehouse like the one in the Doing Business case study, a medium-voltage connection is more likely. In the other cities a low-voltage connection is more likely. 48 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Brno and Prague also record the lowest best performers in the EU and globally, grid company, HEP, is the only utility number of procedures among the 25 cit- with average scores very close to the 8 operating.5 In all five benchmarked cities ies (three), matching the lowest among possible points (7.7, 7.6 and 7.3). The a warehouse like the one in the Doing EU member states—in Germany, Sweden Croatian cities have scope for improve- Business case study is most commonly and the United Kingdom. Three Czech ment: on average they score 5.6 points, a connected to the low-voltage network, cities (Olomouc, Ostrava and Plzen) and performance that would rank them at the through the same procedural steps three Portuguese cities (Braga, Faro and bottom among EU member states (table (figure 4.2). The entrepreneur starts the Porto) require twice as many procedures 4.2). process by submitting a request for a new (six), exceeding the EU average (five) connection to HEP, which responds with (figure 4.1). How does the process vary an estimate of the connection fee and a within Croatia? connection contract. Once the entrepre- On the reliability of supply and transpar- In Croatia the rules and regulations neur pays at least 50% of the connection ency of tariffs index, the Czech Republic, relating to electricity connections are fee, the external works can start. The Slovakia and Portugal are among the standardized, and the national electric connection works are carried out entirely FIGURE 4.1  Among the 25 benchmarked cities, the connection process is most streamlined and least costly in Prague and Brno— and fastest in Funchal Reliability of supply and Time (days) transparency index (0–8) 240 8 Usti nad Labem Germany (EU best),a 5 Czech cities, Braga, Lisbon, Porto, 220 Bratislava, Kosice, Presov Liberec EU average 200 7 180 Plzen 4 Portuguese cities, Liberec, Ostrava Olomouc, Trnava, Zilina Olomouc 160 140 6 Ponta Delgada, Rijeka, 120 Split, Varazdin Brno 100 EU average Bratislava, Trnava 80 Split Kosice 5 Rijeka Faro Coimbra Presov Osijek, Zagreb Zagreb Lisbon Braga 60 Prague Varazdin Ponta Delgada Evora Porto Osijek Zilina Funchal 40 Germany (EU best) 20 4 2 3 4 5 6 7 Procedures (number) Cost (% of income per capita) 25.9 Croatian city 100.0 Czech city 150.0 Portuguese city 200.0 250.0 Slovak city 298.5 Source: Doing Business database. Note: The averages for the EU are based on economy-level data for the 28 EU member states. For practical reasons the figure groups cities with identical scores on the reliability of supply and transparency of tariffs index in some cases. See table 4.1 for more precise data on the indicators. a. Fifteen other EU member states also have a score of 8 on the reliability of supply and transparency of tariffs index: Belgium, Cyprus, the Czech Republic (as represented by Prague), Estonia, Finland, France, Ireland, Lithuania, the Netherlands, Portugal (as represented by Lisbon), Slovakia (as represented by Bratislava), Slovenia, Spain, Sweden and the United Kingdom. GETTING ELECTRICITY 49 TABLE 4.2  The electricity supply in Croatian cities is among the least reliable in the EU Croatia Czech Republic Portugal Slovakia Ponta Osijek Varazdin Liberec Prague Delgada Porto Zilina Presov Reliability of supply and transparency of tariffs index (0–8) 5 6 7 8 6 8 7 8 Total duration and frequency of outages per customer a year (0–3) 1 2 2 3 2 3 2 3 System average interruption duration index (SAIDI) 5.5 1.9 1.4 0.5 1.5 0.6 3.1 0.2 System average interruption frequency index (SAIFI) 3.6 1.1 1.6 0.3 1.2 0.5 1.8 0.1 Mechanisms for monitoring outages (0–1) 1 1 1 1 1 1 1 1 Does the distribution utility use automated tools to monitor outages? Yes Yes Yes Yes Yes Yes Yes Yes Mechanisms for restoring service (0–1) 1 1 1 1 0 1 1 1 Does the distribution utility use automated tools to restore service? Yes Yes Yes Yes No Yes Yes Yes Regulatory monitoring (0–1) 1 1 1 1 1 1 1 1 Does a regulator—that is, an entity separate from the utility— Yes Yes Yes Yes Yes Yes Yes Yes monitor the utility’s performance on reliability of supply? Financial deterrents aimed at limiting outages (0–1) 0 0 1 1 1 1 1 1 Does the utility either pay compensation to customers or face fines No No Yes Yes Yes Yes Yes Yes by the regulator (or both) if outages exceed a certain cap? Communication of tariffs and tariff changes (0–1) 1 1 1 1 1 1 1 1 Are effective tariffs available online? Yes Yes Yes Yes Yes Yes Yes Yes Are customers notified of a change in tariff ahead of the billing cycle? Yes Yes Yes Yes Yes Yes Yes Yes Source: Doing Business database. Note: For each country the table shows the results for the cities obtaining the lowest and highest scores on the reliability of supply and transparency of tariffs index. Where two or more cities in a country obtain the same score, the worst- and best-performing cities were selected on the basis of the sum of their scores on the duration and frequency of power outages as measured by SAIDI and SAIFI. If both the SAIDI and SAIFI values are between 0 and 1, 3 points are assigned; if both are between 1 and 4, 2 points are assigned; if both are between 4 and 12, 1 point is assigned. The data in the table are for 2016. by HEP. To obtain the final connection The time required to obtain an electricity and duration of outages. The network is approval, the customer needs to submit connection ranges from 55 days in Osijek relatively reliable in Varazdin, where in an internal wiring certificate to HEP. to 75 days in Split. The difference is driven 2016 customers experienced on average mainly by how long an applicant must 1.1 service interruptions, lasting a total of Overall among the five Croatian cities, wait to receive the connection contract: 2 hours. In Osijek, by contrast, custom- getting electricity is easiest in Varazdin the wait ranges from 15 days (as in Osijek) ers experienced on average 3.6 outages, and most difficult in Zagreb. Varazdin has to twice that long (as in Split). Among the lasting more than 5.5 hours in total. In the most reliable supply of electricity and five Croatian cities, getting electricity is Zagreb, while outages were less frequent the second fastest process for obtain- most expensive in Zagreb, where it costs ing a new connection. The utility’s local HRK 238,184 (EUR 32,021), or 298.5% of office in Varazdin is the most advanced in income per capita. In the other four cities FIGURE 4.2  Getting electricity involves using information technology to organize the cost is HRK 189,184 (EUR 25,434), or the same four steps across cities in Croatia back-office work, thanks to the adop- 237.1% of income per capita. The reason Procedure Agency tion of electronic document archives, for the difference in cost between Zagreb Submit application and receive Distribution utility an electronic database and software to and the other four is the connection fee, connection contract track applications for new connections. which is regulated at the national level In the global Doing Business ranking of and is higher in the capital.6 Await completion of external works Distribution utility 190 economies on the ease of getting electricity, where Croatia (as represented Although all five cities can count on Submit internal wiring certificate Distribution utility by Zagreb) stands at 75, Varazdin would automated systems to monitor power to utility and request final connection rank number 33, ahead of Lithuania outages and restore service, and the Receive visit by utility to open Distribution utility (Vilnius), Ireland (Dublin), Estonia energy regulator monitors the utility’s the meter (Tallinn) and Spain (Madrid) and very performance, there are substantial differ- close to Luxembourg. ences among the cities in the frequency Source: Doing Business database. 50 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA than in Osijek, the total duration of ser- network.9 This makes a substantial differ- FIGURE 4.3  Getting electricity takes vice interruptions was similar: customers ence: in Brno and Prague the connection three procedures in Brno and Prague— experienced on average 1.7 outages, can be completed in three procedures but twice as many in Olomouc, Ostrava totaling 5 hours. This, along with the lack (figure 4.3). Obtaining a low-voltage and Plzen of regulatory requirements for the utility connection takes as little as 60 days (in Procedure Agency to compensate customers or pay penal- Prague) and costs CZK 109,000 (EUR Submit application and receive Distribution utility ties when outages exceed a certain cap, 4,296), or 25.9% of income per capita connection agreement would rank Osijek and Zagreb at the (in both Brno and Prague). bottom among EU member states on the Await completion of Distribution utility external works reliability of supply and transparency of For both low- and medium-voltage tariffs index, with 5 of 8 possible points. connections the process starts with sub- Await approval of project designa Distribution utility mitting an application to the local distri- Croatian authorities have an opportu- bution utility. The customer then receives Obtain excavation permit Municipal road nity to make getting electricity easier by the technical conditions for connecting as for connection worksa management office adopting good practices already in place well as the connection agreement. At this in the country. A city where the process point the utility and the customer agree Build external connection and Private electrical contractor install private substationa,b is as fast as in Osijek, and the supply as on the best option for connecting on the reliable as in Varazdin, would stand at 30 basis of the technical conditions, and the Sign supply contract and Electricity supplier; await meter installation distribution utility in the global Doing Business ranking of 190 customer pays the connection fee.10 For economies, more than 40 places higher a low-voltage connection the distribution Procedure present in all cities than the current ranking of Croatia (as utility is usually responsible for the exter- Procedure required for medium-voltage connection only represented by Zagreb). nal connection. But to speed up the pro- Procedure required in Olomouc, Ostrava and Plzen only cess, entrepreneurs in Brno and Prague How does the process vary can prepare the project design and obtain Source: Doing Business database. within the Czech Republic? the necessary permits on behalf of the a. Procedure takes place simultaneously with the Overall, getting electricity in the Czech utility.11 They then hand the design and previous one. b. The entrepreneur is responsible for building the Republic is easier in the country’s largest permits on to the utility for the building of external connection in Olomouc, Ostrava and Plzen only. cities, Prague and Brno, and most difficult the external connection. in smaller centers such as Liberec and electricity supplier submits a request to Olomouc. Three distribution utilities oper- For a medium-voltage connection there the utility to install a meter—and once ate in the seven benchmarked cities in the are two possible approaches for complet- the meter is installed, electricity can start Czech Republic: PREdistribuce in Prague; ing the external works. In Liberec and Usti flowing. E.ON in Brno; and CEZ in Liberec, Olomouc, nad Labem the utility typically builds the Ostrava, Plzen and Usti nad Labem.7 connection from the grid up to a connec- The amount of time the connection tion point on the property boundary. In process takes also differs among cities In most of the Czech cities new ware- Olomouc, Ostrava and Plzen the utility where warehouses typically connect to houses typically connect to the medium- often prepares the connection point on a the same voltage. The process is sub- voltage network. This can take up to six pole near the grid, and the entrepreneur stantially faster in Prague than in Brno: it procedures (as in Olomouc, Ostrava is responsible for building the connection takes 60 days in the capital but 110 days and Plzen) and 233 days (as in Usti nad from that pole to the property. In both in Brno. The delay in Brno is due mainly Labem), and the cost can be as high as cases the entrepreneur needs to obtain to E.ON’s longer subcontracting process. CZK 1,191,600 (EUR 46,969), or 283.2% an approval on the project design from of income per capita (as in Ostrava). the utility and to install a private substa- In the Czech cities where warehouses These numbers are well over the EU tion, two steps not required in Brno and typically get a medium-voltage connec- averages of five procedures, 96.3 days Prague.12 In Olomouc, Ostrava and Plzen, tion, the process of obtaining permits from and 118.7% of income per capita. So it because customers are responsible for local authorities is the most important is no surprise that 47.9% of Czech firms the external connection, they also need source of delay. The utility or its subcon- identify electricity as a major constraint to obtain an excavation permit from the tractor has to obtain all the necessary to doing business.8 municipality to cross the road.13 As the permits—such as the excavation permit last step, once the connection works are to cross the road, the building permit for Among the seven cities, Brno and Prague completed, in all the Czech cities the placing the connection and the right to use are the only ones where a warehouse is entrepreneur signs a supply contract city land—before starting the construction more likely to connect to the low-voltage with the chosen electricity supplier. The of the connection. This process takes the GETTING ELECTRICITY 51 longest in Liberec and Usti nad Labem it among the EU and global best. This FIGURE 4.4  Getting electricity in the (200 days). These steps alone make demonstrates how bigger cities facing a Portuguese cities requires a minimum of medium-voltage connections in the Czech larger number of requests can perform four procedures and a maximum of six Republic among the most time consuming well if they take advantage of economies Procedure Agency in the EU. Overall among the Czech cities of scale. Czech authorities could consider Submit application for new Distribution utility where a medium-voltage connection is helping the other cities to catch up with connection and await estimate likely, Ostrava has the fastest connec- the capital by making it easier to obtain tion process, but that process still takes municipal permits, including location and Receive site visit for Distribution utility preparation of cost estimatea nearly six months. Globally among the 190 building permits and the right to use city economies covered by Doing Business, only land. Obtain excavation permit Municipal road four have a longer wait time.14 for connection works management office How does the process vary Await completion of external Distribution utility or private The connection fees are regulated nation- within Portugal? works electrical contractor ally.15 The fee for a low-voltage connec- In Portugal the power sector is supervised tion is CZK 100,000 (EUR 3,942).16 The at the national level by the Energy Services Obtain internal wiring certificatea Certifying entity fee for a medium-voltage connection Regulatory Authority (ERSE), while ener- is slightly higher, at CZK 112,000 (EUR gy policy is designed by the Directorate Sign supply contract and Electricity supplier; 4,415). The largest share of the cost for General for Energy and Geology (DGEG). await meter installation distribution utility an entrepreneur connecting to medium Specialized agencies oversee energy- Procedure present in all cities voltage relates to the private substation, related matters in the country’s two Procedure present in certain cities only which adds an average CZK 700,000 autonomous island regions: the Regional (EUR 27,592). Among the Czech cities, Energy Directorate (DREn) in the Azores Source: Doing Business database. Ostrava, Olomouc and Plzen have the and the Regional Directorate for the a. Procedure takes place simultaneously with the most costly connection processes— Economy and Transports (DRET) in the previous one. because in these cities, in addition to archipelago of Madeira.18 In the continen- purchasing and installing the substation, tal part of the country new connections do so. Before the works start, an excava- customers are also responsible for build- to the grid must be obtained through the tion permit needs to be obtained from ing the largest part of the connection, distribution utility Energias de Portugal the municipality. When the utility carries which adds about CZK 375,000 (EUR (EDP-Distribuição). Customers can then out the works—as it commonly does in 14,781) to the total cost.17 Among EU choose from multiple electricity suppli- Coimbra, Lisbon and Ponta Delgada—it member states, only Croatia, Bulgaria ers. In each of the autonomous island also deals with the municipal permits. and Romania have a higher cost for get- regions only one company is in charge of In Evora, while entrepreneurs are more ting electricity. power distribution: in Madeira, Empresa likely to hire a private contractor to carry de Electricidade da Madeira (EEM), out the works, the utility still obtains the Brno, Ostrava, Plzen, Prague and Usti nad responsible for providing both new excavation permit on their behalf. Once Labem earn the highest possible score on connections and permanent supply to the works are completed and the internal the reliability of supply and transparency customers in Funchal; and in the Azores, wiring is certified, the customer can sign of tariffs index (8 of 8 points). All distri- Electricidade dos Açores (EDA), with the the supply contract and get the electricity bution utilities must report their perfor- same responsibilities in Ponta Delgada. turned on. mance to the energy regulatory agency, and they face financial deterrents aimed In all eight of the Portuguese cities Overall among the Portuguese cities, at limiting outages. Utilities throughout benchmarked, a warehouse like the one getting electricity is easiest in Coimbra the country use an automated system in the Doing Business case study is most and most difficult in Faro. The process to monitor outages and restore service. commonly connected to the low-voltage is most streamlined in Coimbra and And tariffs and tariff changes are trans- network. The process involves four to Ponta Delgada, where customers need parent and available online. Liberec and six procedures (figure 4.4). The first is to complete four procedures. In Coimbra, Olomouc earn slightly lower scores (7 of applying for a connection and waiting through a pilot project, EDP-Distribuição 8 points) as a result of longer and more for the utility to estimate the connec- has implemented a georeferencing sys- frequent outages. tion fee. In most of the cities the utility tem allowing it to prepare a cost estimate will schedule a site visit to estimate the for customers without visiting the site. Overall among the seven Czech cit- cost. The customer is then free to choose In Ponta Delgada there’s no requirement ies, Prague has the easiest process for between asking the utility to carry out the for customers to obtain a certification getting electricity, with results ranking works and hiring a private contractor to of the building’s internal wiring; instead, 52 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA they can present terms of responsibility where customers obtain the permit, they solution adopted for a connection often signed by their technician. The connec- must pay EUR 468 for it. results from an agreement between the tion process requires six procedures in customer and the utility based on the Braga, Faro and Porto, where customers Over the course of 2016 the most reliable specific technical conditions of the case. usually hire their own contractor for the electricity supply was recorded in Funchal, works and must obtain an excavation where customers experienced on average Some of the steps to get a new electric- permit themselves. And it takes five 0.28 power outages, lasting a total of 23 ity connection are common to all cities procedures in Evora, Funchal and Lisbon. minutes. Outages were most frequent in across Slovakia. But some steps differ, Faro, where customers saw an average reflecting differences in the internal pro- The process is fastest in Funchal, where of 1.83 power cuts, lasting 1.6 hours in cesses of distribution utilities and in the it takes 50 days. The main reason for the total. The country has a legal framework availability of capacity for connecting speedier performance in Funchal is that in place to provide incentives for reliable new buildings (figure 4.5). In Bratislava it takes less time for the utility to review electricity supply. All distribution utilities and Trnava a warehouse like the one in an application (13 days) and to obtain the must report their performance to ERSE, the Doing Business case study is most excavation permit from the municipality and customers may receive financial likely to connect to the medium-voltage (15 days). Another reason is that custom- compensation if outages exceed certain network. In these two cities the external ers in Funchal are required only to notify limits. Distribution utilities throughout connection is typically built by the utility, DRET, the regional energy agency, of the the country use an automated system which also obtains the excavation permit completion of the internal wiring—a step to monitor outages. Those operating in from the municipal road management that takes five days. By contrast, custom- the benchmarked cities in continental office on behalf of the customer. The ers in continental Portugal must obtain Portugal also use an automated system customer is responsible for purchasing an internal wiring inspection from a to restore service, while those in Funchal and installing a private substation. specialized third-party firm, which takes and Ponta Delgada do not. In all the cities two weeks on average. Among all eight tariffs and tariff changes are transparent In Kosice, Presov and Zilina, by contrast, cities, Faro has the longest process for and available online. the warehouse is likely to connect to the getting connected to electricity, taking low-voltage network, so the installation a total of 68 days. Completing two of Portugal has enormous potential to make of a private substation is not needed. In the procedures takes longer in this city it easier for entrepreneurs to obtain these three cities entrepreneurs most than in the others: getting an application an electricity connection by encourag- reviewed takes 23 days, and obtaining ing cities to share good practices and FIGURE 4.5  The steps to get electricity an excavation permit takes almost three learn from one another. A hypothetical in Slovakia vary depending on the utility weeks. economy that has a process requiring and the availability of capacity four procedures (as in Coimbra and Ponta Among the eight cities, Funchal has the Delgada), taking 50 days (as in Funchal) Procedure Agency least expensive connection process, and costing 28.5% of income per capita Submit application and Distribution utility await technical conditions at EUR 5,995, or 34.2% of income (as in Ponta Delgada)—and that scores for connection per capita; among EU member states, 8 points on the reliability of supply and Await approval of project Distribution utility only seven have a lower cost relative to transparency of tariffs index (as Braga, design income per capita.19 Braga has the most Lisbon and Porto do)—would place very Obtain excavation permit Municipal road expensive process, costing EUR 6,803, close to the global top 10 in the Doing for connection works management office or 38.8% of income per capita. In all the Business ranking on the ease of getting cities the biggest source of cost is the electricity. Await completion of external Distribution utility or private works electrical contractor connection works. If these are carried out by the utility, the cost is regulated at How does the process vary Install private substationa Private electrical contractor the national level. Utilities charge a sum within Slovakia? ranging from EUR 5,862 in Funchal to Three distribution utilities operate in Sign supply contract and Electricity supplier; EUR 6,772 in Ponta Delgada. Differences Slovakia. Bratislava and Trnava are in await meter installation distribution utility in cost also stem from variations in the the territory where Zapadoslovenska fee for a municipal excavation permit for distribučna (ZSDIS) operates, Kosice Procedure present in all cities the works. Thanks to general agreements and Presov are in the territory served Procedure present in certain cities only between the utility and municipalities, by Vychodoslovenska distribučna Source: Doing Business database. no fee is charged in the cities where the (VSD), and Zilina is in the territory of a. Procedure takes place simultaneously with the utility obtains this permit. But in Braga, Stredoslovenska distribučna (SSD).20 The previous one. GETTING ELECTRICITY 53 commonly opt to build the external territory level; for the Doing Business case building office, the road management connection themselves and therefore study warehouse they amount to EUR office and the office that grants access to need to obtain an excavation permit 1,787 in Zilina and EUR 2,180 in Kosice city land. For an entrepreneur needing to from the municipal road management and Presov. connect to the medium-voltage network, office. The lower technical complexity of the time required to obtain all the permits a low-voltage connection translates into Bratislava, Kosice and Presov earn the becomes a real obstacle. Obtaining the shorter wait times than for a medium- highest possible score on the reliability of right to use city land alone can take sev- voltage connection. Getting electricity supply and transparency of tariffs index eral months as a result of the complexity takes 56 days in Zilina—which has the (8 of 8 points). Trnava and Zilina earn of the process and the meeting schedules best performance on the ease of getting a slightly lower score (7 of 8 points) as of different municipal bodies. electricity among the five Slovak cities— a result of longer and more frequent while it takes a month longer in Bratislava outages. Utilities must report their Streamlining the process for obtaining and Trnava. performance to the energy regulatory permits and consolidating the necessary agency, and the regulation establishes municipal approvals internally could Zilina also has the fewest procedures financial deterrents aimed at limiting out- reduce delays in both the Czech Republic among the Slovak cities, with four. In ages. Utilities use automated systems to and Slovakia—while also simplifying the other cities the process requires five monitor outages and restore service. And matters for entrepreneurs by eliminating procedures. The difference is that in all tariffs and tariff changes are transparent the need to approach multiple offices the cities except Zilina the project design and available online. for the same project. It would also avoid must be approved by the distribution the risk of different municipal officials utility. The utility operating in Zilina, SSD, Cities in Slovakia could make getting issuing contradictory decisions. Lithuania eliminated this requirement. Instead, it electricity easier for enterprises by learn- offers a good example of how the process provides more detailed technical condi- ing from one another. A hypothetical can be streamlined. There, applicants tions for the connection at the beginning economy where the connection process submit only one consolidated form to of the process, ensuring that there is little is as efficient as in Zilina (where it takes the municipality, which then collects the ambiguity for project designers when four procedures, lasts 56 days and costs clearances from different departments on they are preparing the project. SSD also 55.2% of income per capita), and where their behalf. eliminated the requirement to submit supply is as reliable as in Bratislava, a completion report, which the other Kosice and Presov, would stand at 12 in Authorities in the Czech Republic and Slovak utilities require when the con- the Doing Business global ranking of 190 Slovakia could also consider introducing nection works are completed. SSD asks economies on the ease of getting elec- strict statutory time limits for issuing instead for an affidavit through which the tricity—more than 40 places higher than permits as well as silence-is-consent customer confirms that the external con- Slovakia (as represented by Bratislava) rules, as has been done in several other nection has been prepared in accordance currently ranks. EU member states. Under these rules, if with the technical conditions. the approving authority fails to respond within the given time frame, the approval In all five Slovak cities the connection WHAT CAN BE IMPROVED? is automatically granted. Italy, Poland process ends with the customer signing and Spain are among the EU member a supply contract with an electricity sup- This chapter’s review of the process for states that have adopted such rules, as plier. The supplier then asks the utility to getting a new electricity connection and illustrated in earlier Doing Business subna- install the meter, and the customer can the reliability of power supply in Croatia, tional studies.21 switch on the electricity. the Czech Republic, Portugal and Slovakia points to several areas of possible Another permitting issue in the two Whether a connection is to a low- or improvement. countries is that external connection medium-voltage network matters sub- projects for medium-voltage connections stantially for the cost. In Bratislava and Streamline the process for need to go through a process of obtain- Trnava, where a medium-voltage con- obtaining municipal permits ing building permission similar to that nection is likely, customers need to pay CZECH REPUBLIC, SLOVAKIA required for more complex construction a medium-voltage connection fee of EUR In the Czech Republic and Slovakia, in projects. Because electricity connections 7,606 as well as purchase and install a addition to the excavation permit, other are simpler and more standardized than private substation at an average cost of preconnection approvals are also needed. buildings and other structures, authori- EUR 28,000. The low-voltage connection These must be obtained from several ties could consider creating a dedi- fees are established at the distribution different municipal offices, such as the cated approval channel for connection 54 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA projects—so that they don’t end up on municipal authorities have no need to connection is expensive despite low- the same processing pile as factories duplicate efforts.22 voltage connections being commonly or shopping malls. Modern regulations available there. To put things in perspec- establish distinct levels of scrutiny—and Improve the reliability of tive, in Bulgaria obtaining a low-voltage therefore different time frames—for dif- electricity supply connection costs less than half as much ferent levels of complexity. This approach CROATIA as it does in Croatia.24 allows approvals for simple connection Most EU member states impose financial projects to be fast-tracked, freeing public sanctions on distribution utilities if they In other countries utilities and local authorities to focus on more complicated fail to provide a reliable electricity supply authorities cover part of the cost of build- projects. to their customers. Croatia is not among ing a new connection, reducing the up- them. So perhaps it is unsurprising that front cost for entrepreneurs. In France, for Simplify the process for Croatia lags behind all other EU mem- example, municipalities finance part of obtaining an excavation permit ber states in the reliability of supply. the connection cost. This is in accordance CROATIA, CZECH REPUBLIC, Minimizing the number and duration of with the Energy Code (article L342-11), PORTUGAL, SLOVAKIA power outages is critical for the good of which specifies that urban planning com- For an electricity connection, one of the the economy and of society in general. missions are to bear the cost of extension most common permits needed is the Financial sanctions are useful in creat- works for the electricity grid. In Paris excavation permit. This must be obtained ing incentives for distribution utilities the utility charges the customer EUR from the municipality by either the utility to maintain a high reliability of supply 1,840, and the entire process of getting or the entrepreneur. Where the utility is throughout the year and across their an electricity connection for the Doing responsible for this requirement, there entire zone of operations. Croatia could Business case study warehouse costs 6% could be more room to negotiate a faster introduce caps on the frequency and of income per capita. and less costly permitting process with duration of outages that, if exceeded, the municipality. A utility’s public service trigger financial sanctions. In Croatia the national distribution functions mean that it is in a continuous company designs and builds all connec- relationship with the municipality, which But financial sanctions alone are not tions. Giving customers the option of offers opportunities for economies of enough. A distribution utility is only the hiring a private contractor to build the scale. This suggests that customers last link in the supply chain for electricity; connection—as is done in several other should be relieved of the burden of apply- many actors play key parts in generation, EU member states, including the Czech ing for permits—and that utilities and transmission and distribution. Moreover, Republic, Portugal and Slovakia—could municipalities should have general agree- multiple interdependent factors directly help reduce costs, because customers ments on standardized and fast-tracked affect reliability. Evidence suggests that could choose the fastest or least costly interactions. investment levels in electricity genera- option. tion, tariff levels and bill collection rates, One example that goes in this direction the operational efficiency of the utilities, Eliminate the project approval comes from the Portuguese city of Evora, and the overarching regulatory frame- by providing detailed technical where the utility obtains the excavation work are all key factors in determining the requirements up front permit even if the customer chooses to reliability of supply.23 SLOVAKIA hire a private contractor for the works. In all the Slovak cities except Zilina, utili- An agreement between the utility and Reduce the up-front cost of ties require that they approve the project the municipality allows permits to be obtaining a new connection design before construction works can delivered at no cost when the utility is the CROATIA, CZECH REPUBLIC, start, for both low- and medium-voltage applicant. As a result, customers obtain SLOVAKIA connections. Zilina offers a good example the excavation permit at no charge. Compared with EU peers, some of the of how providing clear guidelines up front Municipal authorities and utilities else- benchmarked cities have an expensive can save time for both the utility and the where in the four member states could connection process. These include entrepreneur. There, for simpler connec- design similar arrangements making it the Czech and Slovak cities where the tions like the one in the Doing Business easier to obtain excavation permits. customer must connect to the medium- case study, the local utility, SSD, does not voltage network (Liberec, Olomouc, need to approve the project design. This is Another example comes from Romania, Ostrava, Plzen and Usti nad Labem in thanks to the level of technical detail that where some municipalities issue the the Czech Republic, and Bratislava and SSD provides to entrepreneurs before excavation permit as part of the con- Trnava in Slovakia). They also include all they start preparing the project. Nor does struction permit, so that applicants and five Croatian cities, where getting a new SSD require a completion report once the GETTING ELECTRICITY 55 connection has been completed. Instead, Eliminate the need for an on-site connections are more common in Bratislava and Trnava, and low-voltage connections more it simply requires an affidavit from the inspection to determine the common in Kosice, Presov and Zilina. entrepreneur certifying that the connec- technical conditions and cost of 5. The relevant laws regulating the connection tion has been completed in accordance the connection process in Croatia are the Electricity Market Act (102/15); the Decision on the Amount of with the technical conditions. After PORTUGAL the Fee for Connecting to the Power Grid and receiving the affidavit, SSD can decide Inspections by the utility—for which the for Increasing the Power (52/06); the Quality to investigate further and inspect the customer needs to be present—offer an Conditions of Supply of Electricity (31/18); the Decision on the Amount of Tariff Items for connections that require more scrutiny. opportunity for simplifying the process in Guaranteed Electricity Supply (114/17); and These good practices are among the rea- Portugal. Before providing a cost estimate, the General Conditions for Using the Network sons that Zilina ranks number 1 among utilities in all the Portuguese cities except and Supplying Electricity (85/15). 6. In Zagreb the connection fee for a warehouse the Slovak cities and number 3 among Coimbra conduct an external inspection like the one in the Doing Business case study all 25 benchmarked cities on the ease of to check the surroundings of the building is HRK 1,700 (EUR 229) per kilovolt-ampere, getting electricity. and determine precisely where cables while in the other cities it is HRK 1,350 (EUR 181) per kilovolt-ampere. and the meter should be installed. But 7. The main legislative instruments governing Replace the internal wiring in many economies around the world the process for getting electricity in the Czech certificate with self-certification utilities use a geographic information Republic are the Quality Standards in the Electricity Sector (540/2005) and the Act of compliance system (GIS) and therefore have no need about Connecting to the Electricity Network PORTUGAL to visit the site. The utility in Coimbra (16/2016). In continental Portugal customers need does as well, thanks to a pilot project in 8. World Bank Enterprise Surveys, http:/ /www.enterprisesurveys.org. to obtain an internal wiring certificate that city. By replicating Coimbra’s pilot 9. While these are the most common scenarios from a certified third-party company.25 project, utilities in other Portuguese cities for connecting a warehouse like the one in the Ensuring the safety and quality of electri- could also use GIS to review connection Doing Business case study, the type of voltage can vary within a city and sometimes even cal wiring is crucial. But there are ways requests, streamlining the process and within an industrial park, depending on the to do so without imposing additional reducing the time needed to approve availability of power capacity. requirements for getting a new con- applications. 10. There are often several options for connecting. As in other countries (including Slovakia), nection. In several EU member states, utilities in the Czech Republic agree with new including Denmark and Germany as well customers on which option is the best. The as the Czech Republic and Slovakia, the roles and responsibilities of the parties vary depending on the option chosen. regulation allows the electrical contractor 11. In these cases the municipal permits required who built the internal wiring to take the for building the connection are obtained by the responsibility for certifying that it was entrepreneur as part of the process of getting a building permit for the new construction. done in accordance with the law and NOTES This option is common for commercial safety standards. buildings. 1. Pierre Audinet and Martin Rodriguez Pardina, 12. In Liberec and Usti nad Labem a project “Managing an Electricity Shortfall: A Guide for design is needed for the installation of a If electrical wiring is done under the Policymakers” (Energy Sector Management private substation. In Olomouc, Ostrava and supervision of qualified and regulated Assistance Program, World Bank, Washington, Plzen it is needed for both the substation and electrical contractors, its safety can be DC, 2010), the external connection. http://documents.worldbank.org/curated 13. In Liberec and Usti nad Labem, as well as in ensured without an inspection by a sepa- /en/337601468017341236/Managing-an Brno and Prague, the excavation permit is rate entity—and the process can be made -electricity-shortfall-a-guide-for-policymakers. obtained by the utility. faster and less cumbersome without 2. Carolin Geginat and Rita Ramalho, “Electricity 14. These are Romania (174 days), Belgium (201 Connections and Firm Performance in 183 days), Hungary (257 days) and Bulgaria (262 compromising safety. Proper regulation Countries,” Policy Research Working Paper days). of the electrical engineering profession is 7460 (World Bank, Washington, DC, 2015). 15. Act 16/2016, attachment 8. key. To work effectively, systems of self- 3. These regulatory agencies are the Croatian 16. This connection fee applies to a connection Energy Regulatory Agency (HERA) in with a subscribed capacity of 140 kilovolt- certification need to be accompanied by Croatia, the Energy Regulatory Office (ERU) amperes, like the one in the Doing Business legal provisions specifying the qualifica- in the Czech Republic, the Energy Services case study. tion requirements and the liability of the Regulatory Authority (ERSE) in Portugal and 17. In Liberec and Usti nad Labem, as well as in the Regulatory Office for Network Industries Brno and Prague, the connection is typically professionals involved. (URSO) in Slovakia. Each of these agencies is built by a subcontractor hired by the utility, responsible for supervising the national power and there is no additional cost for the sector (generation, transmission, distribution customer. and supply) as well as electricity prices. 18. Power distribution in Portugal is governed 4. In the Czech Republic medium-voltage by Regulation 561/2014 on the Commercial connections are more common in Liberec, Relations in the Electricity Sector. Olomouc, Ostrava, Plzen and Usti nad Labem, 19. These are France, Poland, the Czech Republic, and low-voltage connections more common in the United Kingdom, Finland, the Netherlands Brno and Prague. In Slovakia medium-voltage and Sweden. 56 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA 20. The primary legislation governing the electricity market in Slovakia is the Bill about the Energy Sector (251/2012), which outlines the rights and responsibilities of all electricity market participants. Other relevant laws that regulate the connection process include the 236/2016 Directive from the Regulatory Office for Network Industries (URSO) on the quality standards for transmission, distribution and generation of electricity. This bill includes the compensation mechanisms for violation of the quality standards (available at https://www.slov-lex.sk/pravne-predpisy/SK /ZZ/2016/236/). Another is the 271/2012 Directive from the Ministry of Economy (Directive specifying technical conditions about connecting to the electricity network), on the basis of which distribution companies create standardized technical conditions for connecting to the distribution network. 21. See World Bank, Doing Business in Italy 2013 (Washington, DC: World Bank, 2013), Doing Business in Poland 2015 (Washington, DC: World Bank, 2015) and Doing Business in Spain 2015 (Washington, DC: World Bank, 2015). 22. These include Bucharest, Cluj-Napoca, Constanta and Iasi. See World Bank, Doing Business in the European Union 2017: Bulgaria, Hungary and Romania (Washington, DC: World Bank, 2017). 23. Jean Arlet, Diane Davoine, Tigran Parvanyan, Jayashree Srinivasan and Erick Tjong, “Getting Electricity: Factors Affecting the Reliability of Electricity Supply,” in World Bank, Doing Business 2017: Equal Opportunity for All (Washington, DC: World Bank, 2016). 24. Among the Bulgarian cities covered by a subnational Doing Business study, those in which low-voltage connections are commonly available (Burgas, Plovdiv, Ruse and Varna) have a cost of 107.1% of income per capita. See World Bank, Doing Business in the European Union 2017: Bulgaria, Hungary and Romania (Washington, DC: World Bank, 2017). 25. In continental Portugal until December 2017, the internal wiring of a new building needed to be certified by Certiel, the association responsible for providing inspections in that part of the country. In 2018 Certiel ceased this function, and customers now hire a private certifying entity to inspect and approve the internal wiring. Among the firms qualified to provide these inspections are the Portuguese Electrotechnical Institute (Instituto Electrotécnico Português, IEP), the Industrial Quality Laboratory (Laboratório Industrial da Qualidade, LIQ) and the Quality and Welding Institute (Instituto de Soldadura e Qualidade, ISQ). The situation is different in Funchal and Ponta Delgada. In Funchal customers are required only to submit a notification of the completion of the internal wiring to the regional energy agency. And in Ponta Delgada no inspection or notification is needed. Registering Property MAIN FINDINGS ƒƒ In each of the four countries the data show meaningful variations among the benchmarked cities in the efficiency of registering a property transfer. ƒƒ The time for the property transfer drives the differences in efficiency. In Croatia, for example, registering a property transfer takes 32 days in Osijek but more than twice as long in Split (72 days). ƒƒ Portugal is the only country among the four where registering a property transfer does not require the use of legal professionals such as lawyers or notaries. But it also has by far the highest cost to register a property transfer (7.3% of the property value). ƒƒ Slovakia’s strong performance on both the efficiency and the quality of the land administration places the country among the top 3 EU member states on the ease of registering property and at 7 in the global ranking. 58 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA P roviding secure property rights is of the land registry and cadastre to dis- The Czech Republic has been computer- critical to support investment, pro- trict offices. All these changes earned izing its cadastre and land registry, and it ductivity and economic growth.1 Slovakia’s cadastre recognition as being has linked the cadastre with other nation- For some countries, doing so might entail advanced and progressive.2 Slovakia al registers to avoid duplication of the not only undertaking legal reforms but places among the top 10 in the Doing identification numbers and addresses of also creating a reliable infrastructure, Business global ranking of 190 economies legal and natural persons.3 And Portugal especially in the form of digital land on the ease of registering property. has made headlines with its Casa Pronta records and cadastral maps. service desks, which arose in 2007 from The other three EU member states the national SIMPLEX program aimed at Slovakia provides a telling example: covered by this report have also been streamlining bureaucracy and making an early effort to overhaul its cadastre modernizing their land administration life easier for citizens. At these one-stop helped smooth the way in computerizing systems. Since November 2016 Croatia service desks, dedicated to property- and modernizing its land administration has integrated the management of its related transactions, land registry clerks system during the postcommunist transi- cadastre and land registry through the can draft deeds on the spot, speeding tion. By February 2004 Slovakia had made Joint Information System, a centralized up the process by making the use of information from the cadastre accessible web-based system linked with other key notaries optional. Indeed, customers can online, free of charge. In September 2009 registers (including the personal iden- complete all the steps needed to register it introduced lower fees for property trans- tification register, address register and a property transfer at these service desks, fers submitted electronically, to provide business register). The Joint Information including paying the transfer tax. an incentive for citizens and businesses System was developed under the ongoing to choose the online option. And in 2013 Integrated Land Administration System Economies that invest in a digital cadas- the central authority delegated the control Project, supported by the World Bank. tre and land registration system benefit in WHAT DOES REGISTERING PROPERTY MEASURE? Doing Business records the full sequence of procedures necessary for a business (the buyer) to purchase a property from another business (the seller) and to transfer the property title to the buyer’s name so that the buyer can use the property for expanding its business, use the property as collateral in taking new loans or, if necessary, sell the property to another business. It also measures the time and cost to complete each of these procedures. In addition, Doing Business measures the quality of the land administration system in each economy. The quality of land administration index has four main dimensions: reliabil- ity of infrastructure, transparency of information, geographic coverage and land dispute resolution (see figure). Registering property: measuring the efficiency and quality of the land administration system Rankings are based on distance to frontier scores for four indicators Days to transfer Cost to transfer Measures whether the land registry and mapping system property between two property, as % of Reliability (cadastre) have adequate infrastructure to guarantee high local companies property value standards and reduce risk of errors Time Cost Transparency Measures whether and how the land administration system 25% 25% makes land-related information publicly available 25% 25% Procedures Quality of land administration Measures the extent to which the land registry and mapping index Coverage system (cadastre) provide complete geographic coverage of privately held land parcels Steps to transfer property so that it can be sold or used Measures the accessibility of conflict resolution mechanisms Dispute and the extent of liability for entities or agents recording as collateral resolution land transactions REGISTERING PROPERTY 59 several ways. One way is through greater Portugal. But their authority is not limited efficiency. Computerization optimizes HOW DOES REGISTERING by geographic location; they can take processes by streamlining workflows, PROPERTY WORK IN THE actions relating to any immovable prop- and it helps compile, access and share FOUR MEMBER STATES? erty in Portugal. information in ways not possible with manual systems. Faster processes speed In the Czech Republic the land registry How does the process compare up mortgage applications and reduce the and cadastre have been integrated since across the four member states? time involved in transferring real property 1993 and are now under one umbrella Portugal is the only country among the rights, often saving time for applicants as institution—the State Administration four where registering a property transfer well as for staff at the land registry and of Land Surveying and Cadastre (Státní does not require the use of legal profes- cadastre. Computerization also allows správa zeměměřictví a katastru). One sionals such as lawyers or notaries (figure governments to set up tracking mecha- of the largest data information systems 5.1). Applicants can simply go to the local nisms to help assess the performance in the state administration, the cadastre Casa Pronta service desk and have their of land registry and cadastre staff and includes a detailed inventory of the loca- deed prepared on the premises by a land improve their services for customers. tion and dimensions of each parcel of registry clerk using a template, before the Data accuracy and security are other land as well as records of property rights. property transfer is officially registered by advantages: each transaction entered in the land registrar. If applicants prefer not a computerized system can be automati- Similarly, in Slovakia the cadastre and to use the template deed, they can have cally registered, duplicated and retrieved. land registry constitute one information their deed drafted by a notary or lawyer system under the Geodesy, Cartography and then registered directly by the land With real property (land and buildings) and Cadastre Authority of the Slovak registrar in the land registry (Registo accounting for between half and three- Republic (Úrad geodésie, kartografie Predial). But this option is more expensive quarters of the wealth in most economies, a katastra Slovenskej republiky). The and time consuming and therefore typi- having an accurate and up-to-date land cadastre and land registry are managed cally reserved for complex transactions. information system matters.4 Research through district office cadastral depart- The transfer tax can be assessed and paid suggests that property owners with ments. Kapor (Katastrálny portál), the directly at either the land registry office or secure ownership are more likely to invest online version of the land registry records, the Casa Pronta service desk. in private enterprises and to transfer land is the largest public online database in to more efficient users. In addition, the Slovakia, allowing anyone to search basic In Croatia a notary must notarize the sale ability to access authoritative informa- data on land plots and their owners free and purchase agreement by verifying the tion on land ownership reduces transac- of charge. authenticity of the seller’s signature. And tion costs in financial markets, making it in the Czech Republic and Slovakia nota- easier to use property as collateral.5 Land In Croatia the cadastre and land registry ries are also used in practice to verify the registries along with cadastres identify- are under the supervision of two dif- signatures of the seller. But this can also ing the location of property are tools ferent institutions. The State Geodetic be done by a civil servant—in the Czech used around the world to map, prove and Administration manages the cadastre Republic, at a cadastral office, a registrar’s secure property rights. For governments, through its regional offices. It supervises office (matrika) or one of the Czech Point having reliable, up-to-date information a network of 113 cadastral offices spread service centers located in post offices in cadastres and land registries is essen- across the country, though the one in throughout the country; and in Slovakia, tial to correctly assess and collect tax Zagreb operates under the supervision at a registrar’s office (matrika). revenues. It also enables governments of the City of Zagreb. The Ministry of to map out the varying requirements of Justice is responsible for the land registry To transfer a property in the Czech cities and strategically plan the provision through the Land Registry Management Republic, an entrepreneur needs to of services and infrastructure to meet the Service, overseeing 107 land registry interact with the cadastral office at least greatest needs across each city.6 offices subordinated to the municipal twice—to check for encumbrances on courts. the property and, once the signature on the sale and purchase agreement has In Portugal the land registry is kept by the been certified, to apply for registration. land registry offices, under the direction The process ends when the entrepreneur of the land registrars. These offices, part pays the transfer tax. of the Institute of Registries and Notaries (Instituto dos Registos e do Notariado), In Slovakia diligent entrepreneurs will are located in every municipality across obtain an extract from the commercial 60 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA FIGURE 5.1  Portugal has simpler procedural requirements for transferring property than Slovakia, the Czech Republic and Croatia CROATIA CZECH REPUBLIC PORTUGAL SLOVAKIA Preregistration Preregistration Preregistration Preregistration Obtain land registry extract Buyer checks for encumbrances Each party obtains extracts from from land registry office on property commercial register at district court Have sale contract notarized Notary certifies signatures on Confirm authenticity of seller's transfer agreement signature before applying for registration Registration Registration Registration Registration Register title transfer at Apply for registration at Register property at the Submit application for registration land registry office cadastral office Casa Pronta service desk of transfer with district office cadastral department Postregistration Postregistration Submit sale contract to municipal Pay real estate transfer tax tax administration to receive estimate of real estate transfer tax Pay real estate transfer tax, stamp duty and registration fees at a commercial bank or post office National government Local government Notary or lawyer Bank or post office Source: Doing Business database. registry at the district court before hav- Among the four countries, property In the Doing Business global ranking on ing their signature on the sale and pur- registration is easiest in Slovakia, where the ease of registering property, econo- chase agreement certified by a notary it requires three procedures, takes 11.1 mies are ranked by the performance in and visiting the district office cadastral days on average and costs EUR 272—a their largest business city.7 How would department to register the property minimal amount relative to the value of each of the four countries fare if its rank- transfer. No further procedure is needed the property in the Doing Business case ing were based instead on the average in Slovakia. The real estate transfer tax study. Among the 25 cities benchmarked, performance of its benchmarked cities? was abolished in 2005, so it is no longer the process is easiest in Trnava (Slovakia) Slovakia’s strong average performance necessary to have the municipal tax and most difficult in Split (Croatia) (table on both the efficiency and quality of authority assess the amount of tax due 5.1). There is little variation within any land administration would place the or to pay the tax. of the countries except Croatia, where country among the top five EU member a property transfer can take anywhere states and at number 7 in the global In Croatia the registration process is from 32 days to 72 across the five bench- ranking of 190 economies. Portugal more complex. The process requires two marked cities. would stand at 33 in the global rank- separate interactions with the local land ing despite uneven results across the registry office under the municipal court: Of the four countries, Portugal has the registering property indicators, with the first to obtain the land registry extract least complex process, requiring only fifth highest cost in the EU and the sixth as part of a due diligence process and one procedure, as well as the fastest one, lowest score in the EU on the quality of then, once the sale and purchase agree- taking 3.8 days on average. But it also has land administration index. But it would ment has been notarized, to register the by far the most expensive one, costing lead the global ranking in number of title transfer before paying the stamp 7.3% of the property value. Transferring procedures and place close to the top duty and the registration fee. It is also property is most difficult and time con- 10 globally in the speed of the process. recommended that the applicant submit suming in Croatia, where it takes five Croatia would stand at 52 in the rank- the sale contract to the municipal tax procedures and 47.4 days on average, at ing, slightly below the EU average of administration (though the notary is a cost of 4.0% of the property value. The 51 but ahead of Germany and France. legally required to do this as well), in cost is similar in the Czech Republic, but The Czech Republic, performing close order to receive an estimate of the real the process requires only four procedures to the EU average on all the indicators estate transfer tax and thus be able to and takes 25.5 days on average across covered, would be at 30 in the global pay this tax. the seven benchmarked cities. ranking (figure 5.2). REGISTERING PROPERTY 61 TABLE 5.1  Registering property in Croatia, the Czech Republic, Portugal and Slovakia—where is it easier and where is the land administration system more accessible and reliable? Distance to Cost Quality of land frontier score Procedures Time (% of property administration City (Country) Rank (0–100) (number) (days) value) index (0–30) Trnava (Slovakia) 1 91.48 3 5.5 0.0 25.5 Kosice (Slovakia) 2 91.24 3 7.5 0.0 25.5 Zilina (Slovakia) 3 91.00 3 9.5 0.0 25.5 Presov (Slovakia) 4 90.17 3 16.5 0.0 25.5 Bratislava (Slovakia) 4 90.17 3 16.5 0.0 25.5 Ostrava (Czech Republic) 6 80.22 4 23.5 4.0 25 Brno (Czech Republic) 7 80.10 4 24.5 4.0 25 Usti nad Labem (Czech Republic) 7 80.10 4 24.5 4.0 25 Liberec (Czech Republic) 9 79.98 4 25.5 4.0 25 Olomouc (Czech Republic) 9 79.98 4 25.5 4.0 25 Prague (Czech Republic) 11 79.74 4 27.5 4.0 25 Plzen (Czech Republic) 11 79.74 4 27.5 4.0 25 Funchal (Portugal) 13 79.43 1 1 7.3 20 Faro (Portugal) 13 79.43 1 1 7.3 20 Ponta Delgada (Portugal) 13 79.43 1 1 7.3 20 Braga (Portugal) 16 79.31 1 2 7.3 20 Evora (Portugal) 17 79.19 1 3 7.3 20 Coimbra (Portugal) 18 79.07 1 4 7.3 20 Porto (Portugal) 19 78.59 1 8 7.3 20 Lisbon (Portugal) 20 78.35 1 10 7.3 20 Osijek (Croatia) 21 75.86 5 32 4.0 23.5 Rijeka (Croatia) 22 75.02 5 39 4.0 23.5 Zagreb (Croatia) 23 74.07 5 47 4.0 23.5 Varazdin (Croatia) 23 74.07 5 47 4.0 23.5 Split (Croatia) 25 71.08 5 72 4.0 23.5 Source: Doing Business database. Note: Rankings are based on the average distance to frontier score for the procedures, time and cost associated with registering property as well as for the quality of land administration index. The distance to frontier score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in the European Union Member States 2018: Croatia, the Czech Republic, Portugal and Slovakia.” The data for Bratislava, Lisbon, Prague and Zagreb have been revised since the publication of Doing Business 2018. The complete data set can be found on the Doing Business website at http://www.doingbusiness.org. Scores on the quality of land administration procedures—a number matching the EU amounted to more than 2,000 at the index do not vary within the four countries. average—and costs the same 4.0% of end of February 2018—almost 10 times Slovakia has a score 3 points lower, and the property value. But the time it takes the backlog in Rijeka, with a population the Czech Republic a score 3.5 points varies widely. Registering a property takes of 128,624. Indeed, the large backlog in lower, than those of Lithuania and the 32 days in Osijek but more than twice as Split even exceeds the size of the one in Netherlands, which are the highest among long in Split (72 days) (figure 5.2). Zagreb, a city with four times the popu- EU member states. Croatia scores almost lation. The land registry office in Split, 1 point better than the EU average of 22.7 In the cities where it takes more time, with 2 judges and 15 clerks, barely keeps points. And Portugal places in the bottom title registration tends to account for the up with the monthly inflow of 1,600 tier among EU member states, with a score difference. The variation in time for this cases, even though clerks are expected 5.5 points lower than Slovakia’s. procedure is driven in part by differences to complete 6 cases a day by law.8 By in both the type and volume of transac- comparison, the land registry office in How does the process vary tions as well as by historical backlogs. In Osijek manages to limit its backlog to within Croatia? Split, with a population of 178,102, the less than 50 cases and keeps up with an In all five Croatian cities, register- backlog of unresolved cases (requests inflow of about 11,000 cases a year with ing a property requires the same five for the registration of ownership rights) 12 active employees.9 62 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA FIGURE 5.2  Compared with EU averages, property registration is simpler or as simple in all four countries—and faster in Portugal and Slovakia Time (days) Quality of land administration index (0–30) 80 30 Singapore (global best) Split Lithuania (EU best)a 70 All 5 Slovak cities All 7 Czech cities 25 60 All 5 Croatian cities EU average 20 50 All 8 Portuguese cities Varazdin, Zagreb 40 Rijeka 15 Osijek 30 Prague Plzen EU average Olomouc Liberec 10 Usti nad Labem Brno Ostrava 20 Presov, Bratislava 5 10 Lisbon Zilina Porto Kosice Coimbra Trnava Evora Lithuania (EU best) Braga Faro, Funchal, Ponta Delgada 0 0 0 1 2 3 4 5 Procedures (number) Cost (% of property value) 0.0 Croatian city 2.0 Czech city 4.0 Portuguese city 6.0 Slovak city 7.3 Source: Doing Business database. Note: The averages for the EU are based on economy-level data for the 28 EU member states. a. The Netherlands also has a score of 28.5 on the quality of land administration index. One solution for dealing with a case back- the county court and was possible only Zagreb were as fast, Croatia’s distance log is to share some of the workload with thanks to the Joint Information System, to frontier score for registering property a land registry office that has no backlog. which facilitates the transfer of cases would reach 75.86—putting the country Municipal courts can help one another. among land registry offices. Without this ahead of the United Kingdom, Japan and Take the example of Varazdin, which system, Varazdin would have had to hire Spain in the Doing Business global ranking was struggling with a case overload; and train temporary workers to deal with on the ease of registering property. the land registry office at the municipal the backlog, a solution requiring more court reached an agreement with its time and money. A sharing agreement A reform implemented in early 2017 counterpart at the Koprivnica court to between municipal courts under different might already be helping to streamline lend some staff time. The land registry county courts would also be possible, property registration in Croatian cities. office at the Varazdin municipal court but it would require approval from the The reform gave a new role to lawyers now regularly sends straightforward Supreme Court of Croatia. and notaries willing to obtain a special cases (inheritance, parcellation of plots) certification: they can now take care to Koprivnica while focusing on the more Among the five benchmarked cities in of the entire registration process on complex cases. This sharing agreement Croatia, Osijek stands out for its speed behalf of their clients. Once they have had to be approved by the president of in dealing with property registration. If reviewed a title transfer application for REGISTERING PROPERTY 63 FIGURE 5.3  The time required to register a property transfer varies substantially objections from the owner of the prop- among the Croatian cities erty with respect to its transfer. Portugal Slovakia Czech Republic Croatia The variation in time within the Czech Time (days) Republic is driven mainly by differences 1 (Faro, Funchal, in efficiency among local cadastral offices. Ponta Delgada) 5.5 (Trnava) By law, cadastral offices must issue a seal 10 (Lisbon) on a property within 24 hours of receiving 16.5 (Bratislava, Presov) an application for its transfer, and notify 23.5 (Ostrava) 27.5 (Plzen, Prague) interested parties of the seal within 48 32 (Osijek) hours of receiving the application. Some cadastral offices are faster than others to notify the interested parties. Those in Brno and Usti nad Labem both issue the seal and notify the interested parties within 24 hours, while those in the other cities usu- ally adhere to the legal deadlines. 72 (Split) Property registration in all seven Czech Source: Doing Business database. cities costs the same (4.0% of the prop- completeness, these certified legal pro- national regulation and apply uniformly erty value) and requires the same four fessionals can directly submit the appli- throughout the country. The notary fee procedures. On average, the Czech cities cation online, allowing the entrepreneur for certifying the seller’s signature is outperform the EU average on all the reg- to save time by skipping a trip to the land HRK 40 (EUR 5.38), the registration fee istering property indicators except time. registry office. payable to the land registry is HRK 200 (EUR 26.89), and the stamp duty is HRK How does the process vary The system was successfully piloted in 50 (EUR 6.67). Across the Croatian cit- within Portugal? Osijek in February 2017, first with two ies, the cost of property registration is Portugal has become an attractive mar- notaries who went to Zagreb to receive therefore well below the EU average of ket for real estate investment in recent training on the new software allowing the 4.8% of the property value. years.10 There has been enormous growth submission of property registration appli- in the volume of property transactions, cations. Subsequently, more notaries and How does the process vary particularly in Lisbon, which has had an lawyers across the country signed up to within the Czech Republic? adverse effect on the efficiency in dealing offer the service. But in November 2017, In the Czech Republic, as in Slovakia, with property registration in parts of the of the thousands of applications filed there is little variation in processing time country. But the process remains fast and across Croatia, only 174 were submitted across the benchmarked cities. Property simple in most of the eight cities bench- electronically by a certified legal profes- registration in Ostrava, where it requires marked in Portugal—though also costly. sional. One reason for the slow start the least time (23.5 days), takes only 4 might be the additional fee that certified days less than in Plzen or Prague, where it In all eight cities, registering a property legal professionals charge for the service. takes the most. generally takes a single procedure (some But while it may take time, this approach municipalities may require additional could catch on more broadly with legal Compared with the Slovak cities, how- verifications if the property is in a histori- professionals, offering a new option ever, the Czech cities take more than cal patrimony area, as in Ponta Delgada, for entrepreneurs selling a piece of real twice as long on average to complete a for example). This places Portugal among estate. property transfer. The main reason is a the four economies in the world where 20-day stay period that starts upon the property registration requires only one The government also recently amended issuance of a seal on the property, which interaction with the authorities.11 And the cost to register a property, which is is a notation on the land records made in Faro, Funchal and Ponta Delgada that the same across Croatia. On January 1, after the application is received. During procedure can be done on a walk-in 2017, it reduced the real estate transfer this 20-day period nothing can be done basis, within a few hours, at the local tax from 5% of the property value to with the application and no registration Casa Pronta service desk—as long as the 4%. Like this tax, the notary fee, stamp can be performed. This time, required applicant uses the appropriate template duty and registration fee are all set by by the cadastral law, allows for possible to draft the deed. 64 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA In the other five Portuguese cities the deadline for completing the registration for registering property would reach main variation in the time for title regis- becomes 24 hours. 83.59—putting the country ahead of the tration reflects the wait for an appoint- Netherlands and Austria in the Doing ment at the local Casa Pronta service Across Portugal, for a property transac- Business global ranking on the ease of desk. This wait can be as long as 8 days, tion like the one in the Doing Business registering property. as in Porto, or even 10, as in Lisbon. In case study, involving the transfer of an these two cities the local offices receive a urban property that is not exclusively How does the process vary much higher volume of requests, creating residential, a municipal property transfer within Slovakia? a wait that does not really exist elsewhere tax is payable at a single rate of 6.5% of The five cities benchmarked in Slovakia in Portugal. By contrast, there is little or the property value. In addition, unless the beat the EU average on all three indica- no wait in the other cities, assuming that sale is subject to value added tax, a stamp tors measuring the efficiency of property the entrepreneur has gathered all the duty of 0.8% is due for the registration of registration—with three procedures, a required documents and used the tem- the public deed in the land registry office. time of 11.1 days on average and a cost of plate for real estate transfer available on 0.0% of the property value. Among the the website of the Institute of Registries The fees to register a property transfer at five cities, registering a property transfer and Notaries. But while the length of the a Casa Pronta service desk are regulated is easiest in Trnava, where the three wait for an appointment depends mainly and apply throughout the country. Under procedures take 5.5 days, and most dif- on the number of requests received, the standard procedure they amount to ficult in Bratislava and Presov, where they Coimbra is an exception: there the wait EUR 375. Under the expedited procedure take 16.5 days—in all cases assuming is longer than in Faro, Funchal, Ponta to register a property transfer at the land that the entrepreneur chooses the expe- Delgada and Evora, all cities with a higher registry office the fees double. In addition, if dited track. The variation in time is driven caseload of property transfers (figure the deed is not drafted by Casa Pronta desk mainly by differences in efficiency among 5.4). staff, it will have to be prepared by a notary the district office cadastral departments. for a fee. For a complex deed a private And even in Porto and Lisbon it is possible notary may charge an extra fee proportion- By law, the district office cadastral depart- to register a property transfer in a day or ate to the amount of work involved. ments must decide on an application for two.12 Entrepreneurs in a hurry may opt to registering a property transfer within 30 bypass the Casa Pronta service desk (and At 7.3% of the property value, the cost days if the standard procedure is used; 15 the wait for an appointment). Instead, to register property in Portugal is 2.5 days if the expedited procedure is used; for additional fees, they can have a deed percentage points higher than the EU or 20 days if the contract is in the form prepared by a notary or lawyer and then average of 4.8% of the property value. If of a public notary’s deed or a deed autho- registered directly by the registrar at the Lisbon were to reduce its cost to transfer rized by a lawyer. When the expedited land registry office using an expedited real estate to match the EU average, procedure is used, registration officers in procedure—for which the registrar’s legal Portugal’s distance to frontier score all the Slovak cities usually meet the legal deadline. Some district office cadastral departments even beat the deadline, FIGURE 5.4  The wait for an appointment at the Casa Pronta service desk is usually such as those in Kosice, Trnava and Zilina. longer in cities with a higher caseload of property transfers The efficiency of the office in Trnava can Time Property transfers registered be explained in part by its having expe- (days) (thousands, 2017) rienced employees and a lower turnover 12 50 than those in other cities. 10 40 When an office has little or no backlog, 8 30 the registration officers can tackle addi- 6 tional tasks, such as verifying that the 20 4 digitized files of the cadastre match the 10 paper ones. Trnava is among the Slovak 2 municipalities where the officers have 0 0 Faro Funchal Ponta Braga Evora Coimbra Porto Lisbon made the most progress in this respect, Delgada verifying close to 50% of the files. Time Property transfers registered In other cities the backlog of cases makes Sources: Doing Business database; Portuguese Institute of Registries and Notaries database (2017). it challenging to even meet the legal REGISTERING PROPERTY 65 deadline for title registrations. In Presov, these fees can be further reduced by EUR On the reliability of infrastructure, for example, the legal deadline is usually 15 if a notice of an intended registration is Slovakia could improve its performance met for the cases submitted under the filed 15 days in advance. by keeping the majority of title or deed expedited procedure only because these records in a computerized format rather cases, entailing a higher processing fee, How does the quality of land than in a paper format. And it could earn receive special treatment. If an expedited administration vary among the a higher score on land dispute resolution case is resolved after the 15-day time lim- four member states? by making available statistics on the it, the applicant is entitled to reimburse- While the time, cost and procedural com- number of land disputes in the first- ment of the fees. For cases submitted plexity of property registration all matter instance court. under the standard procedure, applicants for businesses, good land administration in Presov sometimes have to wait beyond goes beyond efficiency. It ensures property The Czech Republic scores full points the official 30-day limit to have their title owners a secure title, backed by a reliable on both the reliability of infrastructure registered. This is due mainly to a decline land administration system. Doing Business and the geographic coverage of the in resources and a backlog of cases, assesses the quality of this system on the cadastre register. The land records and amounting to more than 2,000 in March basis of four main dimensions: reliability cadastral maps are all in digital format. 2018.13 There is a reason for the greater of infrastructure (0–8 points); geographic This enables seamless communications backlog in Presov: since 2010 the number coverage (0–8); transparency of informa- not only between the cadastre and land of applications received annually has tion (0–6); and land dispute resolution registry divisions of the Czech State gradually increased by 37% (from 7,228 (0–8). Results for these dimensions are Administration of Land Surveying and to 9,916), while the number of lawyers then added for the overall score on the Cadastre, but also with other government working in the registration department quality of land administration index (for agencies and with private parties. Every has fallen by 20% (from five to four). a possible 30 points). All four countries piece of property, public or private, is have a homogeneous legal framework, formally registered and properly mapped. If Bratislava were as fast as Trnava in deal- which explains why there are no variations And computerization provides a backup ing with property registration, Slovakia’s within each of their territories on the qual- system to protect information and make distance to frontier score would reach ity of land administration index. cross-checking data easier. 91.48, which would place the country among the top six in the Doing Business Slovakia earns 25.5 of 30 possible points Croatia scores 23.5 of 30 possible points global ranking on the ease of registering on the quality of land administration on the quality of land administration index, property. index. The country gets full points on with full points on geographic coverage. geographic coverage, as the cadastre and On the reliability of infrastructure, with Across all five of the Slovak cities, for an land registry cover its entire territory. And 6 of 8 points, Croatia could do better by applicant using the expedited procedure, it scores 5.5 of 6 points on the transpar- having the cadastre and land registry use the total cost to transfer property amounts ency of information, an indicator on which the same identification number for prop- to EUR 272. This cost consists mainly of only four economies in the world score erties. On the transparency of information the EUR 266 registration fee. But it also the maximum points (the Netherlands, Croatia has the lowest score among the includes the EUR 6 notary fee to confirm Romania, the Russian Federation and four countries, 3.5 of 6 points. It could the authenticity of the seller’s signature at Singapore). Making land-related infor- improve its score if the land registry the registrar’s office (matrika). mation—such as fee schedules, time committed to delivering a legally binding limits for service delivery and statistics document that proves property ownership The total amount places Slovakia among on transactions—publicly available within a specific time frame and if there the five economies in the world where provides clients with critical information were a specific, separate and independent the cost of property registration is 0.0% on the transactions they undertake and mechanism for filing complaints about any of the property value in the Doing Business reduces mistakes and opportunities for problems occurring at the land registry. case study. This amount can be even bribery. The best practice is for registries lower if the applicant uses the 30-day and cadastres to make such information Portugal’s score on the quality of land standard procedure, which has a basic available online, as is done in Slovakia, administration index, 20 of 30 possible registration fee of EUR 66. Moreover, two or on a public board at the agency. The points, puts the country in the bottom tier types of discounts may apply to the fees. country could improve its performance among EU member states on this indica- If the application is lodged electronically, on the transparency of information by tor. The main weakness is the lack of full the basic fee is reduced from EUR 66 making publicly available official statis- geographic coverage by the cadastre to EUR 33 and the fee for the expedited tics tracking the number of transactions and land registry (mainly in rural areas), procedure from EUR 266 to EUR 133. All at the land registry. earning the country only half the possible 66 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA points in this area (4 of 8). The utility of In Croatia entrepreneurs submitting an lack of interconnectivity and data shar- even the most reliable and transparent application for a property transfer often ing between the agencies and courts land administration system is under- request urgent handling of their case, involved in the property transfer process. mined if it does not cover the economy’s since the request involves no extra cost. If It would no longer be required if the land entire territory. the land registry office considers the case registry office could check tax informa- worthy of urgency, clerks try to accelerate tion on properties directly. Instead, this Another area where Portugal could do the registration process as much as pos- office receives a notification from the tax better is in the reliability of its infrastruc- sible.14 But because of the large number authority only after a decision is made on ture. Information recorded by the land of requests for urgent handling, the pro- the amount of real estate transfer tax. registry and the cadastral agency are kept cessing times for these cases differ little in separate databases, while the best from those for others. In Portugal entrepreneurs registering a practice is to have a unified database. property transfer have no need to interact Portugal could also improve in the area To effectively reduce processing times for with the tax authority. Because the regis- of transparency of information. In sev- those who really need it and help priori- tration officers at the Casa Pronta service eral ways its land administration system tize the work at the land registry offices, desk or land registry office have access to aligns with best practices in this area: the Ministry of Justice in Croatia and the tax information on properties, they can information on land ownership is freely State Administration of Land Surveying assess the tax liability and receive the available to anyone; the list of documents and Cadastre in the Czech Republic could tax payments. But while the registration required to complete any type of property consider offering a formal fast-track pro- officers can access the tax authority’s transaction and the applicable fee sched- cedure for an extra fee. database, they cannot edit any of its ule are made publicly available online; information. Instead, once a month they the land registry commits to delivering Other European economies have intro- send a template with information on the a legally binding document that proves duced similar procedures with positive most recent transactions (the Modelo 11) property ownership within a specific time results. In Lithuania the registration with to the tax authority so that it can update frame; there is a specific, separate and the Real Estate Register normally takes its database. Perhaps a next step could independent mechanism for filing com- 10 business days. But entrepreneurs who be full interoperability of the land registry plaints about a real property transaction; wish to have their property registered and the tax authority’s database. official statistics tracking the number of sooner can pay a higher registration fee transactions are publicly available; and for faster service: 30% more than the Over the past 13 years 50 economies anyone can consult maps of land plots. standard fee for registration in three worldwide simplified property regis- But the fee schedule for accessing maps business days, 50% more for registration tration and eliminated unnecessary of land plots can be obtained only in in two business days and 100% more requirements by linking systems across person, and the cadastral agency does for registration in one business day. As institutions. Denmark and Latvia were not commit to delivering an updated map noted, in Slovakia, while the standard among them. When Latvian municipali- within a specific time frame. registration procedure takes 30 days and ties gave the land registry access to tax costs EUR 66, entrepreneurs can choose information, they freed entrepreneurs to halve that time by paying EUR 266 operating in Riga from having to provide WHAT CAN BE IMPROVED? instead. Similarly, in Portugal entrepre- this information in paper format, saving neurs can register their property in just a them time and money. Croatia could fol- This chapter’s review of the efficiency and day or two if they pay a 100% markup on low their example. quality of land administration in Croatia, the land registry fee. the Czech Republic, Portugal and Slovakia Assess the feasibility of points to some possible improvements. Update local and national tax reducing property transfer taxes Several apply to just one or two of the information internally by linking PORTUGAL countries, others to three or more. systems across institutions Property transfer taxes are an important CROATIA source of revenue for many governments. Introduce a fast-track Registering a property transfer in But when transfer fees and taxes are too registration procedure Croatia requires interaction with the burdensome, people may be encouraged CROATIA, CZECH REPUBLIC local office of the tax authority—even if to undervalue property. Portugal is among In the Czech Republic, where property indirectly through a notary—to obtain the five EU member states with the high- registration is delayed by the 20-day stay an estimate of the real estate transfer est cost to register property. Most of the period, the process allows no room for tax that is due. This interaction with the cost comes from the property transfer fast-tracking a registration. tax authority is necessary because of a tax, set at 6.5% of the property value. REGISTERING PROPERTY 67 Over the past 10 years more than 50 in Croatia charge a bit more for the same only sign the agreement in person at the economies worldwide lowered transfer service (HRK 40, or EUR 5.38). registry. As a result, registering property taxes and other government fees related in several of the benchmarked Portuguese to property registration. In 2017 Croatia One potential way to streamline the pro- cities takes only one procedure and one lowered its property transfer tax from 5% cess is to require that a clerk at the local day. In Portugal, if an entrepreneur decides of the property value to 4%. And in 2005 cadastral or land registry office verify the to have a notary draft the transfer deed Slovakia stopped levying tax on property parties’ signatures upon receiving the (rather than having it drafted on the spot transfers. Purchasers of a new property property transfer application. Electronic at a Casa Pronta service desk), using the are subject only to the value added tax, solutions could also be explored. In official template can speed up the registra- income tax and yearly municipal tax. Croatia authorities could expand the use tion process by a few days. If the template of the e-Citizen system to help stream- is not used, the registrar needs to verify Revenue impact studies and tax simula- line the verification of identities required that the proposed deed complies with the tions could be conducted to assess as part of the authentication process. legal requirements, which takes time. whether the property transfer tax rate could be reduced in a way that is revenue Companies in Croatia, the Czech Republic An alternative way to make the use of neutral or revenue increasing. Lower fees and Slovakia also often ask a notary or legal professionals optional for the draft- may broaden the collection base for this lawyer to draft the sale and purchase ing of the sale and purchase agreement is tax. When the Egyptian government agreement, though this is not required by to periodically offer legal advice to appli- lowered the registration tax from 3% of law. Using legal professionals for this pur- cants. In Usti nad Labem, for example, the property value to a fixed fee of about pose also adds time and cost to the prop- lawyers at the cadastral office dedicate EUR 160, it recorded a 39% increase in erty transfer process. At the same time, one day a week to providing legal advice property registration revenue because allowing applicants to handle the task to the general public on how to draft a of an increase in the number of registra- themselves might result in poorly drafted sale and purchase agreement. This has tions.15 Other countries have seen similar legal documents, which would delay the helped improve the quality of the appli- results—including Greece, which reduced process. In Croatia for example, parties cations submitted to the cadastral office, its property transfer tax from 10% of the to a simple property transfer agreement reducing the number of applications property value to 3%.16 can purchase a sale and purchase agree- rejected for incompleteness. ment template from the Official Gazette, Introduce standardized but they usually need to hire the service Doing Business data show that three of four contracts for property transfers of a legal professional because they lack economies manage property registration and consider making the use of guidance on how to fill out the transfer without mandating the use of lawyers or lawyers or notaries optional agreement form properly themselves. notaries, including Denmark and Sweden. CROATIA, CZECH REPUBLIC, Croatia, the Czech Republic and Slovakia SLOVAKIA In many countries companies can choose are among the fewer than 40 economies Companies completing a property trans- to transfer a property without the assis- that require double verification of property fer in Croatia must have a notary authen- tance of legal professionals. They use a sale and purchase agreements. ticate their sale and purchase agreement standardized contract obtained online or by verifying the authenticity of the seller’s from the land registry. Standardized con- Create an electronic platform for signature. Those in the Czech Republic tracts reduce the potential for mistakes property transfers and Slovakia also often go to a notary or irregularities, because the content that CROATIA, CZECH REPUBLIC, to have the seller’s signature certified, is critical for the land registry is manda- PORTUGAL, SLOVAKIA though they have the option of having tory. Offering such contracts would also A nationwide electronic system allowing this done by a civil servant, such as at a reduce both the time and cost of registra- all requirements for transferring property registrar’s office (matrika). tion. Companies could still resort to legal to be completed online would make carry- consultation and tailor-made contracts, ing out land transactions easier as well as Relying on legal professionals to verify sig- especially for more complex cases—but increase the security and transparency of natures for property transfers adds at least by choice. the process. It would also save resources one procedure that takes one to two days for businesses and governments alike. and imposes additional costs, even if mini- Both Portugal and the United Kingdom mal. For the type of property in the Doing offer standardized contracts to the pub- Portugal has made great advances Business case study, notaries in the Czech lic. Portugal successfully made notary toward such a system, but the parties to Republic charge less than CZK 50 (EUR 2) involvement optional for companies the transaction or their lawyer still need to authenticate the signatures, while those wishing to transfer property: parties need to visit a Casa Pronta service desk or 68 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA land registry office in person to request application reaches the cadastral office, law. Today property registration can be registration. Both the Czech Republic it needs to be printed out and processed completed in just two steps, at a cost and Slovakia offer electronic filing as an in the same way as a paper application. of 0.1% of the property value—and New option (with Slovakia even offering it at This adds to the workload of the already Zealand tops the Doing Business ranking a discounted fee), and the parties might overstretched cadastral officials. on the ease of registering property. not need to visit the cadastral office in person. But the systems do not yet Countries that have implemented a fully Among EU member states, several have have fully developed infrastructure: they electronic system did so progressively implemented online registration. One of require electronic signatures (which can over several years. New Zealand digitized them is Denmark, where the government be challenging to provide when submit- its property records between 1997 and began modernizing its land registry more ting a sale and purchase agreement with 2002 and subsequently introduced than two decades ago (box 5.1). Today multiple parties), so the visit to the cadas- electronic registration. But by 2005 only electronic submission of documents is tral office in person remains the preferred about half of property transactions were mandatory for property transfers. And option to register a property in most being submitted electronically. A final completing a property transfer takes only cities. Moreover, the systems are not push was needed. In 2008 electronic 4 days—down from 42 in 2003, when the fully digitized, so that once an electronic registration was made mandatory by first Doing Business data were produced. BOX 5.1 Going electronic in property registration—an EU example of good practice from Denmark Denmark used to have a complex property registration system. At its core was an archive of around 80 million paper documents managed by local district courts that were not connected to one another. Completing a property transfer required working with thick, heavy land books in the local district court—a long and burdensome process for employees and customers alike. The Danish government recognized the need to modernize land administration, and in 1992 the Parliament amended the Land Registration Act to allow computerization—with the aim of speeding up the registration process and improving customer ser- vice. Between 1993 and 2000 the government scanned all records and computerized the country’s then 82 judicial district of- fices. While the records were being scanned, staff were being trained in how to work with the new registration system. In 2006, after the land records were fully digitized, work to develop a paperless registration system began. Another amendment to the Land Registration Act created the legal basis for implementing a digital land registry, which was completed and operation- al by 2009. By 2011 Denmark required all applications to be submitted online, enabling more efficient screening of applications. Today, transferring a property in Denmark requires only three procedures, all of which can be completed online. Thanks to the online access to a single source of land registration data, citizens and businesses can transfer property on their own, with no involvement by third parties such as lawyers or notaries. They can also obtain information on any property. The Danish financial sector played a part: to facilitate access to credit as well as to information, it created a central hub allowing banks and the land registry to share land registration data. Sources: Information from the portal of the Danish Registration Court (http://www.tinglysningsretten.dk); Doing Business database. REGISTERING PROPERTY 69 NOTES 1. Stijn Claessens and Luc Laeven, “Financial Development, Property Rights, and Growth,” Journal of Finance 58, no. 6 (2003): 2401–36. 2. Babette Wehrmann, “Governance and Land Tenure in Eastern Europe and Commonwealth of Independent States (CIS),” Land Tenure Working Paper 16 (Food and Agriculture Organization, Rome, 2010). 3. These are the Register of Territorial Identification, Addresses and Real Estates; the Register of Persons; and the Register of Inhabitants. “Cadastral Template 2.0: Czech Republic,” Centre for Spatial Data Infrastructures and Land Administration, University of Melbourne, last modified November 11, 2015, http:/ /cadastraltemplate .org/czech%20republic.php. 4. World Bank, World Development Report 1989 (New York: Oxford University Press, 1989). 5. Simon Johnson, John McMillan and Christopher Woodruff, “Property Rights and Finance,” American Economic Review 92, no. 5 (2002): 1335–56. 6. Property information held in cadastres and land registries is part of the land information available to governments. Land information also includes other geographic, environmental and socioeconomic data related to land that are useful for urban planning and development. 7. Eleven economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) are also represented by the second largest business city. The data for these 11 economies are a population-weighted average for the two largest business cities. 8. Narodne Novine, nos. 97/05 and 64/12; Regulation on Norms for the Work of Land Registry Clerks, article 5, paragraph 1, point 2. 9. Data from the Census of Population, Households and Dwellings 2011, Croatian Bureau of Statistics, December 2012. 10. JLL, “Portuguese Real Estate Market” (Lisbon, 2015), http:/ /www.jll.pt/portugal/en-gb /Research/JLL_RelatorioAnual2015_EN _FINAL.pdf. 11. The other three countries are Georgia, Norway and Sweden, according to Doing Business data. 12. This costlier option is not the one used in calculating the ranking on the ease of registering property. 13. Based on data provided by the Presov district office cadastral department. 14. There are no defined criteria for what is deemed urgent. In Varazdin, for example, priority is given to property registrations resulting from a foreign direct investment because these are “in the interest of Croatia,” according to land registry officers interviewed. 15. World Bank, Doing Business in Egypt 2008 (Washington, DC: World Bank, 2007). 16. World Bank, Doing Business in 2015: Going Beyond Efficiency (Washington, DC: World Bank, 2015). Enforcing Contracts MAIN FINDINGS ƒƒ Among the 25 benchmarked cities, 16 outperform the average for members of the European Union on the ease of enforcing contracts as measured by Doing Business. ƒƒ Most of the 25 cities surpass the EU average performance on cost and quality in enforcing contracts. Yet all but a few lag behind in speed. ƒƒ Among the four countries, the greatest subnational variation can be observed in Croatia: courts in Split take 60% longer to resolve commercial cases than those in Osijek. ƒƒ If the capitals of Croatia, Portugal and Slovakia each attained the best performances found within their country, they would place among the top 30 economies in the Doing Business global ranking on the ease of enforcing contracts—Zagreb and Lisbon among the top 15 and Bratislava among the top 30. ENFORCING CONTRACTS 71 E fficient courts play a key part in its legal framework and judicial orga- But there are reasons to be optimistic. By supporting credit markets, eco- nization—changes advocated by the mid-2017, after a steady reduction each nomic growth and foreign direct Economic Adjustment Programme for year, the number of pending enforcement investment. When the 2008 financial cri- the country.2 cases had fallen by 40% from the peak of sis hit, however, it exposed weaknesses more than 1.2 million in 2012.4 in civil enforcement across Europe. This A new civil procedure code that took was particularly true in Portugal. effect on September 1, 2013, streamlined Portugal’s case, while important, is not the and simplified court procedures for civil only one. In Croatia, despite substantial Portuguese courts had seen a sustained and commercial cases. The reformers reductions in court backlogs in the past increase in the time required to resolve redrew court districts to improve the 10 years, many cases remain pending, civil and commercial disputes since allocation of resources, reducing the especially in municipal courts. In Slovakia the early 1990s. Growing backlogs had number of districts from 234 to 23. They a recent assessment of selected district become a huge obstacle. Between 1991 strengthened the specialization and courts noted that despite a decline in and 2009 Portuguese courts had man- performance accountability of judges. the number of new cases, the number of aged to clear the incoming cases in a They also improved the supervision and pending cases has continued to increase.5 year only twice. And even though the accountability of enforcement agents and And in the Czech Republic officials have inflow of cases remained steady dur- gave them sophisticated tools to increase been working to address backlog issues ing those years, the overall number of their efficiency.3 in the courts of North Moravia and South pending cases more than doubled—from Bohemia.6 600,000 to 1.6 million.1 The turnaround has been remarkable. Clearance rates have improved, with Business-friendly regulations alone The Portuguese authorities had been courts regularly clearing 100% of their are not enough to spur growth; well- working on solutions even before the incoming cases in a year as well as reduc- functioning institutions are also key. A crisis hit, but after it did, overhauling the ing the backlog. There is still a long road study by the Bank of Portugal found that judiciary became a top priority. Between ahead, especially for civil enforcement countries with better institutions may 2011 and 2014 Portugal introduced cases—more than 700,000 of these cases achieve better economic performance sweeping reforms aimed at improving were pending in the courts in mid-2017. and attract considerably more foreign direct investment.7 Effective commercial dispute resolution has many benefits. Courts allow entrepreneurs to enforce WHAT DOES ENFORCING CONTRACTS MEASURE? their contractual and property rights. Efficient and transparent courts can Doing Business measures the time and cost for resolving a commercial dispute encourage new business relationships through a local first-instance court. The case study assumes that a seller deliv- because firms know they can rely on ers custom-made goods to a buyer who refuses delivery, alleging that the goods the courts if a new customer fails to pay. are of inadequate quality. To enforce the sales agreement, the seller files a claim And speedy trials are essential for small with a local court, which hears ar- enterprises—because they may lack the guments on the merits of the case. Rankings are based on distance to resources to stay in business while await- Before a decision is reached in favor frontier scores for three indicators ing the outcome of a long court dispute. of the seller, an expert is appointed Days to resolve Attorney, court and to provide an opinion on the qual- commercial sale dispute enforcement costs as through the courts % of claim value ity of the goods in dispute, which HOW DOES CONTRACT distinguishes the case from simple ENFORCEMENT WORK debt enforcement. Doing Business 33.3% 33.3% IN THE FOUR MEMBER also builds a quality of judicial pro- Time Cost STATES? cesses index that measures wheth- 33.3% er a location has adopted a series of Quality of judicial According to Doing Business research, to processes good practices in its court system in index enforce a commercial claim like the one four areas: court structure and pro- in the Doing Business case study, entre- ceedings, case management, court Use of good practices promoting preneurs in Croatia must go to the com- automation and alternative dispute quality and efficiency mercial courts (trgovački sudovi), those in resolution (see figure). the Czech Republic and Slovakia to the district courts (okresní soudy and okresné 72 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA súdy, respectively) and those in Portugal in Croatia, where the enforcement agents for EU member states on the ease to the civil division of the first-instance are municipal court clerks.9 In the Czech of enforcing contracts. Among the courts (juízo cível).8 In all four countries Republic the same court that hears the 25, Coimbra (Portugal) has the best a preparatory hearing can be ordered by trial also oversees enforcement. But this distance to frontier score for enforcing the judge, though in the Czech Republic is not so in the other three countries. In contracts, 74.60, with Osijek (Croatia) and Slovakia this rarely happens for Croatia the competent court for enforce- as the runner-up (table 6.1). The simple commercial disputes. ment matters is the municipal court Portuguese cities stand out, with all but (općinski sud), in Slovakia it is the district Lisbon ranking in the top 10 among the The trials are conducted through a series court of Banska Bystrica (Okresný súd 25 cities. Compared globally, 9 of the of hearings that are typically not consecu- Banská Bystrica),10 and in Portugal it is the cities—2 in Croatia and 7 in Portugal— tive but spread out. Once the evidentiary enforcement division of the first-instance would earn a place among the top 25 hearing is concluded, the judgment is court (juízo de execução). economies.11 The main weaknesses handed down. And once the time for reflected in the data for the 25 cities appeal has expired without an appeal What are the findings? are the time it takes to file and serve being filed, the judgment can be enforced Sixteen of the 25 cities benchmarked a complaint and the time required to by private enforcement agents—except in this study outperform the average enforce a final judgment. TABLE 6.1  Enforcing contracts in Croatia, the Czech Republic, Portugal and Slovakia—where is it easier? Distance to Quality of judicial frontier score Time Cost processes index City (Country) Rank (0–100) (days) (% of claim) (0–18) Coimbra (Portugal) 1 74.60 510 17.2 13.5 Osijek (Croatia) 2 74.24 510 15.7 13.0 Braga (Portugal) 3 73.78 540 17.2 13.5 Evora (Portugal) 4 73.23 560 17.2 13.5 Funchal (Portugal) 5 72.82 575 17.2 13.5 Ponta Delgada (Portugal) 5 72.82 575 17.2 13.5 Faro (Portugal) 7 72.28 595 17.2 13.5 Porto (Portugal) 8 71.32 630 17.2 13.5 Zagreb (Croatia) 9 70.60 650 15.2 13.0 Kosice (Slovakia) 10 69.95 635 20.5 13.5 Presov (Slovakia) 11 69.81 640 20.5 13.5 Varazdin (Croatia) 12 69.49 685 15.6 13.0 Lisbon (Portugal) 13 67.91 755 17.2 13.5 Trnava (Slovakia) 14 67.90 710 20.5 13.5 Zilina (Slovakia) 15 67.08 740 20.5 13.5 Bratislava (Slovakia) 16 66.12 775 20.5 13.5 Rijeka (Croatia) 17 65.67 825 15.6 13.0 Split (Croatia) 18 65.56 837 15.0 13.0 Prague (Czech Republic) 19 56.38 678 33.8 9.5 Plzen (Czech Republic) 20 56.32 680 33.8 9.5 Ostrava (Czech Republic) 21 56.05 690 33.8 9.5 Olomouc (Czech Republic) 22 55.64 705 33.8 9.5 Usti nad Labem (Czech Republic) 23 54.96 730 33.8 9.5 Liberec (Czech Republic) 24 53.86 770 33.8 9.5 Brno (Czech Republic) 25 51.95 840 33.8 9.5 Source: Doing Business database. Note: Rankings are based on the average distance to frontier score for the time and cost associated with enforcing a contract as well as for the quality of judicial processes index. The distance to frontier score is normalized to range from 0 to 100, with 100 representing the frontier of best practices (the higher the score, the better). For more details, see the chapter “About Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia.” The data for Bratislava, Lisbon and Prague have been revised since the publication of Doing Business 2018. The complete data set can be found on the Doing Business website at http://www.doingbusiness.org. ENFORCING CONTRACTS 73 Osijek is a standout in Croatia; the next states, enforcing a contract takes the least The seven Czech cities rank below the most competitive city, Zagreb, has a time in Luxembourg, just over 10 months. EU average, reflecting longer delays ranking of 9 among the 25 cities. Among during the trial stage and higher up-front all 25 cities, Osijek and Coimbra have The five Croatian cities show the greatest enforcement costs. Prague leads the the fastest courts. Enforcing a contract is variation in performance. While Osijek is pack despite having some of the busiest most difficult in Brno (Czech Republic), at number 2 in the ranking of the 25 cities, district courts in the country. The cost as a result of delays in trial as well as rela- Split is at 18. The difference is due mainly to enforce a contract is the same across tively high enforcement costs. Most of to the longer time for the trial phase the Czech Republic—and substantially the 25 cities outperform the EU average in Split. All five of the Croatian cities higher than the EU average. The Czech on cost and quality, though all but a few outperform the EU average on cost and cities also have identical scores on the lag behind in speed (figure 6.1). the quality of judicial processes, while quality of judicial processes index. Their Osijek outperforms the EU average on scores are the lowest among the 25 Speed is also where the biggest differ- time. Indeed, if Croatia (as represented benchmarked cities, 4 points lower than ences emerge among locations. In Brno it by Zagreb) were to match the best per- those of the Portuguese and Slovak cit- takes 28 months to resolve a commercial formances observed among the five cities ies and almost 2 points lower than the dispute. The process takes 40% less time on time and cost, it would move up in the EU average (11.2). There is much room in Coimbra and Osijek, similar to the time Doing Business global ranking on the ease for improvement in the cost to enforce it takes in Spain. Among EU member of enforcing contracts from 23 to 11. a contract. If the Czech Republic (as FIGURE 6.1  All cities in Croatia, Portugal and Slovakia outperform the EU average on cost and quality for enforcing contracts Time (days) 850 Brno Split Rijeka 800 Liberec Bratislava 750 Lisbon Zilina Usti nad Labem Olomouc Trnava 700 Ostrava Varazdin Plzen Prague Presov 650 Zagreb Kosice EU average Porto 600 Faro Funchal, Ponta Delgada Evora 550 Braga Osijek Coimbra 500 450 400 Lithuania (EU best) 350 300 8 9 10 11 12 13 14 15 16 17 18 Quality of judicial processes index (0–18) Cost (% of claim) Croatian city 15.0 Czech city 20.0 Portuguese city 25.0 Slovak city 30.5 Source: Doing Business database. Note: The averages for the EU are based on economy-level data for the 28 EU member states. 74 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA represented by Prague) were to improve Filing and service is done almost entirely on the electronic its performance on cost to match the EU The filing and service phase takes on case management system CITIUS. The average, it would move up more than 25 average 65 days in Slovakia and 78 in summons is prepared within two to three places in the global ranking on the ease of the Czech Republic. In both countries days, and completing service of process enforcing contracts—to number 61. the complaint can be filed and served by mail takes two weeks on average. electronically. But this does not necessar- Coimbra—the best performing among ily speed up the process, because clerks Trial and judgment the 25 benchmarked cities—has the low and judges take the same amount of time Three Croatian cities stand out in a com- enforcement cost and the high score on to scrutinize a complaint whether it is parison of the time for trial: going through the quality of judicial processes index found presented on paper or electronically. And trial, from service to judgment, takes 8.5 in the other Portuguese cities, as well as while delivering the summons electroni- months on average in Varazdin, 9.3 in relatively fast trials. In Lisbon, which has cally takes less time than using the postal Osijek and 10 in Rijeka. Litigants point the greatest number and complexity of service, the electronic service requires to light caseloads and smaller backlogs, cases among the Portuguese cities, resolv- acknowledgment to be complete. The especially in Osijek and Varazdin. Indeed, ing a commercial dispute takes nearly 50% defendant has, and usually takes, 10 backlogs at the Osijek commercial court longer than in Coimbra. If Portugal (as days in Slovakia and 15 days in the Czech are only slightly more than half those in represented by Lisbon) matched the best Republic to acknowledge receipt. The Split or Zagreb. The commercial court in performance among its eight benchmarked main differences in time within these two Osijek has a workload similar to that of cities on time, it too would improve its countries occur during the internal pro- its counterparts in the other Croatian cit- global ranking—moving up to the top 15. cessing of the complaint within the court ies, and a staffing level that is no higher. system. In the Czech Republic the overall More efficient internal processing could The five Slovak cities stand out for their filing and service phase takes 60 days in explain its speediness. Another factor low enforcement costs and for their high Brno but a month longer in Liberec and could be that Osijek has a less dynamic scores on the quality of judicial processes Ostrava. Among the cities benchmarked economy, which could translate into less index—more than 2 points higher than in Slovakia, Kosice has the fastest courts, complex cases. In Varazdin, because the the EU average. But none of the cities taking 55 days, while those in Bratislava, trial phase begins only when the court surpasses the EU average on the time to Trnava and Zilina take two weeks longer.12 has set aside the time, hearings are resolve a commercial dispute. Among the streamlined. Croatia’s overall average on Slovak cities, Kosice is the only one rank- Among the five Croatian cities the average the time for this phase—based on all five ing in the top 10 among the 25 bench- time for filing and service exceeds the EU of its benchmarked cities—is the shortest marked cities. Meanwhile, Bratislava lags average (40 days) by more than 50%. The among the four countries (figure 6.2). 6 places behind because of its longer complaint is handled first by the clerk, then One reason might be that judges may pri- trial times. If Slovakia (as represented by by the judge who scrutinizes the complaint, oritize simpler commercial cases, which Bratislava) attained the best performance and then by the clerk again, for mailing. are typically resolved much faster than among its five benchmarked cities on Efficiency issues in the internal processing other cases also heard at the commercial time, it would move up in the global rank- at this stage are often blamed for delays. courts, such as bankruptcy proceedings. ing to a place among the top 30. Among the five cities, Varazdin is a special case. The filing and service phase in that The Czech cities have the longest aver- How do time measures vary? city takes more than four months. Judges in age time for the trial phase; at nearly 17 The time to enforce a contract is mea- Varazdin do not order service of nonurgent months, it is almost 2 months longer than sured throughout three phases. The cases until they have space in their calen- the EU average. Prague courts, despite first, filing and service, encompasses the dar for the trial to take place. But delays in being located in the country’s largest time for having the complaint drafted the filing and service phase are offset by business city, are the exception. They by the plaintiff’s attorney, filed with the shorter trial times, since trials happen only resolve cases six weeks faster than the court and successfully served on the when the court is ready and has time avail- other Czech cities on average. Judges defendant. The time for trial and judg- able to hear the case. credit close collaboration with the ment is the average time required from Ministry of Justice to address inefficien- the moment of successful service of the The Portuguese cities, where the filing cies. Measures include hiring and training complaint until the time to appeal the and service phase takes 30 days, are the more judicial assistants, who now take first-instance judgment has elapsed. The only ones among the 25 that beat the EU on a broad range of responsibilities, time for enforcement covers all the time average. Complaints are processed effi- easing the burden on judges. The trial required to enforce the judgment, until ciently within the courts. Electronic filing phase takes the longest in Brno, at 20 the creditor is paid. is mandatory, and the internal processing months—6 months longer than in Prague. ENFORCING CONTRACTS 75 FIGURE 6.2  Only 7 of the 25 cities surpass the EU average on the time to enforce a contract EU average Coimbra (Portugal) Osijek (Croatia) Braga (Portugal) Evora (Portugal) Funchal (Portugal) Ponta Delgada (Portugal) Faro (Portugal) Porto (Portugal) Kosice (Slovakia) Presov (Slovakia) Zagreb (Croatia) Prague (Czech Republic) Plzen (Czech Republic) Varazdin (Croatia) Ostrava (Czech Republic) Olomouc (Czech Republic) Trnava (Slovakia) Usti nad Labem (Czech Republic) Zilina (Slovakia) Lisbon (Portugal) Liberec (Czech Republic) Bratislava (Slovakia) Rijeka (Croatia) Split (Croatia) Brno (Czech Republic) 0 100 200 300 400 500 600 700 800 900 Time to enforce a contract (days) Filing and service Trial and judgment Enforcement of judgment Sources: Doing Business database; Note: The average for the EU is based on economy-level data for the 28 EU member states. Brno courts tend to have more hearings Among the Slovak cities, Kosice and time on average across the Czech to resolve the same case as well as longer Presov have the shortest times for Republic and Slovakia (about 5 months) intervals between hearings. the trial phase, just over 15 months. and around a month longer on average In Bratislava courts take more than 2 in Portugal. Croatia stands out for two Among the Portuguese cities, Coimbra months longer on average. From the time reasons: for having the longest aver- has the shortest trial phase, taking just of service it can take 6 months or more age time (more than 10 months) to 10 months. Judges and litigants cited to obtain a hearing date in the Bratislava go through enforcement proceedings manageable caseloads, small backlogs courts. Appointing experts and receiv- and for showing the greatest variation and less complex cases as reasons ing their testimony takes 4–5 months among cities on this time measure. In for the greater speed. A culture of in Bratislava, Trnava and Zilina but only Osijek enforcement takes just over 6 efficiency prevails among judges, clerks 2 months in Kosice. In Bratislava judges months, while in Rijeka it takes nearly 10 and lawyers. The slowest courts among are not the only ones who may feel over- months more—the most time among the the cities benchmarked in Portugal are whelmed by the number of cases; higher 25 cities. Enforcement agents in Croatia in its largest business centers: Porto judicial clerks also have a large burden. have little autonomy in carrying out the and Lisbon. The metropolitan areas of Judges in Bratislava reported having two process, often having to request the these two cities are home to more than to three clerks per judge, while those in court’s permission to undertake steps in half the country’s population. In Porto Kosice reported having two per judge. the proceedings. In Rijeka enforcement courts take 14 months to complete agents tend to rely even more on the the trial phase; in Lisbon they take just Enforcement of judgment court’s advice, requesting guidance from over 18 months. Particularly for Lisbon, When it comes to enforcement of the the judge when they encounter difficul- litigants noted that court congestion and judgment, only 5 of the 25 cities beat ties in the enforcement process. Internal backlogs are higher than in the other or match the EU average for time. processing of new enforcement cases benchmarked cities. Enforcement takes roughly the same within the Rijeka municipal court adds to 76 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA delays. Resolving pending enforcement and there is a sole creditor, as in the Doing in 2017.17 Before the reform, enforcement cases is a priority, with new ones pushed Business case study.15 Most enforcement cases were overseen by the district court to the back of the queue. Just to start the agents cited court involvement as the in the appropriate territorial jurisdiction. identification of assets to be seized can most important factor in delays and in Enforcement times varied significantly take 6 months. potential variations in enforcement time because they depended in part on the across cities. Creditors file their request speed of the court, with Bratislava being In Croatia creditors need a certification of for enforcement electronically through the slowest. Since creditors chose the judgment before they can begin enforce- CITIUS and ask for the appointment of bailiff, large creditors created “super ment proceedings. To start the proceed- an enforcement agent of their choice.16 bailiffs” that handled the lion’s share of ings, the municipal court scrutinizes the Enforcement agents search for assets enforcement proceedings in the coun- enforcement proposal and then orders through the electronic platform SISAAE try. Now all enforcement requests are the enforcement, which is undertaken by (box 6.1). Information on assets is filed electronically at the district court a public enforcement agent.13 To search available immediately except for bank of Banska Bystrica, which assigns the for assets, enforcement agents can account information, which may take two bailiff randomly according to territory. All access only public registries (such as days. If enforcement agents are unable to enforcement cases involving a particular land or company registries) or informa- locate registered assets, they will seize debtor are assigned to the same enforce- tion in the court’s case management movable assets and sell them on the ment agent, with the aim of increasing system. All other types of information electronic auction site e-leilões.pt. While efficiency. on debtor assets can be accessed only enforcement agents all have the same through specific requests made to the tools at their disposal, they reported that While it is too early to tell whether the agency holding such information.14 Once the electronic search function for immov- reform will produce the desired outcome, assets are seized, the enforcement agent able assets through SISAAE is not always litigants have expressed skepticism. must return to the court for authorization available in Funchal and Ponta Delgada Many of the largest creditors, such to auction the assets. Only one auction because of technical glitches, leading to as mobile phone operators, were not is conducted in an enforcement case, a need to make an offline request (or an fully utilizing the system in 2017, raising regardless of whether the assets are sold in-person visit). concern about how the system will cope or not. when they do. Today differences of up to Among the seven Czech cities, enforce- two months can be observed across the Among the four countries, Portugal has ment is fastest in Olomouc and Ostrava, country. While enforcement takes just the most homogeneous enforcement at four months, and slowest in Brno over four months in Kosice and Presov, it process, taking six months in all eight cit- and Prague, at six months. To start the takes six months in Bratislava and Zilina. ies benchmarked. This is not surprising. enforcement, creditors go directly to the Enforcement officers in Portugal have a enforcement agent of their choice, who What are the main drivers of centralized case management system, a must request a mandate from the court cost? centralized asset search platform (with to commence proceedings. Enforcement Among the four countries, Croatia has information on a vast amount of assets agents search individual databases for the lowest cost to enforce a contract, at in the country) and no limitations on assets and can conduct the auction either 15.4% of the claim amount on average territorial jurisdiction within the country. online, through the portal of the Chamber (based on the case study claim, the cost Litigants reported that enforcement of Bailiffs (http://www.portaldrazeb. amounts to HRK 24,198, or EUR 3,253). agents work efficiently. The agents dedi- cz), or in person. Lawyers in the Czech Following closely behind is Portugal, with cate about a third of the total time on an Republic reported that bailiffs collaborate 17.2% (EUR 5,834). And in Slovakia the enforcement case just to trying to sell closely with creditors in carrying out average cost is 20.5% (EUR 5,762). All movable assets that have been seized, enforcement proceedings. Moreover, the three countries have a lower cost than which are generally considered to have a fee for the process, which is proportional the EU average thanks to low up-front low market value. to the amount of the claim (CZK 801,410, enforcement costs and, in Croatia and or about EUR 31,588, in the Doing Business Portugal, low attorney costs. The Czech Enforcement agents in Portugal have case study), provides an important incen- Republic stands out for high enforcement substantial autonomy in conducting tive for enforcement agents to complete costs, which account for nearly half the enforcement proceedings. The court the proceedings. total cost of 33.8% (CZK 270,877, or EUR becomes involved only when major 10,677) of the claim amount on average. objections are raised by the parties or by Meanwhile, Slovakia is seeking to improve Ranked by total cost, the Czech Republic third parties, which rarely happens when the efficiency of the enforcement process, is second only to the United Kingdom enforcement is against movable assets through reform measures that took effect among EU member states. ENFORCING CONTRACTS 77 BOX 6.1 A new era for the enforcement function in Portugal After the enforcement function in Portugal was privatized in 2003, enforcement agents faced growing criticism. Critics argued that the profession lacked sufficient oversight and had weak professional standards. And they questioned the compensation structure for agents, saying that it provided poor incentives for pursuing collection efforts.a Turning things around took a concerted effort. One milestone was the introduction in 2013 of a law linking enforcement fees to the amount of debt recovery and requiring the central bank to allow enforcement agents electronic access to bank account information. While the law increased oversight, it also gave enforcement agents more autonomy. They are now able to act more independently, with court intervention required only when important legal issues arise during enforcement proceedings. The Solicitadores and Enforcement Agents National Association (OSAE) played a key part not only in implementing the reforms but also in developing tools to support the functions of enforcement agents. The organization managed thousands of hopeless cases pending with agents who had been paid under the old system and therefore lacked incentive to continue with enforce- ment. It also began developing sophisticated online platforms such as SISAAE, PEPEX and e-leilões.pt. SISAAE (Sistema Informático de Suporte à Atividade dos Agentes de Execução) allows enforcement agents to search for and seize assets through a single platform connecting more than 20 databases—including the land registry, stock exchange, vehicle registry, commercial registry, social security, and tax and customs administration.b Since 2013 it has also connected to the central bank’s database, allowing the search and seizure of bank account balances. Since September 2013 more than 300,000 account balances have been seized, for a total of EUR 1 billion.c SISAAE is available 24/7 and allows searches throughout the country. PEPEX (Procedimentos Extrajudiciais Pré-Executivos) allows creditors to request that an enforcement agent search the SISAAE database (for a fee) before starting judicial enforcement.d Once the search is completed, creditors can decide to go through with judicial enforcement without having to pay the enforcement agent the search fee again. They can also choose not to pursue the case, request a value added tax credit and pass the credit to their loss column.e Among the association’s most recent initiatives is e-leilões.pt, an electronic auction site where enforcement agents can sell mov- able and immovable assets during enforcement proceedings. Since April 2016 the site has conducted more than 11,000 auctions and sold more than 5,000 goods. Low costs and a user-friendly interface make it attractive to both creditors and buyers. Soon the site will also sell assets confiscated in criminal proceedings. a. Sebastiaan Pompe and Wolfgang Bergthaler, “Reforming the Legal and Institutional Framework for the Enforcement of Civil and Commercial Claims in Portugal,” IMF Working Paper 15/279 (International Monetary Fund, Washington, DC, 2015), https://www.imf.org/en/Publications/WP/Issues/2016 /12/31/Reforming-the-Legal-and-Institutional-Framework-for-the-Enforcement-of-Civil-and-Commercial-43497. b. ENABLE Project, “Enabling Dematerialised Access to Information and Assets for Judicial Enforcement of Claims in the EU: National Report, Portugal,” http://access2just.eu/wp-content/uploads/2018/01/National-report_PORTUGAL.pdf. c. “Penhoras de contas bancárias ultrapassam mil milhões,” Jornal de Notícias, March 18, 2018, https://www.jn.pt/economia/interior/penhoras-de-contas-bancarias-ultrapassam-mil-milhoes-9181868.html. d. Only enforcement agents have access to PEPEX. e. “Statistics on the Results of the Recent Change in Law—SISAAE,” presentation by the Solicitadoress and Enforcement Agents National Association at the 17th National Meeting of the Portuguese Association of Judicial Administrators (APAJ), Anadia, Portugal, January 31, 2015. Attorney fees as a share of the claim there is a fee schedule, attorneys tend to though they do not account for signifi- value range from 8% in Split (Croatia) to deviate slightly from it to accommodate cant differences within countries. Filing 14% in all five Slovak cities. All the cities the economic realities of each market. In fees, which are calculated on the basis benchmarked in Croatia and Portugal Split market conditions make it difficult of the value of the claim, can range from have lower attorney fees than the EU for lawyers to charge the higher fees 1.8% of the claim value in Portugal to average of 12.4%. In the Czech Republic observed in all the other cities bench- more than twice that in Slovakia, at 5.8% and Slovakia fees are the same across marked (8.6%). Meanwhile, the higher of the claim value.18 Filing fees do not vary cities; in both, attorneys reported that cost of living in Zagreb may explain the from city to city within these countries they prefer to apply the fee schedule for fees both in that city and in Varazdin, because they are nationally regulated. most cases. In Portugal, while there is no which is a short drive away. fee schedule, differences among cities Expert fees are regulated in all four coun- are mostly imperceptible to litigation Except in the Czech Republic, attorney tries. Except in Croatia, the fee regulations lawyers, many of whom work in more fees and the expenses incurred dur- are applied mostly consistently within than one city. In Croatia, even though ing trial are the biggest drivers of cost, each country, so expert fees do not vary 78 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA from city to city. In Croatia lawyers noted across cities. With respect to court struc- FIGURE 6.3  In the Czech cities costs for that the regulations were applied but ture and proceedings, all four countries the enforcement phase make up nearly could often accommodate small varia- have rules regulating pretrial attachment half the total cost to enforce a contract tions reflecting the availability of experts and use an automated approach for in a city—fees can range from 1.6% to assigning cases, but only Croatia has Slovakia <1% 2.1% of the claim amount. Expert fees specialized commercial courts.20 For case Portugal 3% typically amount to 0.6% of the claim management Portugal earns the highest Croatia value in Slovakia and 0.7% in the Czech score, obtaining 5 of the 6 possible points. Czech Republic Republic. They are highest in Portugal, at Only Croatia and Portugal have legal time up to 4.2% of the claim value; this, along standards for at least three key events. with filing fees, makes court costs in this The least regulated area is adjourn- 17% country comparatively higher than the EU ments. The Czech Republic, Portugal and average of 5% of the claim. Slovakia do not explicitly regulate the Average cost for the enforcement maximum number of adjournments or phase as a share of the total cost to enforce a contract The average up-front costs to enforce a specify that they must be granted only judgment are low in Croatia, Portugal for unforeseen and exceptional events. and Slovakia. Indeed, creditors advance Croatia stipulates that adjournments less than 1% of the claim amount to start should be granted only for unforeseen enforcement proceedings in Slovakia and exceptional events but does not set (0.1%) and Portugal (0.5%), representing a limit on the number of adjournments. 44% only a very small share of the total cost to Portugal and Slovakia both have an enforce a contract. In the Czech Republic, electronic case management system that Source: Doing Business database. however, creditors might need to advance offers a wide array of features to judges Note: The average for each country is based on data for its benchmarked cities. Only up-front enforcement 150 times as much as in Slovakia: bailiffs and litigants. By contrast, Croatia has a costs (not total enforcement costs) are taken into can request an up-front payment of 15% system providing only limited features for account. of the claim amount, nearly half the total judges and litigants. cost to enforce a contract (figure 6.3).19 the Czech Republic and Slovakia. In the In all four countries the fees are set by With respect to court automation, all Czech Republic electronic service of pro- national regulation and therefore do not four countries allow online payment of cess has been mandatory for companies vary among cities. court fees and all except Croatia allow since 2009, and in Slovakia it became electronic filing of complaints—though mandatory on July 1, 2017. Both Croatia What judicial good practices are Croatia plans to roll out electronic filing and Slovakia publish all commercial judg- used? soon (box 6.2). In Portugal electronic ments online, while Portugal does so only Portugal and Slovakia have adopted the filing has been mandatory for complaints for supreme court and appellate-level most judicial good practices as captured since 2013.21 Electronic service of pro- decisions. The Czech Republic does not by the quality of judicial processes index, cess was recently introduced in both publish decisions at all. followed closely by Croatia (figure 6.4). Portugal and Slovakia both have an FIGURE 6.4  Of the four countries, Portugal and Slovakia have the most judicial good average score on the index of 13.5, and practices Croatia a score of 13—all exceeding the Court structure Case Court Alternative EU average of 11.2 points. The Czech and proceedings management automation dispute resolution Republic’s average score of 9.5 mainly (0–5 points) (0–6 points) (0–4 points) (0–3 points) reflects the lack of a specialized small Portugal claims court or fast-track procedure, the (13.5 of 18 points) limited features available for lawyers in Slovakia the courts’ electronic case management (13.5 of 18 points) system, the unavailability of a complete Croatia (13 of 18 points) set of judicial decisions online and the Czech Republic lack of comprehensive regulation on (9.5 of 18 points) EU average EU average EU average EU average voluntary mediation. Source: Doing Business database. The scoring on judicial good practices in Note: The figure shows the extent to which each country has adopted the judicial good practices captured by the all four countries shows no differences quality of judicial processes index (each square represents a point in the index). For more details, see the data notes. ENFORCING CONTRACTS 79 BOX 6.2 Electronic filing to be rolled out to all Croatian courts The Croatian Ministry of Justice began piloting the electronic filing of complaints and other documents in the commercial court in Bjelovar in December 2017. Subsequently, in January–April 2018, it rolled out the pilot to the commercial courts in Pazin, Varazdin, Zagreb and Rijeka. Participation has been voluntary for lawyers. The Ministry of Justice expects to complete the rollout of electronic filing to all commercial courts by the summer of 2018 and to all municipal courts in 2019. Having the initial pilot in the Bjelovar court allowed an opportunity to address early problems without creating widespread disruption in the court system. Measures are being taken to increase the take-up of electronic filing with a view to making it mandatory. Filing fees will be re- duced for electronic filing, and all lawyers will have to obtain an electronic signature allowing them to access the system. Source: Interviews by the Doing Business team with staff of the Ministry of Justice of Croatia. All four countries regulate commer- (prereform) enforcement cases on their working hours, helped improve clearance cial arbitration and permit voluntary docket. Portugal faced special challenges rates. Ostrava has also increased the mediation. The Czech Republic is the with the financial crisis. It entered the number of support staff, and every judge only country among the four that lacks crisis with a substantial backlog, but now has a court clerk. comprehensive regulation governing through an overhaul of its justice system voluntary mediation. And Slovakia is the the country has managed to reduce the Despite these improvements, efforts only one that excludes certain matters number of pending enforcement cases by to reduce backlogs need to continue. from arbitration and where in practice more than 40% since the peak in 2012.22 Measures should include an analysis arbitration clauses in contracts are not of the nature and volume of pending consistently respected by national courts. In Croatian courts the clearance rates for cases, which in turn requires having an first-instance civil and commercial litiga- up-to-date case management system. tion cases have continually improved, A review of existing resources, includ- WHAT CAN BE IMPROVED? reaching 113% in 2014, above the ing a potential redistribution of court European average of 100%.23 But much staff to address unbalanced workloads, This chapter’s review of the process for remains to be done. According to the could also be explored. And in Slovakia enforcing contracts in Croatia, the Czech 2018 EU Justice Scoreboard, Croatia has a study has identified appointing court Republic, Portugal and Slovakia points to the third largest number of pending civil managers or providing court presidents several areas of possible improvement. and commercial litigation cases in the with extensive management training as EU, after Cyprus and Italy. The problem a potentially effective way to improve Continue to assess internal is especially evident in the municipal internal processing within courts.25 court procedures with a view to courts.24 In the commercial courts around reducing trial time and backlogs 15% of cases are more than three years Promote alternative dispute CROATIA, CZECH REPUBLIC, old. But in the municipal courts, which resolution PORTUGAL, SLOVAKIA handle enforcement cases, about 25% of CROATIA, CZECH REPUBLIC, In most of the 25 cities benchmarked, all cases—almost 64,000 in total—are PORTUGAL, SLOVAKIA completing the trial phase for a simple more than three years old. All four countries have comprehensive commercial dispute takes a year or regulation on arbitration and mediation, more. All four countries face issues with In Czech courts, which have the longest but these options are not commonly backlogs, which undermine a court’s per- average trial times measured among the used by litigants. In Slovakia there are formance and prevent it from dealing effi- four countries, judges reported a substan- limitations on the types of cases that can ciently with incoming cases. And all four tial effort to get rid of backlogs in recent be brought to arbitration, excluding cases are making efforts to resolve these issues. years. With support from the Ministry of relating to real estate, for example.26 And Slovakia has introduced a host of reforms Justice and under the leadership of the arbitration clauses are rarely enforced by aimed at improving court efficiency, from court president, judges in Ostrava have the Slovak courts. a new procedure code to a centralized reportedly reduced their pending cases court for payment order proceedings significantly in the past three years, from Nor are financial incentives to use arbitra- and enforcement. But reforms have been up to 800 cases per judge to about 200. tion readily available. In Slovakia parties slow to show results, and the courts are Strict monitoring of cases more than that successfully mediate a case can have still dealing with large numbers of old three years old, along with an increase in their filing fees partially reimbursed. But 80 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA in the other three countries there are no exceptional cases. When an adjournment not exceed HRK 50,000 (about EUR specific incentives to encourage the use is granted, the party responsible is usu- 6,700).34 But the procedure lacks some of mediation. ally ordered to pay the additional costs “fast track” qualities. For example, the incurred by the other party.33 same rules as for the ordinary procedure Studies in Latin America and the United apply to the taking of evidence and the States indicate that alternative dispute In parallel with setting limits on adjourn- content of the ruling.35 In the Czech resolution can help increase court effi- ments, it is also important to review Republic there are no small claims courts ciency—by reducing the number of cases judicial capacity, case management and or procedures. The courts apply the same that would otherwise have to go through infrastructure issues. Judges burdened by procedure whether a claim is worth EUR the courts and thus lessening caseloads a large volume of cases may be inclined 1,000 or EUR 1 million. and backlogs; by streamlining trials; and to grant adjournments; in the absence of by reducing costs.27 Even partial settle- effective management techniques or an Several countries have introduced more ments that work to narrow the disputed automated case management system, flexible and relaxed rules for small claims. issues help to streamline trials, reducing for example, adjournments may seem In Estonia, Slovenia and the United both the length of trials and the associ- an attractive method for managing their Kingdom the formal requirements for ated costs.28 caseload. taking evidence can be set aside. For example, the court can hear a witness or Set legal limits on the granting Thus in addressing the issue of adjourn- expert by phone or in writing or recognize of adjournments ments, courts should monitor the average other means of proof as evidence (for CROATIA, CZECH REPUBLIC, and median number of each type of case example, statements not given under PORTUGAL, SLOVAKIA as well as the reasons for adjournments. oath). And some countries have restric- Part of good case management is estab- Court management can then take steps tions on expert witnesses, for example, lishing, in consultation with the parties, a to reduce the number of adjournments on the number of expert witnesses who clear, reasonable and realistic timeline for over time and tackle the most common can be heard in a case. In Austria, Ireland a case as well as clear rules limiting the reasons for them. Simply introducing and Slovenia the formal requirements for use of adjournments. Timelines quickly this monitoring practice can help instill the judgment itself are simpler and more become meaningless without rules to a culture of predictability for hearings, flexible, and judges can omit the descrip- enforce them. In 1984 the Committee of improving timeliness and reducing the tion of the facts from their judgment. To Ministers of the Council of Europe advised frustrations experienced by judges, court prevent strain on judicial resources, many against having more than two hearings staff and court users alike. countries limit appeals for smaller claims. (preparatory and trial hearings). It also rec- In France, Hungary and Poland there is ommended that no adjournment should Improve or introduce fast-track no right of appeal. In Denmark the right be granted save when “new facts appear procedures for small claims to appeal depends on the value of the or in other exceptional and important CROATIA, CZECH REPUBLIC claim.36 circumstances.”29 Only eight EU member Resolving a commercial dispute can be states impose limitations on adjourn- costly and time consuming for small and ments that are respected in practice.30 All micro businesses. One way to help is to eight of them, including Croatia, focus on introduce small claims courts or small limiting the adjournments to unforeseen claims procedures. These help expedite and exceptional circumstances rather the resolution of minor disputes of than on limiting the total number that can relatively low value by setting aside many be granted.31 The Czech Republic, Portugal legal formalities and using simplified or and Slovakia impose neither of these types fast-track procedures. Simpler processes of limits on adjournments.32 and more relaxed rules lower costs for claimants, who may be able to file and In Latvia the Riga Central Court cannot present their own case before the court postpone a hearing without first setting without legal representation. In addition, a new hearing date. In the Swiss judicial since there is less work involved for the district of Dorneck-Thierstein extensions courts, filing fees can be lower and judges are generally granted no more than twice. can issue decisions more quickly. In New South Wales, Australia, the Civil Procedures Act allows the adjournment Croatia has a specialized procedure of proceedings to a “specified day” only in for small commercial claims that do ENFORCING CONTRACTS 81 8. A commercial claim with a claim value of HRK monetary-claims-lessons-from-Eastern-and- NOTES 157,128 (EUR 21,124) in Croatia, CZK 801,410 Central-Europe. (EUR 31,589) in the Czech Republic, EUR 15. In Portugal the enforcement division sits in 33,921 in Portugal and EUR 28,108 in Slovakia, the same jurisdictional subdivision (comarca 1. Data cover the overall number of pending which is equivalent to twice the income per judicial) but not necessarily in the same cases from 1991 to 2009, which includes capita for each country. (For more details, see city. For example, the enforcement division in-court civil, commercial, criminal and labor the data notes.) competent to hear enforcement matters for cases and postcourt enforcement cases. In 9. In Portugal a public enforcement officer judgments issued in the Coimbra courts is 2007 and 2008 the clearance rate (completed (funcionário judicial) could conduct the one in Soure, and for Braga it is the one in cases as a percentage of new cases within a enforcement proceedings for a person eligible Famalicão. period) surpassed 100%. Data are from the for legal aid or in the narrow circumstances 16. This is done by the creditor’s lawyer, since Ministry of Justice of Portugal, as published in set out by article 722 of the Portuguese Civil access to CITIUS is restricted. Sebastiaan Pompe and Wolfgang Bergthaler, Procedure Code. 17. Ministry of Justice Decree 68/2017 Coll., “Reforming the Legal and Institutional 10. In Slovakia all enforcement cases presented went into effect on April 1, 2017. It introduces Framework for the Enforcement of Civil and since April 1, 2017, go to the specialized amendments to Act 233/1995 Coll. Bailiffs Commercial Claims in Portugal,” IMF Working district court of Banska Bystrica. Pending Code. Paper 15/279 (International Monetary Fund, cases are still seen by the city district court 18. Fees are calculated on a sliding scale in Washington, DC, 2015), https:/ /www.imf.org that issued the judgment serving as the Portugal. For a case valued between EUR /en/Publications/WP/Issues/2016/12/31 enforcement title. See Act 233/1995 Coll. 30,000 and EUR 40,000 the filing fee (taxa /Reforming-the-Legal-and-Institutional Bailiffs Code, as amended, in force as of April judicial) is the equivalent of six units (unidades -Framework-for-the-Enforcement-of-Civil 1, 2017. de conta); for both 2017 and 2018 the unit was -and-Commercial-43497. 11. These are Osijek and Zagreb in Croatia; and fixed at EUR 102. Ministry of Justice Decree- 2. According to a memorandum of Braga, Coimbra, Evora, Faro, Funchal, Ponta Law 34/2008 of February 26, 2008, on the understanding on financial assistance to Delgada and Porto in Portugal. According to Regulation of Court Costs. Portugal to cope with the financial crisis, the global rankings in Doing Business 2018, 19. In practice, however, the enforcement agent signed in May 2011 by the government of Lithuania—the best EU performer—is number does not always demand up-front payment. Portugal and by the European Commission (on 4 (with a distance to frontier score of 78.80) 20. Portugal has specialized commercial divisions behalf of the Eurogroup, the European Central and the Republic of Korea number 1 (with a within its first-instance courts (juízo de Bank and the International Monetary Fund). distance to frontier score of 84.15). comércio), but these divisions do not have 3. See also João Paulo Dias, “The Transition to 12. Cases from across Slovakia that start as a jurisdiction over general commercial disputes. a Democratic Portuguese Judicial System: request for payment order procedure can be The commercial divisions focus on the (Delaying) Changes in the Legal Culture,” filed electronically at the specialized district insolvency and winding up of companies, the International Journal of Law in Context 12, no. 1 court of Banska Bystrica, which will issue the exercise of shareholder rights, issues relating (2016): 24–41, available at https:/ /estudogeral payment order and serve it electronically. But to companies’ articles of incorporation, .sib.uc.pt/jspui/bitstream/10316/33099/1 not all requests for payment orders are being company suspension and dissolution, /The%20transition%20to%20a%20 presented to this court. Plaintiffs can also and industrial property matters. For more democratic%20Portuguese%20judicial%20 choose to file directly at their local district details, see article 128 of Law 62/2013 of system%20%28delaying%29%20 court. For the purposes of comparisons by city, August 26, 2013, on the Organization of changes%20in%20the%20legal%20 this chapter measures the time for the process the Judicial System (Lei de Organização do culture.pdf; and Pedro Miguel Alves Ribeiro in the local district courts. Sistema Judiciário). In Slovakia court dockets Correia and Susana Antas Videira, “Troika’s 13. In Croatia enforcement actions against (“agendas”) are organized by type of case, but Portuguese Ministry of Justice Experiment: monetary assets (in bank accounts) are judges who hear commercial cases sometimes An Empirical Study on the Success Story of executed by the Financial Agency (FINA), also hear other civil cases. the Civil Enforcement Actions,” International a state-owned company that specializes in 21. See Civil Procedure Code 2013 and Decree Journal for Court Administration 7, no. 1 (2015): processing payments and providing other 280/2013 of August 26, 2013, on Electronic 37–49. financial services. In practice, this means that Processing of Judicial Proceedings. 4. Directorate-General for Justice Policy (DGPJ) the creditor can submit an enforceable title to 22. Directorate-General for Justice Policy (DGPJ) of Portugal, “Ministério da Justiça: Estatísticas FINA and carry out enforcement against the of Portugal, “Ministério da Justiça: Estatísticas sobre Ações Executivas Cíveis” (2017). debtor’s accounts in any bank in Croatia. For sobre Ações Executivas Cíveis” (2017). 5. European Commission for the Efficiency of the purposes of the case study, which looks at 23. CEPEJ, “European Judicial Systems: Efficiency Justice (CEPEJ), “Efficiency and Quality of enforcement against movable (nonmonetary) and Quality of Justice,” CEPEJ Studies, no. 23 the Slovak Judicial System: Assessment and assets, this chapter focuses on court officers (CEPEJ, Strasbourg, 2016). Recommendations on the Basis of CEPEJ as enforcement agents. See Svetozara Petkova 24. European Commission, Directorate-General Tools,” CEPEJ-COOP (2017)14 (CEPEJ, and Georgia Harley, “Towards Effective for Justice and Consumers, The 2018 EU Strasbourg, 2017), https:/ /rm.coe.int/slovakia Enforcement of Uncontested Monetary Justice Scoreboard (Luxembourg: Publications -assessment-report-on-efficiency-and Claims: Lessons from Eastern and Central Office of the European Union, 2018), https:/ / -quality-of-the-slovak-jud/16807915c9. Europe” (World Bank Group, Washington, DC, ec.europa.eu/info/sites/info/files/justice 6. Ministry of Justice of the Czech Republic, 2017), http:/ /documents.worldbank.org _scoreboard_2018_en.pdf. České soudnictví 2016: Výroční statistická zpráva /curated/en/748601499954362710 25. CEPEJ, “Efficiency and Quality of the [Czech Judiciary 2016: Annual Statistical /Towards-effective-enforcement-of Slovak Judicial System: Assessment and Report], http:/ /www.ceskatelevize.cz -uncontested-monetary-claims-lessons-from Recommendations on the Basis of CEPEJ /ct24/sites/default/files/1950205-ceske -Eastern-and-Central-Europe. Tools,” CEPEJ-COOP (2017)14 (CEPEJ, _soudnictvi_2016_-_vyrocni_statisticka 14. Svetozara Petkova and Georgia Harley, Strasbourg, 2017), https:/ /rm.coe.int/slovakia _zprava.pdf. “Towards Effective Enforcement of -assessment-report-on-efficiency-and 7. Paulo Pinheiro-Alves, Julio Ricardo and Uncontested Monetary Claims: Lessons -quality-of-the-slovak-jud/16807915c9. Jose Tavares, “Foreign Direct Investment from Eastern and Central Europe” (World 26. Section 1 (3) of Act 244/2002 Coll. on and Institutional Reform: Evidence and an Bank Group, Washington, DC, 2017), Arbitration, as amended. Application to Portugal,” Working Paper http:/ /documents.worldbank.org/curated/ 27. Carlos Eugenio Jorquiera and Gabriel Dabdoub 6/2013 (Bank of Portugal, Lisbon, 2013), en/748601499954362710/Towards- Alvarez, “The Cost of Disputes in Companies https://www.bportugal.pt/sites/default/files/ effective-enforcement-of-uncontested- and the Use of ADR Methods: Lessons from anexos/papers/wp201306.pdf. Nine Latin American Countries” (Alternative 82 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Dispute Resolution Network, Multilateral Investment Fund, Washington, DC, 2005); Lisa Blomgren Amsler, Tina Nabatchi, Jeffrey M. Senger and Michael Scott Jackman, “Dispute Resolution and the Vanishing Trial: Comparing Federal Government Litigation and ADR Outcomes,” Ohio State Journal on Dispute Resolution 24, no. 2 (2009): 225–62. 28. Heike Gramckow, Omniah Ebeid, Erica Bosio and Jorge Luis Silva Mendez, Good Practices for Courts: Helpful Elements for Good Court Performance and the World Bank’s Quality of Judicial Process Indicators (Washington, DC: World Bank, 2016). 29. Council of Europe, Committee of Ministers, “Recommendation No. R (84) 5 of the Committee of Ministers to Member States on the Principles of Civil Procedure Designed to Improve the Functioning of Justice” (Council of Europe, Strasbourg, 1984), p. 2. 30. Doing Business database. These countries are Bulgaria, Croatia, Estonia, Germany, Latvia, Lithuania, the Netherlands and Poland. 31. In Croatia the limit on the number of adjournments (allowing only one) applies only to preliminary proceedings (Civil Procedure Act, article 291). During the main hearing the number of adjournments is not limited by law. Greece is the only EU member state with a limit on the number of adjournments, though the rule is rarely enforced in practice. 32. Judges in the Czech Republic and Slovakia may grant continuances for important reasons at their sole discretion. In Portugal a judge may do so in case of “justified obstacles,” without specifying what those obstacles are. 33. Heike Gramckow, Omniah Ebeid, Erica Bosio and Jorge Luis Silva Mendez, Good Practices for Courts: Helpful Elements for Good Court Performance and the World Bank’s Quality of Judicial Process Indicators (Washington, DC: World Bank, 2016). 34. A threshold of HRK 10,000 (about EUR 1,300) applies for general civil claims. Civil Procedure Code, sections 457–467a. 35. “Small Claims,” European e-Justice, last modified November 17, 2017, https:/ /e-justice .europa.eu/content_small_claims-42-en.do. 36. World Bank, Fast-Tracking the Resolution of Minor Disputes: Experience from EU Member States (Washington, DC: World Bank, 2017), http://documents.worldbank .org/curated/pt/670181487131729316 /pdf/112769-WP-P161975-PUBLIC -FasttrackingSmallClaimsinEU.pdf. About Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia ƒƒ Doing Business measures aspects of business regulation affecting domestic small and medium-size firms defined on the basis of standardized case scenarios and located in the largest business city of each economy. In addition, for 11 economies a second city is covered. ƒƒ Doing Business covers 11 areas of business regulation across 190 economies. Ten of these areas—starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency—are included in the distance to frontier score and ease of doing business ranking. Doing Business also measures features of labor market regulation, which is not included in these two measures. ƒƒ Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia covers only 5 Doing Business indicators: starting a business, dealing with construction permits, getting electricity, registering property and enforcing contracts. ƒƒ Doing Business and Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia rely on four main sources of information: the relevant laws and regulations, expert respondents, the governments of the economies and cities covered and the World Bank Group regional staff. ƒƒ Governments use Doing Business as a source of objective data providing unique insights into good practices worldwide. Many Doing Business indicators are “actionable”—though depending on the context, they may not always be “action-worthy.” 84 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA T he foundation of Doing Business is apply to firms at different stages of their Indicators that use a legal scoring meth- the notion that economic activity, life cycle. The results for each economy odology, such as those on getting credit particularly private sector develop- can be compared with those for 189 other or protecting minority investors, are typi- ment, benefits from clear and coherent economies and over time. cally excluded because they mostly look rules—rules that set out and clarify prop- at national laws with general applicability. erty rights and facilitate the resolution of disputes and rules that enhance the FACTORS MEASURED BY Doing Business measures aspects of predictability of economic interactions and DOING BUSINESS AND business regulation affecting domestic provide contractual partners with essential SUBNATIONAL DOING small and medium-size firms defined on protections against arbitrariness and abuse. BUSINESS the basis of standardized case scenarios Such rules are much more effective in and located in the largest business city of shaping the incentives of economic agents Doing Business captures several impor- each economy. In addition, for 11 econo- in ways that promote growth and develop- tant dimensions of the regulatory mies a second city is covered. Subnational ment where they are reasonably efficient in environment as it applies to local firms. Doing Business covers a subset of the 11 design, are transparent and accessible to It provides quantitative indicators on areas of business regulation that Doing those for whom they are intended and can regulation for starting a business, dealing Business covers across 190 economies. be implemented at a reasonable cost. The with construction permits, getting elec- quality of the rules also has a crucial bearing tricity, registering property, getting credit, Doing Business relies on four main sources on how societies distribute the benefits and protecting minority investors, paying of information: the relevant laws and finance the costs of development strategies taxes, trading across borders, enforcing regulations, Doing Business respondents, and policies. contracts, resolving insolvency and labor the governments of the economies cov- market regulation (table 7.1). Subnational ered and the World Bank Group regional Good rules are a key to social inclusion. Doing Business focuses on indicators that staff. More than 33,000 professionals in Enabling growth—and ensuring that all are most likely to vary from city to city, 190 economies have assisted in providing people, regardless of income level, can such as those on dealing with construc- the data that inform the Doing Business participate in its benefits—requires an tion permits or registering property. indicators over the past 15 years. environment where new entrants with drive and good ideas can get started in business and where good firms can TABLE 7.1 What Doing Business and Subnational Doing Business measure— invest and expand. The role of govern- 11 areas of business regulation ment policy in the daily operations of Indicator set What is measured domestic small and medium-size firms is Typically included in subnational Doing Business reports a central focus of the Doing Business data. Starting a business Procedures, time, cost and paid-in minimum capital to start a The objective is to encourage regulation limited liability company that is designed to be efficient, acces- Dealing with construction permits Procedures, time and cost to complete all formalities to build a sible to all and simple to implement. warehouse and the quality control and safety mechanisms in the construction permitting system Onerous regulation diverts the energies Getting electricity Procedures, time and cost to get connected to the electrical grid, of entrepreneurs away from developing the reliability of the electricity supply and the transparency of tariffs their businesses. But regulation that is Registering property Procedures, time and cost to transfer a property and the quality of efficient, transparent and implemented in the land administration system a simple way facilitates business expan- Enforcing contracts Time and cost to resolve a commercial dispute and the quality of sion and innovation, and makes it easier judicial processes for aspiring entrepreneurs to compete on Not typically included in subnational Doing Business reports an equal footing. Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in Doing Business measures aspects of corporate governance business regulation for domestic firms Paying taxes Payments, time and total tax rate for a firm to comply with all tax through an objective lens. The focus of regulations as well as postfiling processes the project is on small and medium-size Trading across borders Time and cost to export the product of comparative advantage and import auto parts companies in the largest business city of an economy. Based on standardized case Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency studies, Doing Business presents quantita- Labor market regulation Flexibility in employment regulation and aspects of job quality tive indicators on the regulations that ABOUT DOING BUSINESS AND DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA 85 The subnational Doing Business stud- ƒƒ The data produced are comparable Indonesia, Kenya, Mexico, Nigeria, the ies expand the Doing Business analysis across locations within the economy Philippines and the Russian Federation— beyond the largest business city of an and internationally, enabling loca- have undertaken two or more rounds of economy. They measure variation in tions to benchmark their results both subnational data collection to measure regulations or in the implementation of locally and globally. Comparisons of progress over time (figure 7.2). Recently national laws across locations within an locations that are within the same subnational studies were completed in economy (as in South Africa) or a region economy and therefore share the Afghanistan, Kazakhstan, Kenya, Mexico (as in this report). Projects are under- same legal and regulatory framework and the United Arab Emirates. Ongoing taken at the request of governments. can be revealing: local officials find it studies include those in South Africa (9 hard to explain why doing business is cities) and Nigeria (37 states). Data collected by subnational studies more difficult in their jurisdiction than over the past three years show that there in a neighboring one. Doing Business in the European Union 2018: can be substantial variation within an ƒƒ Pointing out good practices that Croatia, the Czech Republic, Portugal and economy (figure 7.1). In Mexico in 2016, exist in some locations but not oth- Slovakia is the first report of the subna- for example, registering a property trans- ers within an economy helps policy tional Doing Business series in Croatia, the fer took as few as 9 days in Puebla and makers recognize the potential for Czech Republic, Portugal and Slovakia. as many as 78 in Oaxaca. Indeed, within replicating these good practices. This It covers five cities in Croatia (Osijek, the same economy one can find locations can prompt discussions of regula- Rijeka, Split, Varazdin and Zagreb), seven that perform as well as economies rank- tory reform across different levels of in the Czech Republic (Brno, Liberec, ing in the top 20 on the ease of register- government, providing opportunities Olomouc, Ostrava, Plzen, Prague and Usti ing property and locations that perform for local governments and agencies nad Labem), eight in Portugal (Braga, as poorly as economies ranking in the to learn from one another and result- Coimbra, Evora, Faro, Funchal, Lisbon, bottom 40 on that indicator. ing in local ownership and capacity Ponta Delgada and Porto) and five in building. Slovakia (Bratislava, Kosice, Presov, The subnational Doing Business studies Trnava and Zilina). create disaggregated data on business Since 2005 subnational reports have regulation. But they go beyond a data col- covered 485 locations in 71 economies, How the indicators are selected lection exercise. They have proved to be including Colombia, the Arab Republic The choice of the 11 sets of Doing Business strong motivators for regulatory reform of Egypt, Italy, the Philippines and indicators has been guided by economic at the local level: Serbia. Seventeen economies—including research and firm-level data, specifically FIGURE 7.1  Different locations, different regulatory processes, same economy Time to register property (days) 80 Oaxaca (78) Isiolo (73) 60 58 Wroclaw (51) Mangaung (52) Mombasa (41) 40 33 32 26 Johannesburg Melilla (26) Bialystok (23) 20 (18) 17 Madrid Puebla (12.5) (9) 0 Kenya Mexico Poland South Africa Spain Least time Most time Average time Source: Subnational Doing Business database. Note: The average time shown for each economy is based on all locations covered by the data: 11 cities in Kenya in 2016, 32 states in Mexico in 2016, 18 cities in Poland in 2015, 9 cities in South Africa in 2015 and 19 cities in Spain in 2015. 86 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA FIGURE 7.2  Comparing regulation at the local level: subnational Doing Business studies 79 cities in Europe and Central Asia 63 cities in OECD high-income economies 30 cities in the Middle East and North Africa 46 cities 76 cities in South Asia in East Asia and the Pacific 82 cities 109 cities in Sub-Saharan Africa in Latin America and the Caribbean ECONOMIES WITH ONE SUBNATIONAL OR REGIONAL STUDY ECONOMIES WITH MORE THAN ONE SUBNATIONAL OR REGIONAL STUDY Source: Subnational Doing Business database. data from the World Bank Enterprise Doing Business in the European Union 2018: regulation as a way to address social Surveys.1 These surveys provide data Croatia, the Czech Republic, Portugal and and environmental concerns—such as highlighting the main obstacles to Slovakia covers five Doing Business indica- by imposing a greater regulatory burden business activity as reported by entre- tor sets (or topics): starting a business, on activities that pose a high risk to the preneurs in more than 130,000 firms dealing with construction permits, get- population and a lesser one on lower-risk in 139 economies. Access to finance ting electricity, registering property and activities. Thus the economies that rank and access to electricity, for example, enforcing contracts. These Doing Business highest on the ease of doing business are among the factors identified by the indicator sets were selected on the basis are not those where there is no regula- surveys as important to businesses— of their relevance to the countries’ con- tion—but those where governments have inspiring the design of the Doing Business text and their ability to show variation managed to create rules that facilitate indicators on getting credit and getting across the cities covered. interactions in the marketplace without electricity. needlessly hindering the development of Some Doing Business indicators give a the private sector. The design of the Doing Business indica- higher score for more regulation and tors has also been informed by theoretical better-functioning institutions (such as The distance to frontier and insights gleaned from extensive research courts). For example, higher scores are ease of doing business ranking and the literature on the role of institu- given in the area of protecting minority To provide different perspectives on the tions in enabling economic development. investors for stricter disclosure require- data, Doing Business presents data both In addition, the background papers devel- ments for related-party transactions. for individual indicators and for two oping the methodology for each of the Higher scores are also given for a aggregate measures: the distance to Doing Business indicator sets have estab- simplified way of applying regulation that frontier score and the ease of doing busi- lished the importance of the rules and keeps compliance costs for firms low— ness ranking. This report focuses only on regulations that Doing Business focuses such as by easing the burden of business the distance to frontier score and ranking on for such economic outcomes as trade start-up formalities with a one-stop shop for individual indicator sets. volumes, foreign direct investment, mar- or through a single online portal. Finally, ket capitalization in stock exchanges and Doing Business scores reward economies The distance to frontier score aids in private credit as a percentage of GDP.2 that apply a risk-based approach to assessing the absolute level of regulatory ABOUT DOING BUSINESS AND DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA 87 performance and how it improves over over time as measured by Doing Business. with construction permits, getting elec- time. This measure shows the distance The distance to frontier score is first tricity, registering property and enforcing of each economy to the “frontier,” computed for each topic and then aver- contracts. The distance to frontier score which represents the best performance aged across all topics to compute the for each indicator captures the gap observed on each of the indicators across aggregate distance to frontier score. The between a city’s performance and the best all economies in the Doing Business sam- ranking on the ease of doing business practices globally. For starting a business, ple since 2005 or the third year in which complements the distance to frontier for example, New Zealand has the small- data were collected for the indicator. The score by providing information about est number of procedures required (one) frontier is set at the highest possible value an economy’s performance in business and the shortest time to fulfill them (0.5 for indicators calculated as scores, such regulation relative to the performance of days). Slovenia has the lowest cost (0.0), as the strength of legal rights index or the other economies as measured by Doing and Australia, Colombia and more than quality of land administration index. This Business. 100 other economies have no paid-in underscores the gap between a particular minimum capital requirement (table 7.2). economy’s performance and the best Doing Business in the European Union 2018: performance at any point in time and Croatia, the Czech Republic, Portugal and Doing Business uses a simple averaging helps in assessing the absolute change Slovakia includes rankings of the 25 cities approach for weighting component in the economy’s regulatory environment on five topics: starting a business, dealing indicators, calculating rankings and TABLE 7.2  What is the frontier in regulatory practice? Topic and indicator Who set the frontier Frontier Worst Starting a business Procedures (number) New Zealand 1 18a Time (days) New Zealand 0.5 100b Cost (% of income per capita) Slovenia 0.0 200.0b Minimum capital (% of income per capita) Australia; Colombia c 0.0 400.0b Dealing with construction permits Procedures (number) No economy was at the frontier as of June 1, 2017. 5 30a Time (days) No economy was at the frontier as of June 1, 2017. 26 373b Cost (% of warehouse value) No economy was at the frontier as of June 1, 2017. 0.0 20.0b Building quality control index (0–15) Luxembourg; New Zealand; United Arab Emirates 15 0d Getting electricity Procedures (number) Germany; Republic of Koreae 3 9a Time (days) Republic of Korea; St. Kitts and Nevis; United Arab Emirates 18 248b Cost (% of income per capita) Japan 0.0 8,100.0b Reliability of supply and transparency of tariffs index (0–8) Belgium; Ireland; Malaysiaf 8 0d Registering property Procedures (number) Georgia; Norway; Portugal; Sweden 1 13a Time (days) Georgia; New Zealand 1 210b Cost (% of property value) Saudi Arabia 0.0 15.0b Quality of land administration index (0–30) No economy has attained the frontier yet. 30 0d Enforcing contracts Time (days) Singapore 120 1,340b Cost (% of claim) Bhutan 0.1 89.0b Quality of judicial processes index (0–18) No economy has attained the frontier yet. 18 0d Source: Doing Business database. a. Worst performance is defined as the 99th percentile among all economies in the Doing Business sample. b. Worst performance is defined as the 95th percentile among all economies in the Doing Business sample. c. More than 100 other economies also have a paid-in minimum capital requirement of 0. d. Worst performance is the worst value recorded. e. In 17 other economies it also takes no more than 3 procedures to get an electricity connection. f. Another 25 economies also have a score of 8 on the reliability of supply and transparency of tariffs index. 88 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA determining the distance to frontier component indicators (very few econo- by Doing Business.4 Thus Doing Business score.3 Each topic covered by Doing mies need 700 days to complete the uses the simplest method: weighting all Business relates to a different aspect of procedures to start a business, but many topics equally and, within each topic, the business regulatory environment. The need 9 days), the worst performance is giving equal weight to each of the topic distance to frontier scores and rankings of calculated after the removal of outliers. components. each economy vary, often considerably, The definition of outliers is based on the across topics, indicating that a strong distribution for each component indica- A location’s distance to frontier score is performance by an economy in one area tor. To simplify the process two rules indicated on a scale from 0 to 100, where of regulation can coexist with weak per- were defined: the 95th percentile is used 0 represents the worst performance and formance in another. One way to assess for the indicators with the most dispersed 100 the frontier. All distance to frontier the variability of an economy’s regulatory distributions (including minimum capital calculations are based on a maximum of performance is to look at its distance to and the time and cost indicators), and five decimals. However, indicator ranking frontier scores across topics. Morocco, the 99th percentile is used for number of calculations and the ease of doing busi- for example, has an overall distance to procedures (figure 7.3). ness ranking calculations are based on frontier score of 67.91, meaning that it two decimals. is two-thirds of the way from the worst In the second step, for each economy the to the best performance. Its distance to scores obtained for individual indicators frontier score is 92.46 for starting a busi- are aggregated through simple averaging FACTORS NOT MEASURED ness, 85.72 for paying taxes and 81.12 for for each topic for which performance is BY DOING BUSINESS AND trading across borders. At the same time, measured and ranked; for the 25 cities SUBNATIONAL DOING it has a distance to frontier score of 34.03 in Doing Business in the European Union BUSINESS for resolving insolvency, 45.00 for getting 2018: Croatia, the Czech Republic, Portugal credit and 58.33 for protecting minority and Slovakia, this is done for starting Many important policy areas are not investors. a business, dealing with construction covered by Doing Business; even within permits, getting electricity, registering the areas it covers its scope is narrow Calculation of the distance to property and enforcing contracts. More (table 7.3). Doing Business does not frontier score complex aggregation methods—such as measure the full range of factors, policies Calculating the distance to frontier principal components and unobserved and institutions that affect the quality score for each economy involves two components—yield a ranking nearly of an economy’s business environment main steps. In the first step individual identical to the simple average used or its national competitiveness. It does component indicators are normalized to a common unit where each of the 36 FIGURE 7.3 How are distance to frontier scores calculated for indicators? An example component indicators y (except for the A time-and-motion topic: dealing with construction permits total tax rate) is rescaled using the linear Distance to frontier transformation (worst − y)/(worst − score for procedures frontier). In this formulation the frontier 100 Regulatory frontier represents the best performance on the Best performance indicator across all economies since (frontier): 5 procedures 2005 or the third year in which data for 80 the indicator were collected. Both the best performance and the worst performance are established every five years based 60 on the Doing Business data for the year in which they are established, and remain 40 at that level for the five years regardless of any changes in data in interim years. Worst Thus an economy may set the frontier for performance 20 (99th percentile): an indicator even though it is no longer at 30 procedures the frontier in a subsequent year. 0 In the same formulation, to mitigate the 5 10 15 20 25 30 35 Procedures (number) effects of extreme outliers in the distri- butions of the rescaled data for most Source: Doing Business database. A legal topic: protecting minority investors Distance to frontier score for extent of disclosure index 100 Regulatory frontier ABOUT DOING BUSINESS AND DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA 89 TABLE 7.3 What Doing Business does not cover tax revenues. Measuring the quality and efficiency of business regulation pro- Examples of areas not covered vides only one input into the debate on Macroeconomic stability the regulatory burden associated with Development of the financial system achieving regulatory objectives, which can differ across economies. Quality of the labor force Incidence of bribery and corruption Market size ADVANTAGES AND Lack of security LIMITATIONS OF THE METHODOLOGY Examples of aspects not included within the areas covered In paying taxes, personal income tax rates The Doing Business methodology is In getting credit, the monetary policy stance and the associated ease or tightness designed to be an easily replicable way to of credit conditions for firms benchmark specific aspects of business In trading across borders, export or import tariffs and subsidies regulation. Its advantages and limitations should be understood when using the In resolving insolvency, personal bankruptcy rules data (table 7.4). not, for example, capture the aspects of those that it does not measure are also Ensuring comparability of the data across market size, macroeconomic stability, important. a global set of economies is a central development of the financial system, the consideration for the Doing Business quality of the labor force or the incidence Doing Business does not attempt to quan- indicators, which are developed around of bribery and corruption. tify all costs and benefits of a particular standardized case scenarios with specific law or regulation to society as a whole. assumptions. One such assumption is The focus is deliberately narrow even The paying taxes indicators measure the the location of a standardized business— within the relatively small set of indi- total tax rate, which, in isolation, is a cost the subject of the Doing Business case cators included in Doing Business. For to businesses. However, the indicators study—in the largest business city of the example, Doing Business captures the do not measure—nor are they intended economy. The reality is that business reg- time and cost for the logistical process to measure—the benefits of the social ulations and their enforcement may differ of exporting and importing goods in the and economic programs funded with within a country, particularly in federal trading across borders indicators, but not the cost of tariffs or of international TABLE 7.4 Advantages and limitations of the Doing Business methodology transport. Doing Business provides a nar- row perspective on the infrastructure Feature Advantages Limitations challenges that firms face, particularly Use of standardized Makes data comparable across Reduces scope of data; only regulatory case scenarios economies and methodology reforms in areas measured can be in the developing world, through these transparent, using case scenarios that systematically tracked; the case indicators. It does not address the extent are common globally scenarios may not be the most common in a particular economy to which inadequate roads, rail, ports Focus on largest Makes data collection manageable Reduces representativeness of data and communications may add to firms’ business city a (cost-effective) and data comparable for an economy if there are significant costs and undermine competitiveness differences across locations (except to the extent that the trading Focus on domestic and Keeps attention on formal sector— Unable to reflect reality for informal across borders indicators indirectly formal sector where regulations are relevant and sector—important where that is firms are most productive large—or for foreign firms facing a measure the quality of ports and border different set of constraints connections). Similar to the indicators Reliance on expert Ensures that data reflect knowledge Indicators less able to capture variation on trading across borders, all aspects respondents of those with most experience in in experiences among entrepreneurs conducting types of transactions of commercial legislation are not cov- measured ered by those on starting a business or Focus on the law Makes indicators “actionable”— Where systematic compliance with the protecting minority investors. And while because the law is what policy makers law is lacking, regulatory changes will Doing Business measures only a few can change not achieve full results desired aspects within each area that it covers, Source: Doing Business database. business regulation reforms should not a. In economies with a population of more than 100 million as of 2013, Doing Business covers business regulation in both the largest and second largest business city. Subnational Doing Business studies go beyond the largest focus only on these aspects, because business city within a country or region. 90 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA states and large economies. But gather- Doing Business and the de facto insights Relevant laws and regulations ing data for every relevant jurisdiction in offered by the World Bank Enterprise Indicators presented in Doing Business each of the 190 economies covered by Surveys.5 Levels of informality tend to in the European Union 2018: Croatia, the Doing Business is infeasible. Nevertheless, be higher in economies with particularly Czech Republic, Portugal and Slovakia are where policy makers are interested in burdensome regulation. Compared with based on laws and regulations. Besides generating data at the local level, beyond their formal sector counterparts, firms in participating in interviews or filling out the largest business city, Doing Business the informal sector typically grow more written questionnaires, expert respon- has complemented its global indicators slowly, have poorer access to credit dents provided references to the relevant with subnational studies. In addition, and employ fewer workers—and these laws, regulations and fee schedules, coverage was extended to the second workers remain outside the protections which were collected and analyzed by the largest business city in economies with a of labor law and, more generally, other Subnational Doing Business team. population of more than 100 million (as legal protections embedded in the law.6 of 2013) in Doing Business 2015. Firms in the informal sector are also less The team collects the texts of the rel- likely to pay taxes. Doing Business mea- evant laws and regulations and checks Doing Business recognizes the limitations sures one set of factors that help explain the questionnaire responses for accuracy. of the standardized case scenarios and the occurrence of informality and give The team will examine the civil procedure assumptions. But while such assump- policy makers insights into potential code, for example, to check the maximum tions come at the expense of generality, areas of regulatory reform. number of adjournments in a commercial they also help to ensure the comparabil- court dispute, and read the insolvency ity of data. Some Doing Business topics code to see whether the debtor can are complex, and so it is important that DATA COLLECTION IN initiate liquidation or reorganization the standardized cases are defined care- PRACTICE proceedings. These and other types of fully. For example, the standardized case laws are available on the Doing Business scenario usually involves a limited liabil- The Doing Business data are based on a law library website.7 Since the data col- ity company or its legal equivalent. There detailed reading of domestic laws and lection process involves an annual update are two reasons for this assumption. regulations as well as administrative of an established database, having a very First, private, limited liability companies requirements. The Doing Business 2018 large sample of respondents is not strictly are the most prevalent business form report covers 190 economies—includ- necessary. In principle, the role of the (for firms with more than one owner) ing some of the smallest and poorest contributors is largely advisory—helping in many economies around the world. economies, for which little or no data are the Doing Business team to locate and Second, this choice reflects the focus of available from other sources. The data understand the laws and regulations. Doing Business on expanding opportuni- are collected through several rounds There are quickly diminishing returns ties for entrepreneurship: investors are of communication with expert respon- to an expanded pool of contributors. encouraged to venture into business dents (both private sector practitioners This notwithstanding, the number of when potential losses are limited to their and government officials), through contributors rose by 40% between 2010 capital participation. responses to questionnaires, conference and 2016. calls, written correspondence and visits Another assumption underlying the by the team. Doing Business relies on Extensive consultations with multiple Doing Business indicators is that entre- four main sources of information: the contributors are conducted by the team preneurs have knowledge of and comply relevant laws and regulations, Doing to minimize measurement error for the with applicable regulations. In practice, Business respondents, the governments rest of the data. For some indicators—for entrepreneurs may not be aware of what of the economies covered and the World example, those on dealing with construc- needs to be done or how to comply with Bank Group regional staff (figure 7.4). tion permits, enforcing contracts and regulations and may lose considerable For a detailed explanation of the Doing resolving insolvency—the time com- time trying to find out. Alternatively, Business methodology, see the data ponent and part of the cost component they may intentionally avoid compli- notes. (where fee schedules are lacking) are ance—by not registering for social based on actual practice rather than security, for example. Firms may opt for Subnational Doing Business follows similar the law on the books. This introduces a bribery and other informal arrangements data collection methods. However, sub- degree of judgment by respondents on intended to bypass the rules where national Doing Business studies are driven what actual practice looks like. When regulation is particularly onerous—an by client demand and do not follow the respondents disagree, the time indicators aspect that helps explain differences same timeline as global Doing Business reported by Doing Business represent the between the de jure data provided by publications. median values of several responses given ABOUT DOING BUSINESS AND DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA 91 FIGURE 7.4  How Doing Business collects and verifies the data Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Questionnaire Data collection and analysis Report development launch   The Doing Business team distributes the questionnaires and analyzes the relevant laws and regulations along   The Doing Business team updates with the information in the Data verification   The report is published, the questionnaires and consults questionnaires. followed by media outreach with internal and external experts. and findings dissemination.   The Doing Business team travels to   The Doing Business team shares around 30 economies. preliminary information on reforms with governments (through the World   The Doing Business team engages in Bank Group’s Board of Executive conference calls, videoconferences Directors) and World Bank Group and in-person meetings with regional teams for their feedback. government officials and private sector practitioners.   The Doing Business team analyzes the data and writes the report. Comments   Governments and World Bank Group on the report and data are received regional teams submit information on from across the World Bank Group regulatory changes that could through an internal review process. potentially be included in the global count of regulatory reforms. under the assumptions of the standard- indicators was also provided by certain may carry out 10 such transactions each ized case. public officials (such as registrars from month. The incorporation lawyers and the company or property registry). Local other experts providing information to Expert respondents and national government officials and Doing Business are therefore better able For Doing Business in the European Union judges also provided information that is to assess the process of starting a busi- 2018: Croatia, the Czech Republic, Portugal incorporated in the indicators. ness than are individual firms. They also and Slovakia, more than 700 professionals have access to current regulations and across the four economies assisted in pro- Following the standard methodological practices, while a firm may have faced a viding the data that inform the five areas approach for time-and-motion studies, different set of rules when incorporating covered. The Subnational Doing Business Doing Business in the European Union 2018: years before. The second reason is that website and the acknowledgments sec- Croatia, the Czech Republic, Portugal and the Doing Business questionnaires mostly tion of this report list the names and Slovakia breaks down each process or gather legal information, which firms credentials of those respondents wishing transaction, such as starting a business or are unlikely to be fully familiar with. For to be acknowledged. Selected on the registering a building, into separate steps example, few firms will know about all basis of their expertise, respondents are to ensure a better estimate of time. The the many legal procedures involved in professionals who routinely administer or time estimate for each step was given by resolving a commercial dispute through advise on the legal and regulatory require- practitioners with significant and routine the courts, even if they have gone through ments in the specific areas covered by experience in the transaction. the process themselves. But a litigation Doing Business in the European Union 2018: lawyer should have little difficulty in Croatia, the Czech Republic, Portugal and There are two main reasons that the providing the requested information on Slovakia. Because of the focus on legal Doing Business methodology for data all the processes. and regulatory arrangements, most of the collection does not include the survey of respondents are legal professionals such firms. The first relates to the frequency Governments and World Bank as lawyers or notaries. Architects, engi- with which firms engage in the transac- Group staff neers and other professionals answered tions captured by the indicators, which After analyzing laws and regulations the questionnaires related to dealing with is generally low. For example, a firm goes and conducting follow-up interviews construction permits and getting elec- through the start-up process once in its with respondents for Doing Business in tricity. Information incorporated in the existence, while an incorporation lawyer the European Union 2018: Croatia, the 92 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Czech Republic, Portugal and Slovakia, regulatory reform is needed, including does not suggest that doing so should the Subnational Doing Business team areas well beyond those measured by come at the expense of other worthy shared preliminary findings of the report Doing Business. policy goals. with governments and public agencies operating at the national and local lev- Many Doing Business indicators can be Over the past decade governments have els. Through this process, government considered actionable. For example, increasingly turned to Doing Business authorities had the opportunity to com- governments can set the minimum as a repository of actionable, objective ment on the preliminary data, in meetings capital requirement for new firms, invest data providing unique insights into with World Bank Group staff as well as in company and property registries to good practices worldwide as they have in writing. Having public officials discuss increase their efficiency, or improve the come to understand the importance of and comment on the preliminary results efficiency of tax administration by adopt- business regulation as a driving force of has proven to be an important activity, ing the latest technology to facilitate the competitiveness. To ensure the coordina- not only to improve the quality of the preparation, filing and payment of taxes tion of efforts across agencies, econo- report but also to enhance the dialogue by the business community. And they mies such as Colombia, Malaysia and between the local governments and the can undertake court reforms to shorten Russia have formed regulatory reform World Bank Group at the subnational delays in the enforcement of contracts. committees. These committees use the level. But some Doing Business indicators Doing Business indicators as one input capture procedures, time and costs that to inform their programs for improving involve private sector participants, such the business environment. More than USES OF THE DOING as lawyers, notaries, architects, electri- 40 other economies have also formed BUSINESS DATA cians or freight forwarders. Governments such committees. In East Asia and the may have little influence in the short Pacific they include Brunei Darussalam; Doing Business was designed with two run over the fees these professions Indonesia; the Republic of Korea; the main types of users in mind: policy makers charge, though much can be achieved Philippines; Taiwan, China; and Thailand. and researchers.8 It is a tool that govern- by strengthening professional licensing In the Middle East and North Africa: ments can use in designing sound busi- regimes and preventing anticompetitive the Arab Republic of Egypt, Kuwait, ness regulatory policies. Nevertheless, behavior. And governments have no con- Morocco, Saudi Arabia and the United the Doing Business data are limited in trol over the geographic location of their Arab Emirates. In South Asia: India and scope and should be complemented economy, a factor that can adversely Pakistan. In Europe and Central Asia: with other sources of information. Doing affect businesses. Albania, Croatia, Georgia, Kazakhstan, Business focuses on a few specific rules Kosovo, the Kyrgyz Republic, the for- relevant to the specific case studies ana- While many Doing Business indicators mer Yugoslav Republic of Macedonia, lyzed. These rules and case studies are are actionable, this does not necessarily Moldova, Montenegro, Poland, Tajikistan, chosen to be illustrative of the business mean that they are all “action-worthy” in Ukraine and Uzbekistan. In Sub-Saharan regulatory environment, but they are a particular context. Business regulation Africa: Burundi, the Democratic Republic not a comprehensive description of that reforms are only one element of a strat- of Congo, the Republic of Congo, Côte environment. By providing a unique data egy aimed at improving competitiveness d’Ivoire, Guinea, Kenya, Liberia, Malawi, set that enables analysis aimed at better and establishing a solid foundation for Mali, Mauritius, Nigeria, Rwanda, Sierra understanding the role of business regu- sustainable economic growth. There Leone, Togo, Zambia and Zimbabwe. And lation in economic development, Doing are many other important goals to pur- in Latin America: Chile, Costa Rica, the Business also serves as an important sue—such as effective management of Dominican Republic, Guatemala, Mexico, source of information for researchers. public finances, adequate attention to Panama and Peru. education and training, adoption of the Governments and policy makers latest technologies to boost economic Many economies share knowledge on Doing Business offers policy makers a productivity and the quality of public the regulatory reform process related to benchmarking tool useful in stimulating services, and appropriate regard for air the areas measured by Doing Business. policy debate, both by exposing potential and water quality to safeguard public Among the most common venues for challenges and by identifying good prac- health. Governments must decide what this knowledge sharing are peer-to-peer tices and lessons learned. Despite the set of priorities best suits their needs. learning events—workshops where offi- narrow focus of the indicators, the initial To say that governments should work cials from different governments across debate in an economy on the results they toward a sensible set of rules for private a region or even across the globe meet highlight typically turns into a deeper sector activity (as embodied, for exam- to discuss the challenges of regulatory discussion on areas where business ple, in the Doing Business indicators) reform and to share their experiences. ABOUT DOING BUSINESS AND DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA 93 Think tanks and other research them from taking full advantage of their Doing Business measures aspects of busi- organizations productive capacity. With the availability ness regulation affecting domestic firms. Doing Business data are widely used by of Doing Business indicators on trading However, research shows that better think tanks and other research organiza- across borders—which measure the time, business regulation—as measured by tions, both to produce research papers procedural and monetary costs of export- Doing Business—is associated with higher and to develop new indices. ing and importing—several empirical levels of foreign direct investment.19 studies have assessed how trade costs Moreover, one study found that foreign Many research papers have shown affect the export and import performance direct investment can either impede or the importance of business regulation, of economies. A rich body of empirical promote domestic investment in the host demonstrating how it relates to different research shows that efficient infrastruc- economy, depending on how business- economic outcomes.9 Among the most ture and a healthy business environment friendly its entry regulations are. Indeed, commonly cited theoretical mechanisms are positively associated with export the study shows that foreign direct through which excessive business regula- performance.13 investment can crowd out domestic tion affects economic performance and investment in economies with costly pro- development is that it makes engaging in But while improving infrastructure effi- cesses for starting a business.20 Another the formal economy too costly for firms, ciency and trade logistics brings docu- study shows that economies with higher causing them to decide against invest- mented benefits to an economy’s balance international market integration have, on ing or to move to the informal economy. of trade as well as to individual traders, average, easier and simpler processes for Recent studies have conducted extensive delays in transit time can reduce exports. starting a business.21 empirical testing of this proposition A study analyzing the importance of trade using Doing Business and other indicators. logistics found that a one-day increase Recent empirical work shows the impor- According to one study, for example, a in transit time reduces exports by an tance of well-designed credit market reform that simplified business registra- average of 7% in Sub-Saharan Africa.14 regulations and well-functioning court tion in Mexican municipalities increased Another study found that transport systems for debt recovery. For example, registration by 5% and wage employment delays have a particularly large impact a reform making bankruptcy laws more by 2.2%—and, as a result of increased for landlocked economies and for time- efficient significantly improved the recov- competition, reduced the income of sensitive agricultural and manufacturing ery rate for viable firms in Colombia.22 In incumbent businesses by 3%.10 Business products, reducing trade by more than a multi-economy study the introduction registration reforms in Mexico also result- 1% for each day of delay.15 Delays while of collateral registries for movable assets ed in 14.9% of informal business owners clearing customs also affect a firm’s abil- was shown to increase firms’ access to shifting to the formal economy.11 ity to export, particularly when goods are finance by approximately 8%.23 In India destined for new clients.16 the establishment of debt recovery tri- Considerable effort has been devoted to bunals reduced nonperforming loans by studying the link between government Research shows that the regulatory envi- 28% and lowered interest rates on larger regulation of firm entry and growth in ronment matters for the impact of trade. loans, suggesting that faster processing employment. Research in Portugal found A 1% increase in trade is associated with of debt recovery cases led to a lower that business reforms reduced the time an increase of more than 0.5% in income cost of credit.24 An in-depth review of and cost needed for company formaliza- per capita in economies with flexible global bank flows revealed that firms in tion, increasing the number of business entry regulation, but has no positive economies with better credit information start-ups by 17% and the number of new income effects in economies with more sharing systems and higher branch pen- jobs created monthly per 100,000 inhab- rigid entry regulation.17 Research has also etration evade taxes to a lesser degree.25 itants by 7. But while new start-ups were found that while domestic buyers benefit And strong shareholder rights have been more likely to be female-owned than from having goods of varying quality and found to reduce financial frictions, espe- before the reforms, they also tended to be price to choose from, import competition cially for firms with large external finance smaller and headed by less experienced results in only minimal quality upgrading relative to their capital stock (such as and less educated entrepreneurs with in OECD high-income economies with small firms or firms in distress).26 lower sales per worker.12 cumbersome regulation—and it has no effect on quality upgrading in non- There is also a large body of theoretical In many economies companies engag- OECD economies with cumbersome and empirical work investigating the ing in international trade struggle with regulation.18 Thus the potential gains distortionary effects of high tax rates and high trade costs arising from transport, for consumers from import competi- cumbersome tax codes and procedures. logistics and regulations, impeding tion are reduced where regulation is According to one study, business licens- their competitiveness and preventing cumbersome. ing among retail firms rose 13% after 94 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA a tax reform in Brazil.27 Another found readiness, human capital development, method because both these methods assign roughly equal weights to the topics, since the that a 10% reduction in tax complexity is and travel and tourism sector competi- pairwise correlations among indicators do comparable to a 1% reduction in effective tiveness. These publicly available sources not differ much. An alternative to the simple corporate tax rates.28 expand on the general business environ- average method is to give different weights to the topics, depending on which are considered ment data generated by Doing Business by of more or less importance in the context of a Labor market regulation—as measured incorporating these data into the study specific economy. by Doing Business—has been shown to of other important social and economic 5. Mary Hallward-Driemeier and Lant Pritchett, “How Business Is Done in the Developing have important implications for the labor issues across economies and regions. World: Deals versus Rules,” Journal of Economic market. According to one study, graduat- They prove that, taken individually, Doing Perspectives 29, no. 3 (2015): 121–40. ing from school during a time of adverse Business indicators remain a useful start- 6. Friedrich Schneider, “The Informal Sector in 145 Countries” (Department of Economics, economic conditions has a persistent, ing point for a rich body of analysis across University Linz, Linz, 2005). See also Rafael harmful effect on workers’ subsequent different areas and dimensions. La Porta and Andrei Shleifer, “The Unofficial employment opportunities. The persis- Economy and Economic Development,” Tuck School of Business Working Paper 2009-57 tence of this negative effect is stronger Doing Business has contributed substan- (Dartmouth College, Hanover, NH, 2008), in countries with stricter employment tially to the debate on the importance of available at Social Science Research Network protection legislation.29 Rigid employ- business regulation for economic devel- (SSRN), http:/ /ssrn.com/abstract=1304760. 7. For the law library, see the website at ment protection legislation can also have opment. By expanding the time series http://www.doingbusiness.org/law-library. negative distributional consequences. and the scope of the data through the 8. The focus of the Doing Business indicators A study on Chile, for example, found recent changes to its methodology, Doing remains the regulatory regime faced by domestic firms engaging in economic activity that the tightening of job security rules Business hopes to continue being a key in the largest business city of an economy. was associated with lower employment reference going forward. Doing Business was not initially designed to rates for youth, unskilled workers and inform decisions by foreign investors, though investors may in practice find the data useful women.30 as a proxy for the quality of the national investment climate. Analysis done in the Beyond this body of research, Doing World Bank Group’s Global Indicators Group has shown that countries that have sensible Business has identified 17 different data NOTES rules for domestic economic activity also tend projects or indices that use Doing Business to have good rules for the activities of foreign as one source of data.31 Most of these use 1. The World Bank Enterprise Surveys and Doing investors engaged in the local economy. Business complement each other as two sides 9. The papers cited here are just a few examples indicator-level data and not the aggregate of the same coin. They both provide useful of research done in the areas measured by ease of doing business ranking. Starting a information on the business environment of an Doing Business. Since 2003, when the Doing business is the indicator set most widely economy, but in different ways. Doing Business Business report was first published, 2,182 has a narrower scope than the Enterprise research articles discussing how regulation used, followed by labor market regulation Surveys. But by focusing on actionable in the areas measured by Doing Business and paying taxes. These efforts typically indicators related to business regulation, influences economic outcomes have been combine Doing Business data with data Doing Business provides a clear roadmap published in peer-reviewed academic journals. for governments seeking to improve such Another 6,296 working papers have been from other sources to assess economies regulation. Doing Business uses standardized posted online. along a particular aggregate dimension case scenarios while the Enterprise Surveys 10. Miriam Bruhn, “License to Sell: The such as competitiveness or innovation. use representative samples. For more on the Effect of Business Registration Reform on Enterprise Surveys and how they differ from Entrepreneurial Activity in Mexico,” Review The Heritage Foundation’s Index of Doing Business, see the website at of Economics and Statistics 93, no. 1 (2011): Economic Freedom, for example, has http://www.enterprisesurveys.org. 382–86. used six Doing Business indicators in mea- 2. These papers are available on the Doing 11. Miriam Bruhn, “A Tale of Two Species: Business website at http:/ /www.doingbusiness Revisiting the Effect of Registration Reform on suring the degree of economic freedom in .org/methodology. Informal Business Owners in Mexico,” Journal the world.32 Economies that score better 3. For getting credit, indicators are weighted of Development Economics 103 (2013): 275–83. in these six areas also tend to have a proportionally, according to their contribution 12. Lee G. Branstetter, Francisco Lima, Lowell to the total score, with a weight of 60% J. Taylor and Ana Venâncio, “Do Entry higher degree of economic freedom. assigned to the strength of legal rights index Regulations Deter Entrepreneurship and Job and 40% to the depth of credit information Creation? Evidence from Recent Reforms Similarly, the World Economic Forum index. In this way each point included in these in Portugal,” Economic Journal, published indices has the same value independent of electronically July 16, 2013. uses Doing Business data in its Global the component it belongs to. Indicators for all https:/ /doi.org/10.1111//ecoj.12044. Competitiveness Index, designed to other topics are assigned equal weights. 13. Alberto Portugal-Perez and John S. Wilson, demonstrate how competitiveness is a 4. See Simeon Djankov, Darshini Manraj, Caralee “Export Performance and Trade Facilitation McLiesh and Rita Ramalho, “Doing Business Reform: Hard and Soft Infrastructure,” World global driver of economic growth. The Indicators: Why Aggregate, and How to Do Development 40, no. 7 (2011): 1295–1307. organization also uses Doing Business It” (World Bank, Washington, DC, 2005). 14. Caroline Freund and Nadia Rocha, “What indicators in four other indices, which Principal components and unobserved Constrains Africa’s Exports?” World Bank components methods yield a ranking nearly Economic Review 25, no. 3 (2011): 361–86. measure trade facilitation, technological identical to that from the simple average ABOUT DOING BUSINESS AND DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA 95 15. Simeon Djankov, Caroline Freund and Cong S. Data Catalog; the Heritage Foundation’s Pham, “Trading on Time,” Review of Economics Index of Economic Freedom; the World and Statistics 92, no. 1 (2010): 166–73. Economic Forum’s Global Competitiveness 16. Christian Volpe Martincus, Jeronimo Carballo Index, Enabling Trade Index, Networked and Alejandro Graziano, “Customs,” Journal of Readiness Index (jointly with INSEAD), International Economics 96 (2015): 119–37. Human Capital Index, and Travel and 17. Caroline Freund and Bineswaree Bolaky, Tourism Competitiveness Index; INSEAD’s “Trade, Regulations, and Income,” Journal of Global Talent Competitiveness Index and Development Economics 87 (2008): 309–21. Global Innovation Index (jointly with Cornell 18. Mary Amiti and Amit K. Khandelwal, “Import University and the World Intellectual Competition and Quality Upgrading,” Review Property Organization); the Fraser Institute’s of Statistics and Economics 95, no. 2 (2011): Economic Freedom of the World; KPMG’s 476–90. Change Readiness Index; Citi and Imperial 19. Adrian Corcoran and Robert Gillanders, College London’s Digital Money Index; the “Foreign Direct Investment and the Ease of International Institute for Management Doing Business,” Review of World Economics Development’s World Competitiveness 151, no. 1 (2015): 103–26. Yearbook; DHL’s Global Connectedness 20. Jonathan Munemo, “Business Start-Up Index; PwC’s Paying Taxes 2016: The Global Regulations and the Complementarity Picture; and the Legatum Institute’s Legatum between Foreign and Domestic Investment,” Prosperity Index. Review of World Economics 150, no. 4 (2014): 32. For more on the Heritage Foundation’s Index 745–61. of Economic Freedom, see the website at 21. Pehr-Johan Norbäck, Lars Persson and https://www.heritage.org/index. Robin Douhan, “Entrepreneurship Policy and Globalization,” Journal of Development Economics 110 (2014): 22–38. 22. Xavier Giné and Inessa Love, “Do Reorganization Costs Matter for Efficiency? Evidence from a Bankruptcy Reform in Colombia,” Journal of Law and Economics 53, no. 4 (2010): 833–64. 23. Inessa Love, María Soledad Martínez Pería and Sandeep Singh, “Collateral Registries for Movable Assets: Does Their Introduction Spur Firms’ Access to Bank Finance?” Policy Research Working Paper 6477 (World Bank, Washington, DC, 2013). 24. Sujata Visaria, “Legal Reform and Loan Repayment: The Microeconomic Impact of Debt Recovery Tribunals in India,” American Economic Journal: Applied Economics 1, no. 3 (2009): 59–81. 25. Thorsten Beck, Chen Lin and Yue Ma, “Why Do Firms Evade Taxes? The Role of Information Sharing and Financial Sector Outreach,” Journal of Finance 69 (2014): 763–817. 26. Stijn Claessens, Kenichi Ueda and Yishay Yafeh, “Institutions and Financial Frictions: Estimating with Structural Restrictions on Firm Value and Investment,” Journal of Development Economics 110 (2014): 107–22. 27. Joana Monteiro and Juliano J. Assunção, “Coming Out of the Shadows? Estimating the Impact of Bureaucracy Simplification and Tax Cut on Formality in Brazilian Microenterprises,” Journal of Development Economics 99 (2012): 105–15. 28. Martina Lawless, “Do Complicated Tax Systems Prevent Foreign Direct Investment?” Economica 80, no. 317 (2013): 1–22. 29. Daiji Kawaguchi and Tetsushi Murao, “Labor- Market Institutions and Long-Term Effects of Youth Unemployment,” Journal of Money, Credit and Banking 46, S2 (2014): 95–116. 30. Claudio Montenegro and Carmen Pagés, “Who Benefits from Labor Market Regulations?” Policy Research Working Paper 3143 (World Bank, Washington, DC, 2003). 31. The 17 data projects or indices are the Millennium Challenge Corporation’s Open 96 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Data Notes T he indicators presented and questionnaires for the specific study in data collection, comparisons and bench- analyzed in Doing Business in the Croatia, the Czech Republic, Portugal marks are valid across locations. Finally, European Union 2018: Croatia, and Slovakia and translated them the data not only highlight the extent of the Czech Republic, Portugal and Slovakia into Croatian, Czech, Portuguese and specific regulatory obstacles to business measure business regulation and the pro- Slovak. The questionnaires use a simple but also identify their source and point to tection of property rights as well as their business case to ensure comparabil- what might be reformed. effect on businesses, especially small and ity across locations and economies and medium-size domestic firms. First, the over time—with assumptions about the indicators document the complexity of legal form of the business, its size, its LIMITS TO WHAT IS regulation, such as the number of proce- location and the nature of its operations. MEASURED dures to start a business or to register a Questionnaires were administered to transfer of commercial property. Second, local experts, including lawyers, busi- The Doing Business methodology has four they gauge the time and cost to achieve ness consultants, architects, engineers, limitations that should be considered a regulatory goal or comply with regula- public officials, magistrates and other when interpreting the data. First, the data tion, such as the time and cost to enforce professionals routinely administering or often focus on a specific business form— a contract. Third, they measure the extent advising on legal and regulatory require- generally a limited liability company of legal protections, for example, the pro- ments. These experts had several rounds (or its legal equivalent) of a specified tections of property rights. of interaction with the project team, size—and may not be representative of involving conference calls, written cor- the regulation on other businesses (for This report presents Doing Business respondence and visits by the team. The example, sole proprietorships). Second, indicators for 25 cities in Croatia, the data from questionnaires were subjected transactions described in a standardized Czech Republic, Portugal and Slovakia. to numerous rounds of verification, case scenario refer to a specific set of The data for all sets of indicators in Doing leading to revisions or expansions of the issues and may not represent the full Business in the European Union 2018: information collected. set of issues that a business encounters. Croatia, the Czech Republic, Portugal and Third, the measures of time involve Slovakia are current as of February 15, The Doing Business methodology offers an element of judgment by the expert 2018. The data for 186 other economies several advantages. It is transparent, respondents. When sources indicate used for comparison are based on using factual information about what different estimates, the time indicators the indicators in Doing Business 2018: laws and regulations say and allowing reported in Doing Business represent Reforming to Create Jobs, the 15th in a multiple interactions with local respon- the median values of several responses series of annual reports published by the dents to clarify potential misinterpreta- given under the assumptions of the World Bank Group. tions of questions. Having representative standardized case. samples of respondents is not an issue; Doing Business is not a statistical survey, Finally, the methodology assumes that a METHODOLOGY and the texts of the relevant laws and business has full information on what is regulations are collected and answers required and does not waste time when The data for Doing Business in the checked for accuracy. The methodology completing procedures. In practice, European Union 2018: Croatia, the Czech is inexpensive and easily replicable, so completing a procedure may take Republic, Portugal and Slovakia were col- data can be collected in a large sample longer if the business lacks information lected in a standardized way. To start, of locations and economies. Because or is unable to follow up promptly. the team customized the Doing Business standard assumptions are used in the Alternatively, the business may choose to DATA NOTES 97 Economy characteristics Gross national income per capita Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia relies on 2016 income per capita data as published in the World Bank’s World Development Indicators 2017. Income is calculated using the Atlas method (in current U.S. dollars). For cost indicators expressed as a percentage of income per capita, 2016 gross national income (GNI) per capita in current U.S. dollars is used as the denominator. Croatia’s income per capita for 2016 is $12,110 (HRK 79,803), the Czech Republic’s is $17,570 (CZK 420,720), Portugal’s is $19,850 (EUR 17,544), and Slovakia’s is $16,810 (EUR 14,857). Region and income group Doing Business uses the World Bank regional and income group classifications, available at http://data.worldbank.org/about /country-and-lending-groups. Regional averages presented in figures and tables in Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia include economies from all income groups (low, lower middle, upper middle and high income). Exchange rates The exchange rates for the U.S. dollar used in Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia are as follows: $1 = 6.5899 Croatian kunas (HRK); $1 = 23.9454 Czech koruny (CZK); and $1 = 0.8838 euros (EUR), the currency used in Portugal and Slovakia. The exchange rates for the euro used in the report are the European Central Bank rates as of February 15, 2018: EUR 1 = CZK 25.37; and EUR 1 = HRK 7.44. disregard some burdensome procedures. the simple average of the distance to in all respects except that one company For both reasons the time delays reported frontier scores for each of the component is owned by five married women and the in Doing Business would differ from the indicators (figure 8.2). The distance to other by five married men. The distance recollection of entrepreneurs reported frontier score shows the distance of an to frontier score for each indicator is the in the World Bank Enterprise Surveys or economy or location to the “frontier,” average of the scores obtained for each other firm-level surveys. which is derived from the most efficient of the component indicators for both of practice or highest score achieved on these standardized companies. each indicator. STARTING A BUSINESS After a study of laws, regulations and Two types of local limited liability compa- publicly available information on busi- Doing Business records all procedures nies are considered under the starting a ness entry, a detailed list of procedures officially required, or commonly done business methodology. They are identical is developed, along with the time and in practice, for an entrepreneur to start up and formally operate an industrial or commercial business, as well as FIGURE 8.1  What are the time, cost, paid-in minimum capital and number of procedures to get a local limited liability company up and running? the time and cost to complete these procedures and the paid-in minimum Cost capital requirement (figure 8.1). These (% of income per capita) procedures include the processes Formal operation entrepreneurs undergo when obtaining all necessary approvals, licenses and Paid-in permits and completing any required $ Number of minimum capital procedures notifications, verifications or inscriptions for the company and employees with relevant authorities. Entrepreneur The ranking of locations on the ease of Time Preregistration Registration, Postregistration (days) starting a business is determined by incorporation sorting their distance to frontier scores for starting a business. These scores are 98 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA FIGURE 8.2  Starting a business: getting incorporation lawyers or the statistical between company founders or company a local limited liability company up and office. officers and employees are not counted running ƒƒ Operates in the selected city. as procedures. Procedures that must be Rankings are based on distance to ƒƒ Is 100% domestically owned and has completed in the same building but in frontier scores for four indicators five owners, none of whom is a legal different offices or at different counters 25% Time 25% Cost entity. are counted as separate procedures. If Preregistration, As % of income ƒƒ Has start-up capital of 10 times founders have to visit the same office registration and per capita, no postregistration bribes included income per capita. several times for different sequential (in calendar days) ƒƒ Performs general industrial or procedures, each is counted separately. 12.5% 12.5% commercial activities, such as the The founders are assumed to complete women men production or sale to the public of all procedures themselves, without 12.5% men 12.5% women products or services. The business middlemen, facilitators, accountants or 12.5% 25% does not perform foreign trade lawyers, unless the use of such a third women Paid-in activities and does not handle party is mandated by law or solicited minimum 12.5% capital men products subject to a special tax by the majority of entrepreneurs. regime, for example, liquor or tobacco. If the services of professionals are 25% Paid-in 25% Procedures minimum capital It is not using heavily polluting required, procedures conducted by such Procedures are Funds deposited in a production processes. professionals on behalf of the company completed when bank or with a notary ƒƒ Leases the commercial plant or offices are counted as separate procedures. final document before registration (or is received up to three months after and is not a proprietor of real estate. Each electronic procedure is counted as incorporation), as % of income per capita The amount of the annual lease for the a separate procedure. Obtaining approval office space is equivalent to income from a spouse to own a business or leave per capita. The size of the entire office the home is considered a procedure if it cost to comply with each procedure space is approximately 929 square is required by law or if by failing to do so under normal circumstances and the meters (10,000 square feet). an individual will suffer consequences paid-in minimum capital requirement. ƒƒ Does not qualify for investment under the law, such as the loss of rights Subsequently, local incorporation law- incentives or any special benefits. to financial maintenance. Documents yers, notaries and government officials ƒƒ Has at least 10 and up to 50 employees or permissions required for only one complete and verify the data. one month after the commencement gender for registering and operating a of operations, all of them domestic company, opening a bank account or Information is also collected on the nationals. obtaining a national identification card sequence in which procedures are to ƒƒ Has a turnover of at least 100 times are considered additional procedures. be completed and whether procedures income per capita. may be carried out simultaneously. It is ƒƒ Has a company deed 10 pages long. Both pre- and postincorporation assumed that any required information is procedures that are officially required readily available and that the entrepreneur The owners: or commonly done in practice for an will pay no bribes. If answers by local ƒƒ Have reached the legal age of majority entrepreneur to formally operate a experts differ, inquiries continue until the and are capable of making decisions business are recorded (table 8.1). Any data are reconciled. as an adult. If there is no legal age of interaction with an external party within majority, they are assumed to be 30 three months of registration is considered To make the data comparable across years old. a procedure except value added tax locations, several assumptions about the ƒƒ Are sane, competent and in good or goods and services tax registration, businesses and the procedures are used. health and have no criminal record. which is counted whenever the assumed ƒƒ Are married and their marriages are turnover exceeds the determined Assumptions about the business monogamous and registered with the threshold. The business: authorities. ƒƒ Is a limited liability company (or its Procedures required for official cor- legal equivalent). If there is more than Procedures respondence or transactions with public one type of limited liability company A procedure is defined as any interaction agencies are also included. For example, in the economy, the limited liability of the company founders with external if a company seal or stamp is required form most common among domestic parties (for example, government on official documents, such as tax dec- firms is chosen. Information on the agencies, lawyers, auditors or notaries) or larations, obtaining the seal or stamp is most common form is obtained from spouses (if legally required). Interactions counted. Similarly, if a company must DATA NOTES 99 TABLE 8.1  What do the starting Procedures that the company undergoes are required by law or commonly used a business indicators measure? to connect to electricity, water, gas or in practice. Fees for purchasing and waste disposal services are not included legalizing company books are included Procedures to legally start and formally operate a company (number) in the starting a business indicators. if these transactions are required by law. Preregistration (for example, name verification or Although value added tax registration reservation, notarization) Time can be counted as a separate procedure, Registration in the selected city Time is recorded in calendar days. value added tax is not part of the Postregistration (for example, social security The measure captures the median incorporation cost. The company law, the registration, company seal) duration that incorporation lawyers commercial code, and specific regulations Obtaining approval from spouse to start a or notaries indicate is necessary in and fee schedules are used as sources business, to leave the home to register the practice to complete a procedure with for calculating costs. In the absence of company, or to open a bank account minimum follow-up with government fee schedules, a government officer’s Obtaining any gender-specific document for company registration and operation, national agencies and no unofficial payments. estimate is taken as an official source. identification card or the opening of a bank It is assumed that the minimum time In the absence of a government officer’s account required for each procedure is one estimate, estimates by incorporation Time required to complete each procedure day, except for procedures that can be lawyers are used. If several incorporation (calendar days) fully completed online, for which the lawyers provide different estimates, the Does not include time spent gathering information time required is recorded as half a day. median reported value is applied. In all Each procedure starts on a separate day Although procedures may take place cases the cost excludes bribes. (two procedures cannot start on the same day)— simultaneously, they cannot start on though procedures that can be fully completed the same day (that is, simultaneous Paid-in minimum capital online are an exception to this rule procedures start on consecutive days), The paid-in minimum capital requirement Registration process considered completed once final incorporation document is received or again with the exception of procedures reflects the amount that the entrepreneur company can officially start operating that can be fully completed online. needs to deposit in a bank or with a notary No prior contact with officials takes place A registration process is considered before registration or up to three months Cost required to complete each procedure completed once the company has after incorporation and is recorded as a (% of income per capita) received the final incorporation percentage of the economy’s income per Official costs only, no bribes document or can officially commence capita. The amount is typically specified No professional fees unless services required by business operations. If a procedure can in the commercial code or the company law or commonly used in practice be accelerated legally for an additional law. Many economies require minimum Paid-in minimum capital (% of income per cost, the fastest procedure is chosen capital but allow businesses to pay only a capita) if that option is more beneficial to part of it before registration, with the rest Funds deposited in a bank or with a notary the location’s ranking. For obtaining a to be paid after the first year of operation. before registration (or up to three months after incorporation) spouse’s approval, it is assumed that In Turkey in June 2017, for example, permission is granted at no additional the minimum capital requirement was open a bank account in order to complete cost unless the permission needs to 10,000 Turkish liras, of which one-fourth any subsequent procedure—such as reg- be notarized. It is assumed that the needed to be paid before registration. istering for value added tax or showing entrepreneur does not waste time and The paid-in minimum capital recorded proof of minimum capital deposit—this commits to completing each remaining for Turkey is therefore 2,500 Turkish liras, transaction is included as a procedure. procedure without delay. The time that or 7.8% of income per capita. Shortcuts are counted only if they fulfill the entrepreneur spends on gathering four criteria: they are legal, they are avail- information is not taken into account. The data details on starting a business can able to the general public, they are used It is assumed that the entrepreneur is be found at http://www.doingbusiness by the majority of companies, and avoid- aware of all entry requirements and their .org. This methodology was developed by ing them causes delays. sequence from the beginning but has had Simeon Djankov, Rafael La Porta, Florencio no prior contact with any of the officials López-de-Silanes and Andrei Shleifer (“The Only procedures required of all businesses involved. Regulation of Entry,” Quarterly Journal of are covered. Industry-specific procedures Economics 117, no. 1 [2002]: 1–37) and is are excluded. For example, procedures to Cost adopted here with minor changes. comply with environmental regulations Cost is recorded as a percentage of the are included only when they apply economy’s income per capita. It includes to all businesses conducting general all official fees and fees for legal or commercial or industrial activities. professional services if such services 100 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA ƒƒ Obtaining all necessary clearances, FIGURE 8.3  Dealing with construction DEALING WITH licenses, permits and certificates. permits: efficiency and quality of building CONSTRUCTION PERMITS ƒƒ Submitting all required notifications. regulation ƒƒ Requesting and receiving all necessary Rankings are based on distance to Doing Business records all procedures inspections (unless completed by a frontier scores for four indicators required for a business in the construction private, third-party inspector). industry to build a warehouse along Days to comply Cost to comply with formalities with formalities, with the time and cost to complete Doing Business also records procedures to build a as % of warehouse warehouse value each procedure. In addition, Doing for obtaining connections for water Business compiles the building quality and sewerage. Procedures necessary control index, evaluating the quality to register the warehouse so that it can of building regulations, the strength of be used as collateral or transferred to 25% 25% Time Cost quality control and safety mechanisms, another entity are also counted. 25% 25% liability and insurance regimes, and Procedures Building quality professional certification requirements. To make the data comparable across control index Information is collected through a locations, several assumptions about the questionnaire administered to experts construction company, the warehouse Steps to comply Quality of building with formalities; regulation and its in construction licensing, including project and the utility connections are completed when implementation architects, civil engineers, construction used. final document is received lawyers, construction firms, utility service providers and public officials Assumptions about the who deal with building regulations, construction company necessary to obtain construction including approvals, permit issuance and The construction company (BuildCo): permits and approvals. inspections. ƒƒ Is a limited liability company (or its ƒƒ Has a licensed architect and a legal equivalent). licensed engineer, both registered The ranking of locations on the ease ƒƒ Operates in the selected city. with the local association of architects of dealing with construction permits is ƒƒ Is 100% domestically and privately or engineers. BuildCo is not assumed determined by sorting their distance owned. to have any other employees who are to frontier scores for dealing with ƒƒ Has five owners, none of whom is a technical or licensed experts, such as construction permits. These scores are legal entity. geological or topographical experts. the simple average of the distance to ƒƒ Is fully licensed and insured to carry ƒƒ Has paid all taxes and taken out all frontier scores for each of the component out construction projects, such as necessary insurance applicable to its indicators (figure 8.3). building warehouses. general business activity (for example, ƒƒ Has 60 builders and other employees, accident insurance for construction EFFICIENCY OF all of them nationals with the technical workers and third-person liability CONSTRUCTION PERMITTING expertise and professional experience insurance). Doing Business divides the process FIGURE 8.4  What are the time, cost and number of procedures to comply with of building a warehouse into distinct formalities to build a warehouse? procedures in the questionnaire and solicits data for calculating the time and Cost (% of warehouse value) cost to complete each procedure (figure 8.4). These procedures include but are Completed not limited to: warehouse ƒƒ Obtaining and submitting to the authorities all relevant project-specific Number of documents (for example, building procedures plans, site maps and certificates of urbanism). A business in the ƒƒ Hiring external third-party construction industry Time supervisors, engineers or inspectors (days) Preconstruction Construction Postconstruction (if necessary). and utilities DATA NOTES 101 ƒƒ Owns the land on which the ware- Assumptions about the utility counted as procedures. Procedures that house will be built and will sell the connections the company undergoes to connect the warehouse upon its completion. The water and sewerage connections: warehouse to water and sewerage are ƒƒ Will be 150 meters (492 feet) from included. All procedures that are legally Assumptions about the the existing water source and sewer required, or that are done in practice by warehouse tap. If there is no water delivery the majority of companies, to build a The warehouse: infrastructure in the location, a warehouse are counted, even if they may ƒƒ Will be used for general storage borehole will be dug. If there is no be avoided in exceptional cases. This activities, such as storage of books or sewerage infrastructure, a septic tank includes obtaining technical conditions stationery. The warehouse will not be in the smallest size available will be for electricity or clearance of the electrical used for any goods requiring special installed or built. plans only if they are required to obtain a conditions, such as food, chemicals or ƒƒ Will not require water for fire building permit (table 8.2). pharmaceuticals. protection reasons; a fire extinguishing ƒƒ Will have two stories, both above system (dry system) will be used Time ground, with a total constructed area instead. If a wet fire protection system Time is recorded in calendar days. The of approximately 1,300.6 square is required by law, it is assumed that measure captures the median duration that meters (14,000 square feet). Each the water demand specified below local experts indicate is necessary to com- floor will be 3 meters (9 feet, 10 also covers the water needed for fire plete a procedure in practice. It is assumed inches) high. protection. that the minimum time required for each ƒƒ Will have road access and be located ƒƒ Will have an average water use of procedure is one day, except for proce- in the periurban area of the selected 662 liters (175 gallons) a day and an dures that can be fully completed online, city (that is, on the fringes of the city average wastewater flow of 568 liters for which the time required is recorded as but still within its official limits). (150 gallons) a day. Will have a peak half a day. Although procedures may take ƒƒ Will not be located in a special water use of 1,325 liters (350 gallons) place simultaneously, they cannot start economic or industrial zone. a day and a peak wastewater flow of on the same day (that is, simultaneous ƒƒ Will be located on a land plot of 1,136 liters (300 gallons) a day. procedures start on consecutive days), approximately 929 square meters ƒƒ Will have a constant level of water (10,000 square feet) that is 100% demand and wastewater flow TABLE 8.2  What do the indicators on owned by BuildCo and is accurately throughout the year. the efficiency of construction permitting registered in the cadastre and land ƒƒ Will be 1 inch in diameter for the water measure? registry. connection and 4 inches in diameter Procedures to legally build a warehouse ƒƒ Is valued at 50 times income per for the sewerage connection. (number) capita. Submitting all relevant documents and obtaining ƒƒ Will be a new construction (there Procedures all necessary clearances, licenses, permits and certificates was no previous construction on the A procedure is any interaction of the land), with no trees, natural water company’s employees or managers, Submitting all required notifications and receiving all necessary inspections sources, natural reserves or historical or any party acting on behalf of the Obtaining utility connections for water and monuments of any kind on the plot. company, with external parties, including sewerage ƒƒ Will have complete architectural and government agencies, notaries, the land Registering the warehouse after its completion technical plans prepared by a licensed registry, the cadastre, utility companies (if required for use as collateral or for transfer of architect. If preparation of the plans and public inspectors—and the hiring of the warehouse) requires such steps as obtaining external private inspectors and technical Time required to complete each procedure (calendar days) further documentation or getting prior experts where needed. Interactions approvals from external agencies, between company employees, such as Does not include time spent gathering information these are counted as procedures. development of the warehouse plans and Each procedure starts on a separate day— ƒƒ Will include all technical equipment inspections conducted by employees, though procedures that can be fully completed required to be fully operational. are not counted as procedures. However, online are an exception to this rule ƒƒ Will take 30 weeks to construct interactions with external parties that are Procedure considered completed once final required for the architect to prepare the document is received (excluding all delays due to administrative and regulatory plans and drawings (such as obtaining No prior contact with officials requirements). topographic or geological surveys), Cost required to complete each procedure (% of warehouse value) or to have such documents approved or stamped by external parties, are Official costs only, no bribes 102 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA again with the exception of procedures Quality of building regulations TABLE 8.3  What do the indicators on that can be fully completed online. If a index building quality control measure? procedure can be accelerated legally for The quality of building regulations index Quality of building regulations index (0–2) an additional cost and the accelerated has two components: Accessibility of building regulations procedure is used by the majority of com- ƒƒ Whether building regulations are panies, the fastest procedure is chosen. It easily accessible. A score of 1 is Clarity of requirements for obtaining a building permit is assumed that BuildCo does not waste assigned if building regulations Quality control before construction index time and commits to completing each (including the building code) or (0–1) remaining procedure without delay. The regulations dealing with construction Whether licensed or technical experts approve time that BuildCo spends on gathering permits are available on a website building plans information is not taken into account. It is that is updated as new regulations are Quality control during construction index assumed that BuildCo is aware of all build- passed; 0.5 if the building regulations (0–3) ing requirements and their sequence from are available free of charge (or for a Types of inspections legally mandated during the beginning. nominal fee) at the relevant permit- construction issuing authority; 0 if the building Implementation of legally mandated inspections in practice Cost regulations must be purchased or if Quality control after construction index Cost is recorded as a percentage of the they are not made easily accessible (0–3) warehouse value (assumed to be 50 anywhere. Final inspection legally mandated after times income per capita). Only official ƒƒ Whether the requirements for construction costs are recorded. All the fees associated obtaining a building permit are clearly Implementation of legally mandated final with completing the procedures to legally specified. A score of 1 is assigned if inspection in practice build a warehouse are recorded, including the building regulations (including Liability and insurance regimes index (0–2) those associated with obtaining land use the building code) or any accessible Parties held legally liable for structural flaws after approvals and preconstruction design website, brochure or pamphlet clearly building occupancy clearances; receiving inspections before, specifies the list of required documents Parties legally mandated to obtain insurance to during and after construction; obtaining to submit, the fees to be paid and all cover structural flaws after building occupancy or insurance commonly obtained in practice utility connections; and registering required preapprovals of the drawings Professional certifications index (0–4) the warehouse property. Nonrecurring or plans (for example, electrical, water taxes required for the completion of the and sewerage, or environmental Qualification requirements for individual who approves building plans warehouse project are also recorded. clearances) by the relevant agencies; Qualification requirements for individual who Sales taxes (such as value added tax) 0 if none of these sources specify supervises construction or conducts inspections or capital gains taxes are not recorded. any of these requirements or if these Building quality control index (0–15) Nor are deposits that must be paid up sources specify fewer than the three Sum of the quality of building regulations, quality front and are later refunded. The building requirements mentioned here. control before construction, quality control during code, information from local experts, and construction, quality control after construction, specific regulations and fee schedules are The index ranges from 0 to 2, with liability and insurance regimes, and professional certifications indices used as sources for costs. If several local higher values indicating clearer and partners provide different estimates, the more transparent building regulations. median reported value is used. In New Zealand, for example, all relevant Quality control before legislation can be found on an official construction index BUILDING QUALITY CONTROL government website (a score of 1). The The quality control before construction legislation specifies the list of required index has one component: The building quality control index is documents to submit, the fees to be ƒƒ Whether by law a licensed architect based on six other indices—the quality paid, and all required preapprovals of or licensed engineer is part of the of building regulations, quality control the drawings or plans by the relevant committee or team that reviews and before construction, quality control agencies (a score of 1). Adding these approves building permit applications during construction, quality control after numbers gives New Zealand a score of and whether that person has the construction, liability and insurance 2 on the quality of building regulations authority to refuse an application if regimes, and professional certifications index. the plans are not in compliance with indices (table 8.3). The indicator is based the building regulations. A score of 1 on the same case study assumptions as is assigned if the national association the measures of efficiency. of architects or engineers (or its equivalent) must review the building DATA NOTES 103 plans, if an independent firm or expert score of 0 is assigned if a government mandated by law after construction who is a licensed architect or engineer agency is legally mandated to conduct and no third party is required to verify must review the plans, if the architect unscheduled inspections or if no that the building has been built in or engineer who prepared the plans technical inspections are mandated accordance with the approved plans must submit an attestation to the by law. and existing building regulations. permit-issuing authority stating that ƒƒ Whether inspections during ƒƒ Whether the final inspection is the plans are in compliance with the construction are implemented in implemented in practice. A score of building regulations or if a licensed practice. A score of 1 is assigned if 1 is assigned if the legally mandated architect or engineer is part of the the legally mandated inspections final inspection after construction committee or team that approves the during construction always occur in always occurs in practice or if a plans at the relevant permit-issuing practice; 0 if the legally mandated supervising engineer or firm attests authority; 0 if no licensed architect or inspections do not occur in practice, that the building has been built in engineer is involved in the review of if the inspections occur most of the accordance with the approved plans the plans to ensure their compliance time but not always or if inspections and existing building regulations; 0 if with the building regulations. are not mandated by law regardless of the legally mandated final inspection whether or not they commonly occur does not occur in practice, if the legally The index ranges from 0 to 1, with higher in practice. mandated final inspection occurs values indicating better quality control most of the time but not always or in the review of the building plans. In The index ranges from 0 to 3, with higher if a final inspection is not mandated Rwanda, for example, the City Hall in values indicating better quality control by law regardless of whether or not it Kigali must review the building permit during the construction process. In commonly occurs in practice. application, including the plans and Antigua and Barbuda, for example, the drawings, and both a licensed architect Development Control Authority is legally The index ranges from 0 to 3, with and a licensed engineer are part of mandated to conduct phased inspections higher values indicating better quality the team that reviews the plans and under the Physical Planning Act of 2003 control after the construction process. drawings. Rwanda therefore receives a (a score of 1). However, the Development In Haiti, for example, the Municipality score of 1 on the quality control before Control Authority rarely conducts these of Port-au-Prince is legally mandated construction index. inspections in practice (a score of 0). to conduct a final inspection under the Adding these numbers gives Antigua and national Building Code of 2012 (a score Quality control during Barbuda a score of 1 on the quality control of 2). However, most of the time the final construction index during construction index. inspection does not occur in practice (a The quality control during construction score of 0). Adding these numbers gives index has two components: Quality control after Haiti a score of 2 on the quality control ƒƒ Whether inspections are mandated by construction index after construction index. law during the construction process. The quality control after construction A score of 2 is assigned if an in-house index has two components: Liability and insurance regimes supervising engineer (that is, an ƒƒ Whether a final inspection is index employee of the building company), mandated by law in order to verify The liability and insurance regimes index an external supervising engineer that the building was built in has two components: or a government agency is legally accordance with the approved plans ƒƒ Whether any parties involved in mandated to conduct risk-based and existing building regulations. A the construction process are held inspections. A score of 1 is assigned score of 2 is assigned if an in-house legally liable for latent defects such if an in-house supervising engineer supervising engineer (that is, an as structural flaws or problems in (that is, an employee of the building employee of the building company), the building once it is in use. A score company), an external supervising an external supervising engineer or of 1 is assigned if at least two of the engineer or an external inspections an external inspections firm is legally following parties are held legally liable firm is legally mandated to conduct mandated to verify that the building for structural flaws or problems in the technical inspections at different has been built in accordance with the building once it is in use: the architect stages during the construction of the approved plans and existing building or engineer who designed the plans building or if a government agency regulations or if a government agency for the building, the professional or is legally mandated only to conduct is legally mandated to conduct a final agency that conducted technical technical inspections at different inspection upon completion of the inspections, or the construction stages during the construction. A building; 0 if no final inspection is company; 0.5 if only one of the parties 104 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA is held legally liable for structural The index ranges from 0 to 2, with higher ƒƒ The qualification requirements for the flaws or problems in the building values indicating more stringent latent professional who conducts the techni- once it is in use; 0 if no party is held defect liability and insurance regimes. cal inspections during construction. A legally liable for structural flaws or In Madagascar, for example, under score of 2 is assigned if the regulation problems in the building once it is in article 1792 of the Civil Code both the mandates that the professional must use, if the project owner or investor architect who designed the plans and the have a minimum number of years of is the only party held liable, if liability construction company are held legally practical experience, must have a is determined in court or if liability is liable for latent defects for a period of 10 university degree (a minimum of a stipulated in a contract. years after the completion of the building bachelor’s) in engineering and must ƒƒ Whether any parties involved in (a score of 1). However, there is no legal also either be a registered member the construction process are legally requirement for any party to obtain a of the national order of engineers or required to obtain a latent defect decennial liability insurance policy to pass a qualification exam. A score of 1 liability—or decennial (10-year) cover structural defects, nor do most is assigned if the regulation mandates liability—insurance policy to cover parties obtain such insurance in practice that the professional must have a possible structural flaws or problems (a score of 0). Adding these numbers university degree (a minimum of a in the building once it is in use. A gives Madagascar a score of 1 on the bachelor’s) in engineering and must score of 1 is assigned if the architect liability and insurance regimes index. also either have a minimum number or engineer who designed the plans of years of practical experience or be for the building, the professional or Professional certifications index a registered member of the national agency that conducted the technical The professional certifications index has order (association) of engineers or inspections, the construction two components: architects or pass a qualification company, or the project owner or ƒƒ The qualification requirements for exam. A score of 0 is assigned if the investor is required by law to obtain the professional responsible for regulation mandates that the profes- either a decennial liability insurance verifying that the architectural plans sional must meet only one of the policy or a latent defect liability or drawings are in compliance with requirements, if they mandate that insurance policy to cover possible the building regulations. A score the professional must meet two of structural flaws or problems in of 2 is assigned if this professional the requirements but neither of the the building once it is in use or if a must have a minimum number of two is to have a university degree, or if decennial liability insurance policy or a years of practical experience, must no national or state regulation deter- latent defect liability insurance policy have a university degree (a minimum mines the professional’s qualification is commonly obtained in practice by of a bachelor’s) in architecture or requirements. the majority of any of these parties engineering and must also either be even if not required by law. A score a registered member of the national The index ranges from 0 to 4, with higher of 0 is assigned if no party is required order (association) of architects or values indicating greater professional by law to obtain either a decennial engineers or pass a qualification certification requirements. liability insurance policy or a latent exam. A score of 1 is assigned if the defect liability insurance policy and professional must have a university In Albania, for example, the professional such insurance is not commonly degree (a minimum of a bachelor’s) conducting technical inspections during obtained in practice by any party, if the in architecture or engineering and construction must have a minimum requirement to obtain an insurance must also either have a minimum number of years of experience as well as a policy is stipulated in a contract, if number of years of practical relevant university degree and must also be any party must obtain a professional experience or be a registered member a registered architect or engineer (a score insurance or all-risk insurance policy of the national order (association) of 2). However, the professional responsible to cover the safety of workers or any of architects or engineers or pass a for verifying that the architectural plans other defects during construction qualification exam. A score of 0 is or drawings are in compliance with but not a decennial liability insurance assigned if the professional must building regulations must only have a or latent defect liability insurance meet only one of the requirements, minimum number of years of experience policy that would cover defects after if the professional must meet two of and a university degree in architecture or the building is in use, or if any party the requirements but neither of the engineering (a score of 1). Adding these is required to pay for any damages two is to have a university degree, numbers gives Albania a score of 3 on the caused on their own without having or if the professional is subject to no professional certifications index. to obtain an insurance policy. qualification requirements. DATA NOTES 105 Building quality control index In addition, Doing Business compiles the FIGURE 8.6  Getting electricity: The building quality control index is reliability of supply and transparency of efficiency, reliability and transparency the sum of the scores on the quality tariffs index (included in the aggregate of building regulations, quality control distance to frontier score and ranking Rankings are based on distance to before construction, quality control on the ease of doing business) and frontier scores for four indicators during construction, quality control after measures the price of electricity (omitted Days to obtain Cost to obtain a construction, liability and insurance from these aggregate measures). The an electricity connection, as % of connection income per capita regimes, and professional certifications reliability of supply and transparency of indices. The index ranges from 0 to 15, tariffs index encompasses quantitative with higher values indicating better data on the duration and frequency of 25% 25% quality control and safety mechanisms in power outages as well as qualitative Time Cost the construction regulatory system. information on the mechanisms put in 25% 25% Procedures Reliability place by the utility for monitoring power of supply and transparency The data details on dealing with construction outages and restoring power supply, the of tariffs permits can be found at http://www. reporting relationship between the utility Steps to file a connection Power outages doingbusiness.org. and the regulator for power outages, the application, prepare and regulatory transparency and accessibility of tariffs a design, complete mechanisms in works, obtain approvals, place to monitor and whether the utility faces a financial go through inspections, and reduce them; GETTING ELECTRICITY deterrent aimed at limiting outages (such install a meter and sign a supply transparency of tariffs as a requirement to compensate custom- contract Doing Business records all procedures ers or pay fines when outages exceed a required for a business to obtain a certain cap). Note: The price of electricity is measured but does permanent electricity connection and not count for the rankings. supply for a standardized warehouse The ranking of locations on the ease (figure 8.5). These procedures include of getting electricity is determined by technical nature of the data. The rest of applications and contracts with electricity sorting their distance to frontier scores the data, including data on the transpar- utilities, all necessary inspections for getting electricity. These scores are ency of tariffs and the procedures for and clearances from the distribution the simple average of the distance to obtaining an electricity connection, are utility and other agencies, and the frontier scores for all the component collected from all market players—the external and final connection works. indicators except the price of electricity electricity distribution utility, electric- The questionnaire divides the process (figure 8.6). ity regulatory agencies and independent of getting an electricity connection into professionals such as electrical engineers, distinct procedures and solicits data for Data on reliability of supply are collected electrical contractors and construction calculating the time and cost to complete from the electricity distribution utilities companies. The electricity distribution each procedure. or regulators, depending on the specific utility consulted is the one serving the area (or areas) where warehouses are located. If there is a choice of distribu- FIGURE 8.5  Doing Business measures the connection process at the level of tion utilities, the one serving the largest distribution utilities number of customers is selected. To make the data comparable across locations, several assumptions about the warehouse, the electricity connection and the monthly consumption are used. Generation Transmission Assumptions about the warehouse Distribution The warehouse: u New connections ƒƒ Is owned by a local entrepreneur. u Network operation and maintenance ƒƒ Is located in the selected city. u Metering and billing ƒƒ Is located in an area where similar Customer warehouses are typically located. In this area a new electricity connection 106 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA is not eligible for a special investment hours a day), with equipment utilized TABLE 8.4 What do the getting promotion regime (offering special at 80% of capacity on average, and electricity indicators measure? subsidization or faster service, for there are no electricity cuts (assumed Procedures to obtain an electricity example). for reasons of simplicity). connection (number) ƒƒ Is located in an area with no physical ƒƒ The monthly energy consumption is Submitting all relevant documents and obtaining constraints. For example, the property 26,880 kilowatt-hours (kWh); hourly all necessary clearances and permits is not near a railway. consumption is 112 kWh. Completing all required notifications and ƒƒ Is a new construction and is being ƒƒ If multiple electricity suppliers exist, receiving all necessary inspections connected to electricity for the first the warehouse is served by the Obtaining external installation works and possibly purchasing material for these works time. cheapest supplier. ƒƒ Has two stories, both above ƒƒ Tariffs effective in March of the Concluding any necessary supply contract and obtaining final supply ground, with a total surface area of current year are used for calculation Time required to complete each procedure approximately 1,300.6 square meters of the price of electricity for the (calendar days) (14,000 square feet). The plot of warehouse. Although March has 31 Is at least one calendar day land on which it is built is 929 square days, for calculation purposes only 30 Each procedure starts on a separate day meters (10,000 square feet). days are used. ƒƒ Is used for the storage of goods. Does not include time spent gathering information Procedures Reflects the time spent in practice, with little Assumptions about the A procedure is defined as any interaction follow-up and no prior contact with officials electricity connection of the company’s employees or its main Cost required to complete each procedure The electricity connection: electrician or electrical engineer (that is, (% of income per capita) ƒƒ Is a permanent one. the one who may have done the internal Official costs only, no bribes ƒƒ Is a three-phase, four-wire Y wiring) with external parties, such Value added tax excluded connection with a subscribed capacity as the electricity distribution utility, Reliability of supply and transparency of of 140 kilovolt-amperes (kVA) with electricity supply utilities, government tariffs index (0–8) a power factor of 1, when 1 kVA = 1 agencies, electrical contractors and Duration and frequency of power outages kilowatt (kW). electrical firms. Interactions between Tools to monitor power outages ƒƒ Has a length of 150 meters. The company employees and steps related Tools to restore power supply connection is to either the low- to the internal electrical wiring, such voltage or the medium-voltage as the design and execution of the Regulatory monitoring of utilities’ performance distribution network and is either internal electrical installation plans, are Financial deterrents aimed at limiting outages overhead or underground, whichever not counted as procedures. Procedures Transparency and accessibility of tariffs is more common in the area where that must be completed with the same Price of electricity (cents per kilowatt-hour) the warehouse is located. utility but with different departments Price based on monthly bill for commercial ƒƒ Requires works that involve the are counted as separate procedures warehouse in case study crossing of a 10-meter-wide road (by (table 8.4). Note: While Doing Business measures the price excavation or overhead lines) but are of electricity, it does not include these data when calculating the distance to frontier score for getting all carried out on public land. There is The company’s employees are assumed electricity or the ranking on the ease of getting electricity. no crossing of other owners’ private to complete all procedures themselves property because the warehouse has unless the use of a third party is mandated access to a road. (for example, if only an electrician Time ƒƒ Includes only negligible length in the registered with the utility is allowed to Time is recorded in calendar days. The customer’s private domain. submit an application). If the company measure captures the median duration ƒƒ Does not require work to install the can, but is not required to, request the that the electricity utility and experts indi- internal wiring of the warehouse. This services of professionals (such as a cate is necessary in practice, rather than has already been completed up to and private firm rather than the utility for required by law, to complete a procedure including the customer’s service panel the external works), these procedures with minimum follow-up and no extra or switchboard and the meter base. are recorded if they are commonly done. payments. It is assumed that the mini- For all procedures, only the most likely mum time required for each procedure is Assumptions about the monthly cases (for example, more than 50% of one day. Although procedures may take consumption for March the time the utility has the material) and place simultaneously, they cannot start ƒƒ The warehouse operates 30 days a those followed in practice for connecting on the same day (that is, simultaneous month from 9:00 a.m. to 5:00 p.m. (8 a warehouse to electricity are counted. procedures start on consecutive days). DATA NOTES 107 It is assumed that the company does not cover the first monthly consumption bills, Reliability of supply and waste time and commits to completing it is not recorded. To calculate the present transparency of tariffs index each remaining procedure without delay. value of the lost interest earnings, the end- Doing Business uses the system average The time that the company spends on 2016 lending rates from the International interruption duration index (SAIDI) gathering information is not taken into Monetary Fund’s International Financial and the system average interruption account. It is assumed that the com- Statistics are used. In cases where the frequency index (SAIFI) to measure the pany is aware of all electricity connection security deposit is returned with interest, duration and frequency of power outages requirements and their sequence from the difference between the lending rate in each of the selected locations. SAIDI is the beginning. and the interest paid by the utility is used the average total duration of outages over to calculate the present value. the course of a year for each customer Cost served, while SAIFI is the average number Cost is recorded as a percentage of the In some economies the security deposit of service interruptions experienced economy’s income per capita. Costs are can be put up in the form of a bond: the by a customer in a year. Annual data recorded exclusive of value added tax. company can obtain from a bank or an (covering the calendar year) are collected All the fees and costs associated with insurance company a guarantee issued from distribution utility companies and completing the procedures to connect on the assets it holds with that financial national regulators on SAIDI and SAIFI. a warehouse to electricity are recorded, institution. In contrast to the scenario Both SAIDI and SAIFI estimates should including those related to obtaining in which the customer pays the deposit include planned and unplanned outages clearances from government agencies, in cash to the utility, in this scenario the as well as load shedding. applying for the connection, receiving company does not lose ownership control inspections of both the site and the over the full amount and can continue A location is eligible to obtain a score on internal wiring, purchasing material, using it. In return the company will pay the reliability of supply and transparency getting the actual connection works and the bank a commission for obtaining of tariffs index if the utility collects data paying a security deposit. Information the bond. The commission charged may on electricity outages (measuring the from local experts and specific vary depending on the credit standing of average total duration of outages per regulations and fee schedules are used as the company. The best possible credit customer and the average number of sources for costs. If several local partners standing and thus the lowest possible outages per customer) and the SAIDI provide different estimates, the median commission are assumed. Where a bond value is below a threshold of 100 hours reported value is used. In all cases the can be put up, the value recorded for the and the SAIFI value below a threshold of cost excludes bribes. deposit is the annual commission times 100 outages. the five years assumed to be the length Security deposit of the contract. If both options exist, the Because the focus is on measuring the Utilities may require security deposits as cheaper alternative is recorded. reliability of the electricity supply, a a guarantee against the possible failure of location is not eligible to obtain a score customers to pay their consumption bills. In Hong Kong SAR, China, a customer if outages are too frequent or long-lasting For this reason the security deposit for a requesting a 140-kVA electricity for the electricity supply to be considered new customer is most often calculated connection in March 2017 would reliable—that is, if the SAIDI or SAIFI as a function of the customer’s estimated have had to put up a security deposit value exceeds the determined threshold. consumption. of 63,600 Hong Kong dollars (about A location is also not eligible to obtain a $7,850) in cash or check, and the deposit score if data on power outages are not Doing Business does not record the full would have been returned only at the collected or are collected only partially amount of the security deposit. If the end of the contract. The customer could (for example, if data on planned outages deposit is based on the customer’s instead have invested this money at the or load shedding are not included in the actual consumption, this basis is the one prevailing lending rate of 5.0%. Over the calculation of SAIDI and SAIFI) and if assumed in the case study. Rather than the five years of the contract, this would imply the minimum outage time considered for full amount of the security deposit, Doing a present value of lost interest earnings calculation of SAIDI and SAIFI is more Business records the present value of the of 13,760 Hong Kong dollars ($1,700). In than five minutes. losses in interest earnings experienced by contrast, if the customer chose to settle the customer because the utility holds the the deposit with a bank guarantee at an For all locations that meet the criteria as security deposit over a prolonged period, annual rate of 1.5%, the amount lost over determined by Doing Business, a score on in most cases until the end of the contract the five years would be just 4,770 Hong the reliability of supply and transparency (assumed to be after five years). In cases Kong dollars ($590). of tariffs index is calculated on the basis where the security deposit is used to of the following six components: 108 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA ƒƒ What the SAIDI and SAIFI values are. The index ranges from 0 to 8, with higher include load shedding in the calculation If SAIDI and SAIFI are 12 (equivalent values indicating greater reliability of SAIDI and SAIFI. Thus based on the to an outage of one hour each month) of electricity supply and greater criteria established, Suriname cannot or below, a score of 1 is assigned. If transparency of tariffs. In the United receive a score on the index even though SAIDI and SAIFI are 4 (equivalent Kingdom, for example, the distribution the utility uses automated systems for to an outage of one hour each utility company UK Power Networks monitoring outages and restoring power quarter) or below, 1 additional point uses SAIDI and SAIFI metrics to monitor supply and there is transparency around is assigned. Finally, if SAIDI and SAIFI and collect data on power outages. In electricity tariffs. are 1 (equivalent to an outage of one 2016 the average total duration of power hour per year) or below, 1 more point outages in London was 0.326 hours per If an economy issued no electricity is assigned. customer and the average number of connections between June 2016 and June ƒƒ What tools are used by the outages experienced by a customer 2017, or if electricity was not provided distribution utility to monitor power was 0.166. Both SAIDI and SAIFI are during that period, the economy receives outages. A score of 1 is assigned if below the threshold and indicate that a “no practice” mark on the procedures, the utility uses automated tools, such there was less than one outage a year time and cost indicators. In addition, a as the supervisory control and data per customer, for a total duration of less “no practice” economy receives a score acquisition (SCADA) system; 0 if it than one hour. So the economy not only of 0 on the reliability of supply and relies solely on calls from customers meets the eligibility criteria for obtaining transparency of tariffs index even if, for and records and monitors outages a score on the index, it also receives a example, there is regulatory oversight of manually. score of 3 on the first component of the utilities on power interruptions, among ƒƒ What tools are used by the index. The utility uses the automatic others. distribution utility to restore power GE PowerOn Control System to identify supply. A score of 1 is assigned if the faults in the network (a score of 1) and Price of electricity utility uses automated tools, such to restore electricity service (a score Doing Business measures the price of as the SCADA system; 0 if it relies of 1). The Office of Gas and Electricity electricity but does not include these data solely on manual resources for service Markets, an independent national when calculating the distance to frontier restoration, such as field crews or regulatory authority, actively reviews score for getting electricity or the ranking maintenance personnel. the utility’s performance in providing on the ease of getting electricity. The data ƒƒ Whether a regulator—that is, an reliable electricity service (a score of 1) are available on the Doing Business website entity separate from the utility— and requires the utility to compensate (http://www.doingbusiness.org) and are monitors the utility’s performance customers if outages last longer than based on standardized assumptions to on reliability of supply. A score of 1 a maximum period defined by the ensure comparability across economies. is assigned if the regulator performs regulator (a score of 1). Customers are periodic or real-time reviews; 0 if it notified of a change in tariffs ahead The price of electricity is measured does not monitor power outages and of the next billing cycle and can easily in US$ cents per kilowatt-hour. On does not require the utility to report check effective tariffs online (a score the basis of the assumptions about on reliability of supply. of 1). Adding these numbers gives the monthly consumption, a monthly bill ƒƒ Whether financial deterrents exist to United Kingdom a total score of 8 on the for a commercial warehouse in each limit outages. A score of 1 is assigned reliability of supply and transparency of of the selected locations is computed if the utility compensates customers tariffs index. for the month of March. As noted, the when outages exceed a certain cap, warehouse uses electricity 30 days a if the utility is fined by the regulator On the other hand, several economies month, from 9:00 a.m. to 5:00 p.m., so when outages exceed a certain cap or receive a score of 0 on the reliability of different tariff schedules may apply if a if both these conditions are met; 0 if supply and transparency of tariffs index. time-of-use tariff is available. no compensation mechanism of any The reason may be that outages occur kind is available. more than once a month and none of the The data details on getting electricity can be ƒƒ Whether electricity tariffs are mechanisms and tools measured by the found at http://www.doingbusiness.org. The transparent and easily available. A index are in place. A location may also initial methodology was developed by Carolin score of 1 is assigned if effective tariffs receive a score of 0 if either the SAIDI Geginat and Rita Ramalho (“Electricity are available online and customers or SAIFI value (or both) exceeds the Connections and Firm Performance in 183 are notified of a change in tariff a threshold of 100 or if not all outages were Countries,” Global Indicators Group, World full billing cycle (that is, one month) considered when calculating the indices. In Bank Group, Washington, DC, 2015) and is ahead of time; 0 if not. Suriname, for example, the utility does not adopted here with minor changes. DATA NOTES 109 EFFICIENCY OF TRANSFERRING in good condition and complies with REGISTERING PROPERTY PROPERTY all safety standards, building codes and other legal requirements. It has Doing Business records the full sequence As recorded by Doing Business, the no heating system. The property of of procedures necessary for a business process of transferring property starts land and building will be transferred in (the buyer) to purchase a property from with obtaining the necessary documents, its entirety. another business (the seller) and to such as a copy of the seller’s title if ƒƒ Will not be subject to renovations transfer the property title to the buyer’s necessary, and conducting due diligence or additional building following the name so that the buyer can use the if required. The transaction is considered purchase. property for expanding its business, use complete when it is opposable to third ƒƒ Has no trees, natural water sources, the property as collateral in taking new parties and when the buyer can use natural reserves or historical loans or, if necessary, sell the property the property, use it as collateral for a monuments of any kind. to another business. It also measures bank loan or resell it (figure 8.8). Every ƒƒ Will not be used for special purposes, the time and cost to complete each of procedure required by law or necessary and no special permits, such as for these procedures. In addition, Doing in practice is included, whether it is the residential use, industrial plants, Business measures the quality of the land responsibility of the seller or the buyer waste storage or certain types of administration system in each economy. or must be completed by a third party agricultural activities, are required. The quality of land administration on their behalf. Local property lawyers, ƒƒ Has no occupants, and no other party index has five dimensions: reliability notaries and property registries provide holds a legal interest in it. of infrastructure, transparency of information on procedures as well as the information, geographic coverage, land time and cost to complete each of them. Procedures dispute resolution and equal access to A procedure is defined as any interaction property rights. Assumptions about the parties of the buyer or the seller, their agents (if an The parties (buyer and seller): agent is legally or in practice required) or The ranking of locations on the ease of ƒƒ Are limited liability companies (or the the property with external parties, including registering property is determined by legal equivalent). government agencies, inspectors, notaries sorting their distance to frontier scores ƒƒ Are located in the periurban area of and lawyers. Interactions between for registering property. These scores the selected city. company officers and employees are not are the simple average of the distance to ƒƒ Are 100% domestically and privately considered. All procedures that are legally frontier scores for each of the component owned. or in practice required for registering indicators (figure 8.7). ƒƒ Have 50 employees each, all of whom property are recorded, even if they may are nationals. be avoided in exceptional cases (table ƒƒ Perform general commercial activities. 8.5). It is assumed that the buyer follows FIGURE 8.7  Registering property: the fastest legal option available and efficiency and quality of land administration system Assumptions about the property used by the majority of property owners. The property: Although the buyer may use lawyers or Rankings are based on distance to ƒƒ Has a value of 50 times income per other professionals where necessary in frontier scores for four indicators capita. The sale price equals the value. the registration process, it is assumed Days to transfer Cost to transfer ƒƒ Is fully owned by the seller. that the buyer does not employ an outside property between two property, as % of local companies property value ƒƒ Has no mortgages attached and has facilitator in the registration process unless been under the same ownership for legally or in practice required to do so. the past 10 years. 25% 25% ƒƒ Is registered in the land registry or Time Time Cost cadastre, or both, and is free of title Time is recorded in calendar days. The 25% 25% Procedures Quality disputes. measure captures the median duration of land administration ƒƒ Is located in a periurban commercial that property lawyers, notaries or registry index zone, and no rezoning is required. officials indicate is necessary to complete Steps to transfer Reliability, ƒƒ Consists of land and a building. The a procedure. It is assumed that the mini- property so that it transparency and land area is 557.4 square meters mum time required for each procedure is can be sold or used coverage of land as collateral administration system; (6,000 square feet). A two-story one day, except for procedures that can protection against land warehouse of 929 square meters be fully completed online, for which the disputes; equal access to property rights (10,000 square feet) is located on the time required is recorded as half a day. land. The warehouse is 10 years old, is Although procedures may take place 110 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Reliability of infrastructure FIGURE 8.8 What are the time, cost and number of procedures required to transfer property between two local companies? index The reliability of infrastructure index has Cost (% of property value) six components: Buyer can use ƒƒ How land titles are kept at the registry the property, of the selected location. A score of 2 resell it or use it as is assigned if the majority of land titles collateral Number of are fully digital; 1 if the majority are Land & two-story procedures scanned; 0 if the majority are kept in warehouse paper format. Seller with property ƒƒ Whether there is an electronic database registered and no title disputes Time for checking for encumbrances. A Preregistration Registration Postregistration (days) score of 1 is assigned if yes; 0 if no. ƒƒ How maps of land plots are kept at the mapping agency of the selected simultaneously, they cannot start on the requirements and their sequence from the location. A score of 2 is assigned if same day, again with the exception of beginning. Time spent on gathering infor- the majority of maps are fully digital; procedures that can be fully completed mation is not considered. If time estimates 1 if the majority are scanned; 0 if the online. It is assumed that the buyer does differ among sources, the median reported majority are kept in paper format. not waste time and commits to complet- value is used. ƒƒ Whether there is a geographic ing each remaining procedure without information system—an electronic delay. If a procedure can be accelerated for Cost database for recording boundaries, an additional cost, the fastest legal proce- Cost is recorded as a percentage of checking plans and providing dure available and used by the majority of the property value, assumed to be cadastral information. A score of 1 is property owners is chosen. If procedures equivalent to 50 times income per capita. assigned if yes; 0 if no. can be undertaken simultaneously, it Only official costs required by law are ƒƒ How the land ownership registry and is assumed that they are. It is assumed recorded, including fees, transfer taxes, mapping agency are linked. A score that the parties involved are aware of all stamp duties and any other payment to of 1 is assigned if land ownership the property registry, notaries, public information and maps are kept in a agencies or lawyers. Other taxes, such single database or in linked databases; TABLE 8.5  What do the indicators on the efficiency of transferring property as capital gains tax or value added tax, 0 if there is no connection between measure? are excluded from the cost measure. the different databases. Both costs borne by the buyer and those ƒƒ How immovable property is identified. Procedures to legally transfer title on immovable property (number) borne by the seller are included. If cost A score of 1 is assigned if there is a Preregistration procedures (for example, checking estimates differ among sources, the unique number to identify property for liens, notarizing sales agreement, paying median reported value is used. for the majority of land plots; 0 if there property transfer taxes) are multiple identifiers. Registration procedures in the selected city QUALITY OF LAND Postregistration procedures (for example, filing ADMINISTRATION The index ranges from 0 to 8, with higher title with municipality) values indicating a higher quality of infra- Time required to complete each procedure The quality of land administration index structure for ensuring the reliability of (calendar days) is composed of five other indices: the information on property titles and bound- Does not include time spent gathering information reliability of infrastructure, transparency aries. In Turkey, for example, the land Each procedure starts on a separate day— of information, geographic coverage, land registry offices in Istanbul maintain titles though procedures that can be fully completed dispute resolution and equal access to in a fully digital format (a score of 2) and online are an exception to this rule property rights indices (table 8.6). Data are have a fully electronic database to check Procedure considered completed once final collected for each of the selected locations. for encumbrances (a score of 1). The document is received Cadastral Directorate offices in Istanbul No prior contact with officials have digital maps (a score of 2), and the Cost required to complete each procedure Geographical Information Directorate has (% of property value) a public portal allowing users to check the Official costs only, no bribes plans and cadastral information on parcels No value added or capital gains taxes included along with satellite images (a score of DATA NOTES 111 ƒƒ Whether there is a specific and sepa- TABLE 8.6  What do the indicators on the quality of land administration measure? rate mechanism for filing complaints Reliability of infrastructure index (0–8) about a problem that occurred at Type of system for archiving information on land ownership the agency in charge of immovable Availability of electronic database to check for encumbrances property registration. A score of 1 Type of system for archiving maps is assigned if there is a specific and Availability of geographic information system separate mechanism for filing a complaint; 0 if there is only a general Link between property ownership registry and mapping system mechanism or no mechanism. Transparency of information index (0–6) ƒƒ Whether there are publicly available Accessibility of information on land ownership official statistics tracking the number Accessibility of maps of land plots of transactions at the immovable Publication of fee schedules, lists of registration documents, service standards property registration agency. A score Availability of a specific and separate mechanism for complaints of 0.5 is assigned if statistics are published about property transfers Publication of statistics about the number of property transactions in the selected location in the past Geographic coverage index (0–8) calendar year; 0 if no such statistics Coverage of land registry at the level of the selected location and the economy are made publicly available. Coverage of mapping agency at the level of the selected location and the economy ƒƒ Whether maps of land plots are made Land dispute resolution index (0–8) publicly available. A score of 0.5 is Legal framework for immovable property registration assigned if maps are accessible by Mechanisms to prevent and resolve land disputes anyone; 0 if access is restricted. ƒƒ Whether the fee schedule for Equal access to property rights index (-2–0) accessing maps is made publicly Unequal ownership rights to property between unmarried men and women available. A score of 0.5 is assigned if Unequal ownership rights to property between married men and women the fee schedule is accessible online Quality of land administration index (0–30) or on a public board, free of charge; 0 Sum of the reliability of infrastructure, transparency of information, geographic coverage, land dispute if it is not made available to the public resolution and equal access to property rights indices or if it can be obtained only in person. ƒƒ Whether the mapping agency 1). Databases about land ownership and if the list of documents is accessible commits to delivering an updated maps are linked through the TAKBIS online or on a public board; 0 if it is map within a specific time frame. A system, an integrated information system not made available to the public or if it score of 0.5 is assigned if the service for the land registry offices and cadastral can be obtained only in person. standard is accessible online or on offices (a score of 1). Finally, there is a ƒƒ Whether the fee schedule for a public board; 0 if it is not made unique identifying number for properties completing any type of property available to the public or if it can be (a score of 1). Adding these numbers gives transaction is made publicly available. obtained only in person. Turkey a score of 8 on the reliability of A score of 0.5 is assigned if the fee ƒƒ Whether there is a specific and infrastructure index. schedule is accessible online or on a separate mechanism for filing public board, free of charge; 0 if it is complaints about a problem that Transparency of information not made available to the public or if it occurred at the mapping agency. A index can be obtained only in person. score of 0.5 is assigned if there is a The transparency of information index ƒƒ Whether the agency in charge of specific and separate mechanism for has 10 components: immovable property registration filing a complaint; 0 if there is only a ƒƒ Whether information on land commits to delivering a legally general mechanism or no mechanism. ownership is made publicly available. binding document that proves A score of 1 is assigned if information property ownership within a specific The index ranges from 0 to 6, with higher on land ownership is accessible by time frame. A score of 0.5 is assigned values indicating greater transparency in anyone; 0 if access is restricted. if the service standard is accessible the land administration system. In the ƒƒ Whether the list of documents online or on a public board; 0 if it is Netherlands, for example, anyone who required for completing any type of not made available to the public or if it pays a fee can consult the land ownership property transaction is made publicly can be obtained only in person. database (a score of 1). Information available. A score of 0.5 is assigned can be obtained at the office, by mail 112 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA or online using the Kadaster website The index ranges from 0 to 8, with higher A score of 0.5 is assigned if there is (http://www.kadaster.nl). Anyone can values indicating greater geographic verification of identity, either by the also get information online about the coverage in land ownership registration registrar or by a professional (such list of documents to submit for property and cadastral mapping. In the Republic as a notary or lawyer); 0 if there is no registration (a score of 0.5), the fee of Korea, for example, all privately held verification. schedule for registration (a score of 0.5) land plots are formally registered at the ƒƒ Whether there is a national database and the service standards (a score of land registry in Seoul (a score of 2) and to verify the accuracy of identity 0.5). And anyone facing a problem at the in the economy as a whole (a score of 2). documents. A score of 1 is assigned if land registry can file a complaint or report In addition, all privately held land plots such a national database is available; an error by filling in a specific form online are mapped in Seoul (a score of 2) and 0 if not. (a score of 1). In addition, the Kadaster in the economy as a whole (a score of ƒƒ How much time it takes to obtain a makes statistics about land transactions 2). Adding these numbers gives Korea decision from a court of first instance available to the public, reporting a total of a score of 8 on the geographic coverage (without appeal) in a standard land 214,793 property transfers in Amsterdam index. dispute between two local businesses in 2016 (a score of 0.5). Moreover, over tenure rights worth 50 times anyone who pays a fee can consult online Land dispute resolution index income per capita and located in cadastral maps (a score of 0.5). It is also The land dispute resolution index assesses the selected location. A score of 3 is possible to get public access to the fee the legal framework for immovable assigned if it takes less than one year; schedule for map consultation (a score property registration and the accessibility 2 if it takes between one and two of 0.5), the service standards for delivery of dispute resolution mechanisms. The years; 1 if it takes between two and of an updated plan (a score of 0.5) and a index has eight components: three years; 0 if it takes more than specific mechanism for filing a complaint ƒƒ Whether the law requires that three years. about a map (a score of 0.5). Adding all property sale transactions be ƒƒ Whether there are publicly available these numbers gives the Netherlands registered at the immovable property statistics on the number of land a score of 6 on the transparency of registry to make them opposable to disputes in the first instance. A score information index. third parties. A score of 1.5 is assigned of 0.5 is assigned if statistics are if yes; 0 if no. published about land disputes in the Geographic coverage index ƒƒ Whether the formal system of economy in the past calendar year; 0 The geographic coverage index has four immovable property registration is if no such statistics are made publicly components: subject to a guarantee. A score of 0.5 available. ƒƒ How complete the coverage of the is assigned if either a state or a private land registry is at the level of the guarantee over immovable property The index ranges from 0 to 8, with selected location. A score of 2 is registration is required by law; 0 if no higher values indicating greater assigned if all privately held land plots such guarantee is required. protection against land disputes. In in the location are formally registered ƒƒ Whether there is a specific Lithuania, for example, according to at the land registry; 0 if not. compensation mechanism to cover the Civil Code and the Law on the Real ƒƒ How complete the coverage of the for losses incurred by parties who Property Register, property transactions land registry is at the level of the engaged in good faith in a property must be registered at the land registry economy. A score of 2 is assigned transaction based on erroneous to make them opposable to third parties if all privately held land plots in the information certified by the (a score of 1.5). The property transfer economy are formally registered at immovable property registry. A score system is guaranteed by the state (a the land registry; 0 if not. of 0.5 is assigned if yes; 0 if no. score of 0.5) and has a compensation ƒƒ How complete the coverage of the ƒƒ Whether the legal system requires mechanism to cover for losses incurred mapping agency is at the level of verification of the legal validity of by parties who engaged in good faith the selected location. A score of 2 is the documents necessary for a in a property transaction based on an assigned if all privately held land plots property transaction. A score of 0.5 error by the registry (a score of 0.5). A in the location are mapped; 0 if not. is assigned if there is a review of legal notary verifies the legal validity of the ƒƒ How complete the coverage of the validity, either by the registrar or by documents in a property transaction mapping agency is at the level of the a professional (such as a notary or (a score of 0.5) and the identity of the economy. A score of 2 is assigned lawyer); 0 if there is no review. parties (a score of 0.5), in accordance if all privately held land plots in the ƒƒ Whether the legal system requires with the Law on the Notary Office economy are mapped; 0 if not. verification of the identity of the (Law I-2882). Lithuania has a national parties to a property transaction. database to verify the accuracy of DATA NOTES 113 identity documents (a score of 1). In a in Tonga, according to the Land Act [Cap judges. The ranking of economies on the land dispute between two Lithuanian 132], sections 7, 45 and 82, unmarried ease of enforcing contracts is determined companies over the tenure rights of a men and unmarried women do not by sorting their distance to frontier scores property worth $770,000, the Vilnius have equal ownership rights to property for enforcing contracts. These scores are District Court gives a decision in less (a score of −1), and married men and the simple average of the distance to than one year (a score of 3). Finally, married women are not permitted to frontier scores for each of the component statistics about land disputes are use their property in the same way (a indicators (figure 8.9). collected and published; there were a score of −1). Adding these numbers total of 549 land disputes in the country gives Tonga a score of −2 on the equal EFFICIENCY OF RESOLVING A in 2016 (a score of 0.5). Adding these access to property rights index—which COMMERCIAL DISPUTE numbers gives Lithuania a score of 8 on indicates unequal property rights the land dispute resolution index. between men and women. The data on time and cost are built by following the step-by-step evolution of Equal access to property rights Quality of land administration a commercial sale dispute (figure 8.10; index index table 8.7). The data are collected for a The equal access to property rights index The quality of land administration specific court for each location covered, has two components: index is the sum of the scores on the under the assumptions about the case ƒƒ Whether unmarried men and reliability of infrastructure, transparency described below. The court is the one with unmarried women have equal of information, geographic coverage, jurisdiction over disputes worth 200% of ownership rights to property. A score land dispute resolution and equal access income per capita or $5,000, whichever of −1 is assigned if there are unequal to property rights indices. The index is greater. The name of the relevant court ownership rights to property; 0 if ranges from 0 to 30, with higher values in each economy is published on the there is equality. indicating better quality of the land Doing Business website at http://www ƒƒ Whether married men and married administration system. .doingbusiness.org/data/exploretopics/ women have equal ownership rights enforcing-contracts. to property. A score of −1 is assigned If private sector entities were unable to if there are unequal ownership rights register property transfers in an economy Assumptions about the case to property; 0 if there is equality. between June 2016 and June 2017, the ƒƒ The value of the claim is equal to economy receives a “no practice” mark on 200% of the economy’s income per Ownership rights cover the ability to the procedures, time and cost indicators. capita or $5,000, whichever is greater. manage, control, administer, access, A “no practice” economy receives a score ƒƒ The dispute concerns a lawful encumber, receive, dispose of and transfer of 0 on the quality of land administration transaction between two businesses property. Each restriction is considered index even if its legal framework includes (Seller and Buyer), both located in the if there is a differential treatment for provisions related to land administration. selected city. Pursuant to a contract men and women in the law considering the default marital property regime. For The data details on registering property can FIGURE 8.9  Enforcing contracts: customary land systems, equality is be found at http://www.doingbusiness.org. efficiency and quality of commercial assumed unless there is a general legal dispute resolution provision stating a differential treatment. Rankings are based on distance to ENFORCING CONTRACTS frontier scores for three indicators The index ranges from −2 to 0, with higher values indicating greater Doing Business measures the time and Days to resolve Attorney, court and commercial sale dispute enforcement costs as inclusiveness of property rights. In cost for resolving a commercial dispute through the courts % of claim value Mali, for example, unmarried men through a local first-instance court and and unmarried women have equal also compiles the quality of judicial ownership rights to property (a score of processes index, evaluating whether 33.3% 33.3% Time Cost 0). Similarly, married men and married each economy has adopted a series of women can use their property in the good practices that promote quality 33.3% Quality of judicial same way (a score of 0). Adding these and efficiency in the court system. The processes index numbers gives Mali a score of 0 on the data are collected through study of the equal access to property rights index— codes of civil procedure and other court which indicates equal property rights regulations as well as questionnaires Use of good practices promoting quality and efficiency between men and women. Conversely, completed by local litigation lawyers and 114 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA FIGURE 8.10  What are the time and ƒƒ At the outset of the dispute, Seller and (iii) enforcement. Time is recorded cost to resolve a commercial dispute decides to attach Buyer’s movable considering the case study assumptions through the courts? assets (for example, office equipment detailed above and only as applicable to and vehicles) because Seller fears that the competent court. Time is recorded in Court Buyer may hide its assets or otherwise practice, regardless of time limits set by become insolvent. law if such time limits are not respected ƒƒ The claim is disputed on the merits in the majority of cases. Time Cost because of Buyer’s allegation that the quality of the goods was not adequate. The filing and service phase includes the Because the court cannot decide the following: Company A Company B case on the basis of documentary (seller & Commercial (buyer & plaintiff) dispute defendant) evidence or legal title alone, an expert ƒƒ The time for Seller to try to obtain opinion is given on the quality of the payment out of court through a Filing & Trial & Enforcement service judgment goods. If it is standard practice in the nonlitigious demand letter, including economy for each party to call its own the time to prepare the letter and expert witness, the parties each call the deadline provided to Buyer to one expert witness. If it is standard comply. practice for the judge to appoint an ƒƒ The time necessary for a local lawyer to TABLE 8.7  What do the indicators on independent expert, the judge does write the initial complaint and gather the efficiency of resolving a commercial so. In this case the judge does not all supporting documents needed dispute measure? allow opposing expert testimony. for filing, including authenticating or Time required to enforce a contract through ƒƒ Following the expert opinion, notarizing them if required. the courts (calendar days) the judge decides that the goods ƒƒ The time necessary to file the Time to file and serve the case delivered by Seller were of adequate complaint at the court. Time for trial and to obtain the judgment quality and that Buyer must pay the ƒƒ The time necessary for Buyer contract price. The judge thus renders (defendant) to be served, including Time to enforce the judgment a final judgment that is 100% in favor the processing time at the court Cost required to enforce a contract through the courts (% of claim) of Seller. and the waiting periods between Average attorney fees ƒƒ Buyer does not appeal the judgment. unsuccessful attempts to serve Buyer, Seller decides to start enforcing if more than one attempt is usually Court costs the judgment as soon as the time required. Enforcement costs allocated by law for appeal lapses. Seller takes all required steps for The trial and judgment phase includes between the businesses, Seller sells prompt enforcement of the judgment. the following: some custom-made furniture to The money is successfully collected ƒƒ The time between the moment a Buyer worth 200% of the economy’s through a public sale of Buyer’s notice of the case is served on Buyer income per capita or $5,000, which- movable assets (for example, office and the moment a pretrial conference ever is greater. After Seller delivers equipment and vehicles). It is is held, if a pretrial conference is part the goods to Buyer, Buyer refuses to assumed that Buyer has no money in of the case management techniques pay the contract price, alleging that its bank account, making it impossible used by the competent court. the goods are not of adequate qual- for the judgment to be enforced ƒƒ The time between the pretrial ity. Because they were custom-made, through a seizure of Buyer’s account. conference and the first hearing, if Seller is unable to sell them to anyone a pretrial conference is part of the else. Time case management techniques used ƒƒ Seller (the plaintiff) sues Buyer (the Time is recorded in calendar days, by the competent court. If not, the defendant) to recover the amount counted from the moment Seller time between the moment a notice under the sales agreement. The decides to file the lawsuit in court of the case is served on Buyer and the dispute is brought before the court until payment. This includes both the moment the first hearing is held. located in the selected location with days when actions take place and the ƒƒ The time to conduct all trial activities, jurisdiction over commercial cases waiting periods in between. The average including exchanges of briefs and worth 200% of income per capita or duration of the following three stages of evidence, multiple hearings, waiting $5,000, whichever is greater. dispute resolution is recorded: (i) filing times in between hearings and the and service; (ii) trial and judgment; obtaining of an expert opinion. DATA NOTES 115 ƒƒ The time necessary for the judge to QUALITY OF JUDICIAL it is applicable to all civil cases and the issue a written final judgment once PROCESSES law sets a cap on the value of cases the evidence period has closed. that can be handled through this court ƒƒ The time limit for appeal. The quality of judicial processes index or procedure. If small claims are han- measures whether each location has dled by a stand-alone court, the point The enforcement phase includes the adopted a series of good practices in its is assigned only if this court applies following: court system in four areas: court structure a simplified procedure. An additional ƒƒ The time it takes to obtain an and proceedings, case management, score of 0.5 is assigned if parties enforceable copy of the judgment court automation and alternative dispute can represent themselves before and contact the relevant enforcement resolution (table 8.8). this court or during this procedure. office. If no small claims court or simplified ƒƒ The time it takes to locate, identify, Court structure and proceedings procedure is in place, a score of 0 is seize and transport Buyer’s (losing index assigned. party) movable assets (including the The court structure and proceedings ƒƒ Whether plaintiffs can obtain pretrial time necessary to obtain an order index has five components: attachment of the defendant’s from the court to attach and seize the ƒƒ Whether a specialized commercial movable assets if they fear that the assets, if applicable). court or a section dedicated solely to assets may be moved out of the ƒƒ The time it takes to advertise, hearing commercial cases is in place. jurisdiction or otherwise dissipated. organize and hold the auction. If more A score of 1.5 is assigned if yes; 0 if no. A score of 1 is assigned if yes; 0 if no. than one auction is usually required to ƒƒ Whether a small claims court or a ƒƒ Whether cases are assigned fully recover the value of the claim in a fast-track procedure for small claims randomly and automatically to case comparable to the standardized is in place. A score of 1 is assigned if judges throughout the competent case, the time between multiple such a court or procedure is in place, court. A score of 1 is assigned if the auction attempts is recorded. ƒƒ The time it takes for Seller (winning TABLE 8.8  What do the indicators on the quality of judicial processes measure? party) to fully recover the value of the claim once the auction is successfully Court structure and proceedings index (0–5) completed. Availability of specialized commercial court, division or section Availability of small claims court or simplified procedure for small claims Cost Availability of pretrial attachment Cost is recorded as a percentage of Criteria used to assign cases to judges the claim, assumed to be equivalent to Evidentiary weight of a woman’s testimony 200% of income per capita or $5,000, Case management index (0–6) whichever is greater. Three types of costs are recorded: average attorney fees, court Regulations setting time standards for key court events costs and enforcement costs. Regulations on adjournments or continuances Availability of performance measurement mechanisms Average attorney fees are the fees that Availability of pretrial conference Seller (plaintiff) must advance to a Availability of electronic case management system for judges local attorney to represent Seller in the Availability of electronic case management system for lawyers standardized case, regardless of final reimbursement. Court costs include all Court automation index (0–4) costs that Seller (plaintiff) must advance Ability to file initial complaint electronically to the court, regardless of the final cost Ability to serve initial complaint electronically borne by Seller. Court costs include the Ability to pay court fees electronically fees that must be paid to obtain an expert Publication of judgments opinion. Enforcement costs are all costs Alternative dispute resolution index (0–3) that Seller (plaintiff) must advance to Arbitration enforce the judgment through a public sale of Buyer’s movable assets, regardless Voluntary mediation or conciliation of the final cost borne by Seller. Bribes are Quality of judicial processes index (0–18) not taken into account. Sum of the court structure and proceedings, case management, court automation and alternative dispute resolution indices 116 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA assignment of cases is random and and exceptional circumstances and ƒƒ Whether judges within the compe- automated; 0.5 if it is random but not whether these rules are respected tent court can use an electronic case automated; 0 if it is neither random in more than 50% of cases. A score management system for at least nor automated. of 1 is assigned if all three conditions four of the following purposes: (i) to ƒƒ Whether a woman’s testimony are met; 0.5 if only two of the three access laws, regulations and case carries the same evidentiary weight conditions are met; 0 if only one of the law; (ii) to automatically generate a in court as a man’s. A score of −1 is conditions is met or if none are. hearing schedule for all cases on their assigned if the law differentiates ƒƒ Whether there are any performance docket; (iii) to send notifications (for between the evidentiary value of a measurement reports that can be example, e-mails) to lawyers; (iv) woman’s testimony and that of a generated about the competent court to track the status of a case on their man’s testimony; 0 if it does not. to monitor the court’s performance, docket; (v) to view and manage case The index ranges from 0 to 5, with higher to track the progress of cases through documents (briefs, motions); (vi) to values indicating a more sophisticated the court and to ensure compliance assist in writing judgments; (vii) to and streamlined court structure. In Bosnia with established time standards. semiautomatically generate court and Herzegovina, for example, a special- A score of 1 is assigned if at least orders; and (viii) to view court orders ized commercial court is in place (a score two of the following four reports are and judgments in a particular case. A of 1.5), and small claims can be resolved made publicly available: (i) time to score of 1 is assigned if an electronic through a dedicated court in which self- disposition report (measuring the case management system is available representation is allowed (a score of 1.5). time the court takes to dispose or that judges can use for at least four of Plaintiffs can obtain pretrial attachment adjudicate its cases); (ii) clearance these purposes; 0 if not. of the defendant’s movable assets if they rate report (measuring the number of ƒƒ Whether lawyers can use an electronic fear dissipation during trial (a score of 1). cases resolved relative to the number case management system for at Cases are assigned randomly through an of incoming cases); (iii) age of pending least four of the following purposes: electronic case management system (a cases report (providing a snapshot (i) to access laws, regulations and score of 1). Adding these numbers gives of all pending cases according to case law; (ii) to access forms to Bosnia and Herzegovina a score of 5 case type, case age, last action held be submitted to the court; (iii) to on the court structure and proceedings and next action scheduled); and (iv) receive notifications (for example, index. single case progress report (providing e-mails); (iv) to track the status of a a snapshot of the status of one case). case; (v) to view and manage case Case management index A score of 0 is assigned if only one of documents (briefs, motions); (vi) to The case management index has six these reports is available or if none file briefs and documents with the components: are. court; and (vii) to view court orders ƒƒ Whether any of the applicable laws or ƒƒ Whether a pretrial conference and decisions in a particular case. A regulations on civil procedure contain is among the case management score of 1 is assigned if an electronic time standards for at least three of the techniques used before the competent case management system is available following key court events: (i) service court and at least three of the that lawyers can use for at least four of process; (ii) first hearing; (iii) filing following issues are discussed during of these purposes; 0 if not. of the statement of defense; (iv) the pretrial conference: (i) scheduling completion of the evidence period; (including the time frame for filing The index ranges from 0 to 6, with (v) filing of testimony by expert; and motions and other documents with higher values indicating a higher-quality (vi) submission of the final judgment. the court); (ii) case complexity and and more efficient case management A score of 1 is assigned if such time projected length of trial; (iii) possibility system. In Australia, for example, time standards are available and respected of settlement or alternative dispute standards for at least three key court in more than 50% of cases; 0.5 if they resolution; (iv) exchange of witness events are established in applicable civil are available but not respected in lists; (v) evidence; (vi) jurisdiction procedure instruments and are respected more than 50% of cases; 0 if there are and other procedural issues; and (vii) in more than 50% of cases (a score of time standards for less than three of the narrowing down of contentious 1). The law stipulates that adjournments these key court events. issues. A score of 1 is assigned if a can be granted only for unforeseen and ƒƒ Whether there are any laws pretrial conference in which at least exceptional circumstances, and this rule regulating the maximum number of three of these events are discussed is is respected in more than 50% of cases adjournments or continuances that held within the competent court; 0 if (a score of 0.5). A time to disposition can be granted, whether adjournments not. report, a clearance rate report and an are limited by law to unforeseen age of pending cases report can be DATA NOTES 117 generated about the competent court no additional in-person interactions ƒƒ Whether valid arbitration clauses (a score of 1). A pretrial conference is are required and local experts have or agreements are enforced by local among the case management techniques used it enough to be able to confirm courts in more than 50% of cases. A used before the District Court of New that it is fully functional. score of 0.5 is assigned if yes; 0 if no. South Wales (a score of 1). An electronic ƒƒ Whether judgments rendered by ƒƒ Whether voluntary mediation, case management system satisfying local courts are made available to the conciliation or both are a recognized the criteria outlined above is available general public through publication in way of resolving commercial disputes. to judges (a score of 1) and to lawyers official gazettes, in newspapers or on A score of 0.5 is assigned if yes; 0 if no. (a score of 1). Adding these numbers the internet. A score of 1 is assigned ƒƒ Whether voluntary mediation, gives Australia a score of 5.5 on the case if judgments rendered in commercial conciliation or both are governed by management index, the highest score cases at all levels are made available a consolidated law or consolidated attained by any economy on this index. to the general public; 0.5 if only judg- chapter or section of the applicable ments rendered at the appeal and code of civil procedure encompassing Court automation index supreme court level are made available substantially all their aspects. A score The court automation index has four to the general public; 0 in all other of 0.5 is assigned if yes; 0 if no. components: instances. No points are awarded if ƒƒ Whether there are any financial ƒƒ Whether the initial complaint can judgments need to be individually incentives for parties to attempt be filed electronically through a requested from the court or if the case mediation or conciliation (for dedicated platform (not e-mail or number or parties’ details are required example, if mediation or conciliation fax) within the relevant court. A score in order to obtain a copy of a judgment. is successful, a refund of court filing of 1 is assigned if such a platform is fees, an income tax credit or the like). available and litigants are not required The index ranges from 0 to 4, with higher A score of 0.5 is assigned if yes; 0 if no. to follow up with a hard copy of the values indicating a more automated, complaint; 0 if not. Electronic filing efficient and transparent court system. In The index ranges from 0 to 3, with is acknowledged regardless of the Estonia, for example, the initial summons higher values associated with greater percentage of users, as long as no can be filed online (a score of 1), it can availability of mechanisms of alternative additional in-person interactions are be served on the defendant electroni- dispute resolution. In Israel, for example, required and local experts have used cally (a score of 1), and court fees can arbitration is regulated through a it enough to be able to confirm that it be paid electronically as well (a score of dedicated statute (a score of 0.5), all is fully functional. 1). In addition, judgments in commercial relevant commercial disputes can be ƒƒ Whether the initial complaint can be cases at all levels are made publicly avail- submitted to arbitration (a score of 0.5), served on the defendant electroni- able through the internet (a score of 1). and valid arbitration clauses are usually cally, through a dedicated system or Adding these numbers gives Estonia a enforced by the courts (a score of 0.5). by e-mail, fax or SMS (short message score of 4 on the court automation index. Voluntary mediation is a recognized way service). A score of 1 is assigned if of resolving commercial disputes (a score electronic service is available and no Alternative dispute resolution of 0.5), it is regulated through a dedicated further service of process is required; index statute (a score of 0.5), and part of the 0 if not. Electronic service is acknowl- The alternative dispute resolution index filing fees is reimbursed if the process is edged regardless of the percentage of has six components: successful (a score of 0.5). Adding these users, as long as no additional in-per- ƒƒ Whether domestic commercial numbers gives Israel a score of 3 on the son interactions are required and local arbitration is governed by a alternative dispute resolution index. experts have used it enough to be able consolidated law or consolidated to confirm that it is fully functional. chapter or section of the applicable Quality of judicial processes ƒƒ Whether court fees can be paid elec- code of civil procedure encompassing index tronically, either through a dedicated substantially all its aspects. A score of The quality of judicial processes platform or through online banking. 0.5 is assigned if yes; 0 if no. index is the sum of the scores on the A score of 1 is assigned if fees can be ƒƒ Whether commercial disputes of all court structure and proceedings, case paid electronically and litigants are not kinds—aside from those dealing with management, court automation and required to follow up with a hard copy public order, public policy, bankruptcy, alternative dispute resolution indices. of the receipt or produce a stamped consumer rights, employment issues The index ranges from 0 to 18, with copy of the receipt; 0 if not. Electronic or intellectual property—can be higher values indicating better and more payment is acknowledged regardless submitted to arbitration. A score of efficient judicial processes. of the percentage of users, as long as 0.5 is assigned if yes; 0 if no. 118 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA The data details on enforcing contracts can be found for each economy at http://www .doingbusiness.org. This methodology was initially developed by Simeon Djankov, Rafael La Porta, Florencio López-de-Silanes and Andrei Shleifer (“Courts,” Quarterly Journal of Economics 118, no. 2 [2003]: 453–517) and is adopted here with several changes. The quality of judicial processes index was intro- duced in Doing Business 2016. The good practices tested in this index were developed on the basis of internationally recognized good practices promoting judicial efficiency. CITY SNAPSHOTS 119 City Snapshots CROATIA OSIJEK (Croatia) (rank among 25 cities) 13 Dealing with (rank among 25 cities) 12 Starting a business (rank within country) 3 construction permits (rank within country) 2 Distance to frontier score (0–100) 85.50 Distance to frontier score (0–100) 61.10 Procedures (number) 8 Procedures (number) 22 Time (days) 10.5 Time (days) 143 Cost (% of income per capita) 7.3 Cost (% of warehouse value) 6.8 Paid-in minimum capital (% of income per capita) 12.5 Building quality control index (0–15) 12 (rank among 25 cities) 17 (rank among 25 cities) 21 Getting electricity Registering property (rank within country) 4 (rank within country) 1 Distance to frontier score (0–100) 81.70 Distance to frontier score (0–100) 75.86 Procedures (number) 4 Procedures (number) 5 Time (days) 55 Time (days) 32 Cost (% of income per capita) 237.1 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 5 Quality of land administration index (0–30) 23.5 (rank among 25 cities) 2 Enforcing contracts (rank within country) 1 Distance to frontier score (0–100) 74.24 Time (days) 510 Cost (% of claim value) 15.7 Quality of judicial processes index (0–18) 13.0 RIJEKA (Croatia) (rank among 25 cities) 10 Dealing with (rank among 25 cities) 12 Starting a business (rank within country) 2 construction permits (rank within country) 2 Distance to frontier score (0–100) 87.59 Distance to frontier score (0–100) 61.10 Procedures (number) 7 Procedures (number) 22 Time (days) 8 Time (days) 136 Cost (% of income per capita) 7.4 Cost (% of warehouse value) 7.2 Paid-in minimum capital (% of income per capita) 12.5 Building quality control index (0–15) 12 (rank among 25 cities) 13 (rank among 25 cities) 22 Getting electricity Registering property (rank within country) 2 (rank within country) 2 Distance to frontier score (0–100) 82.87 Distance to frontier score (0–100) 75.02 Procedures (number) 4 Procedures (number) 5 Time (days) 73 Time (days) 39 Cost (% of income per capita) 237.1 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 6 Quality of land administration index (0–30) 23.5 (rank among 25 cities) 17 Enforcing contracts (rank within country) 4 Distance to frontier score (0–100) 65.67 Time (days) 825 Cost (% of claim value) 15.6 Quality of judicial processes index (0–18) 13.0 120 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA SPLIT (Croatia) (rank among 25 cities) 9 Dealing with (rank among 25 cities) 25 Starting a business (rank within country) 1 construction permits (rank within country) 5 Distance to frontier score (0–100) 89.55 Distance to frontier score (0–100) 43.67 Procedures (number) 6 Procedures (number) 23 Time (days) 6 Time (days) 227 Cost (% of income per capita) 7.4 Cost (% of warehouse value) 15.1 Paid-in minimum capital (% of income per capita) 12.5 Building quality control index (0–15) 12 (rank among 25 cities) 15 (rank among 25 cities) 25 Getting electricity Registering property (rank within country) 3 (rank within country) 5 Distance to frontier score (0–100) 82.66 Distance to frontier score (0–100) 71.08 Procedures (number) 4 Procedures (number) 5 Time (days) 75 Time (days) 72 Cost (% of income per capita) 237.1 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 6 Quality of land administration index (0–30) 23.5 (rank among 25 cities) 18 Enforcing contracts (rank within country) 5 Distance to frontier score (0–100) 65.56 Time (days) 837 Cost (% of claim value) 15 Quality of judicial processes index (0–18) 13.0 VARAZDIN (Croatia) (rank among 25 cities) 14 Dealing with (rank among 25 cities) 8 Starting a business (rank within country) 4 construction permits (rank within country) 1 Distance to frontier score (0–100) 85.38 Distance to frontier score (0–100) 66.20 Procedures (number) 8 Procedures (number) 21 Time (days) 11 Time (days) 112 Cost (% of income per capita) 7.3 Cost (% of warehouse value) 5.3 Paid-in minimum capital (% of income per capita) 12.5 Building quality control index (0–15) 12 (rank among 25 cities) 10 (rank among 25 cities) 23 Getting electricity Registering property (rank within country) 1 (rank within country) 3 Distance to frontier score (0–100) 84.29 Distance to frontier score (0–100) 74.07 Procedures (number) 4 Procedures (number) 5 Time (days) 60 Time (days) 47 Cost (% of income per capita) 237.1 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 6 Quality of land administration index (0–30) 23.5 (rank among 25 cities) 12 Enforcing contracts (rank within country) 3 Distance to frontier score (0–100) 69.49 Time (days) 685 Cost (% of claim value) 15.6 Quality of judicial processes index (0–18) 13.0 CITY SNAPSHOTS 121 ZAGREB (Croatia) (rank among 25 cities) 24 Dealing with (rank among 25 cities) 23 Starting a business (rank within country) 5 construction permits (rank within country) 4 Distance to frontier score (0–100) 82.49 Distance to frontier score (0–100) 54.77 Procedures (number) 8 Procedures (number) 22 Time (days) 22.5 Time (days) 146 Cost (% of income per capita) 7.2 Cost (% of warehouse value) 11.7 Paid-in minimum capital (% of income per capita) 12.5 Building quality control index (0–15) 12 (rank among 25 cities) 18 (rank among 25 cities) 23 Getting electricity Registering property (rank within country) 5 (rank within country) 3 Distance to frontier score (0–100) 80.43 Distance to frontier score (0–100) 74.07 Procedures (number) 4 Procedures (number) 5 Time (days) 65 Time (days) 47 Cost (% of income per capita) 298.5 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 5 Quality of land administration index (0–30) 23.5 (rank among 25 cities) 9 Enforcing contracts (rank within country) 2 Distance to frontier score (0–100) 70.60 Time (days) 650 Cost (% of claim value) 15.2 Quality of judicial processes index (0–18) 13.0 CZECH REPUBLIC BRNO (Czech Republic) (rank among 25 cities) 18 Dealing with (rank among 25 cities) 16 Starting a business (rank within country) 4 construction permits (rank within country) 1 Distance to frontier score (0–100) 84.55 Distance to frontier score (0–100) 57.90 Procedures (number) 8 Procedures (number) 20 Time (days) 20.5 Time (days) 236 Cost (% of income per capita) 1.0 Cost (% of warehouse value) 0.2 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 8 (rank among 25 cities) 2 (rank among 25 cities) 7 Getting electricity Registering property (rank within country) 2 (rank within country) 2 Distance to frontier score (0–100) 89.92 Distance to frontier score (0–100) 80.10 Procedures (number) 3 Procedures (number) 4 Time (days) 110 Time (days) 24.5 Cost (% of income per capita) 25.9 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 25 (rank among 25 cities) 25 Enforcing contracts (rank within country) 7 Distance to frontier score (0–100) 51.95 Time (days) 840 Cost (% of claim value) 33.8 Quality of judicial processes index (0–18) 9.5 122 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA LIBEREC (Czech Republic) (rank among 25 cities) 18 Dealing with (rank among 25 cities) 20 Starting a business (rank within country) 2 construction permits (rank within country) 4 Distance to frontier score (0–100) 84.55 Distance to frontier score (0–100) 56.67 Procedures (number) 8 Procedures (number) 21 Time (days) 20.5 Time (days) 239 Cost (% of income per capita) 1.0 Cost (% of warehouse value) 0.3 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 8 (rank among 25 cities) 25 (rank among 25 cities) 9 Getting electricity Registering property (rank within country) 7 (rank within country) 4 Distance to frontier score (0–100) 66.32 Distance to frontier score (0–100) 79.98 Procedures (number) 5 Procedures (number) 4 Time (days) 217 Time (days) 25.5 Cost (% of income per capita) 193.0 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 7 Quality of land administration index (0–30) 25 (rank among 25 cities) 24 Enforcing contracts (rank within country) 6 Distance to frontier score (0–100) 53.86 Time (days) 770 Cost (% of claim value) 33.8 Quality of judicial processes index (0–18) 9.5 OLOMOUC (Czech Republic) (rank among 25 cities) 11 Dealing with (rank among 25 cities) 24 Starting a business (rank within country) 1 construction permits (rank within country) 7 Distance to frontier score (0–100) 85.56 Distance to frontier score (0–100) 54.45 Procedures (number) 8 Procedures (number) 21 Time (days) 16.5 Time (days) 270 Cost (% of income per capita) 1.0 Cost (% of warehouse value) 0.2 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 8 (rank among 25 cities) 24 (rank among 25 cities) 9 Getting electricity Registering property (rank within country) 6 (rank within country) 4 Distance to frontier score (0–100) 67.09 Distance to frontier score (0–100) 79.98 Procedures (number) 6 Procedures (number) 4 Time (days) 169 Time (days) 25.5 Cost (% of income per capita) 282.5 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 7 Quality of land administration index (0–30) 25 (rank among 25 cities) 22 Enforcing contracts (rank within country) 4 Distance to frontier score (0–100) 55.64 Time (days) 705 Cost (% of claim value) 33.8 Quality of judicial processes index (0–18) 9.5 CITY SNAPSHOTS 123 OSTRAVA (Czech Republic) (rank among 25 cities) 15 Dealing with (rank among 25 cities) 19 Starting a business (rank within country) 3 construction permits (rank within country) 3 Distance to frontier score (0–100) 85.31 Distance to frontier score (0–100) 56.89 Procedures (number) 8 Procedures (number) 20 Time (days) 17.5 Time (days) 250 Cost (% of income per capita) 1.0 Cost (% of warehouse value) 0.2 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 8 (rank among 25 cities) 21 (rank among 25 cities) 6 Getting electricity Registering property (rank within country) 3 (rank within country) 1 Distance to frontier score (0–100) 69.89 Distance to frontier score (0–100) 80.22 Procedures (number) 6 Procedures (number) 4 Time (days) 172 Time (days) 23.5 Cost (% of income per capita) 283.2 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 25 (rank among 25 cities) 21 Enforcing contracts (rank within country) 3 Distance to frontier score (0–100) 56.05 Time (days) 690 Cost (% of claim value) 33.8 Quality of judicial processes index (0–18) 9.5 PLZEN (Czech Republic) (rank among 25 cities) 18 Dealing with (rank among 25 cities) 22 Starting a business (rank within country) 4 construction permits (rank within country) 6 Distance to frontier score (0–100) 84.55 Distance to frontier score (0–100) 55.38 Procedures (number) 8 Procedures (number) 21 Time (days) 20.5 Time (days) 257 Cost (% of income per capita) 1.0 Cost (% of warehouse value) 0.2 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 8 (rank among 25 cities) 22 (rank among 25 cities) 11 Getting electricity Registering property (rank within country) 4 (rank within country) 6 Distance to frontier score (0–100) 69.67 Distance to frontier score (0–100) 79.74 Procedures (number) 6 Procedures (number) 4 Time (days) 174 Time (days) 27.5 Cost (% of income per capita) 282.8 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 25 (rank among 25 cities) 20 Enforcing contracts (rank within country) 2 Distance to frontier score (0–100) 56.32 Time (days) 680 Cost (% of claim value) 33.8 Quality of judicial processes index (0–18) 9.5 124 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA PRAGUE (Czech Republic) (rank among 25 cities) 23 Dealing with (rank among 25 cities) 21 Starting a business (rank within country) 7 construction permits (rank within country) 5 Distance to frontier score (0–100) 83.55 Distance to frontier score (0–100) 56.17 Procedures (number) 8 Procedures (number) 21 Time (days) 24.5 Time (days) 246 Cost (% of income per capita) 1.0 Cost (% of warehouse value) 0.2 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 8 (rank among 25 cities) 1 (rank among 25 cities) 11 Getting electricity Registering property (rank within country) 1 (rank within country) 6 Distance to frontier score (0–100) 95.35 Distance to frontier score (0–100) 79.74 Procedures (number) 3 Procedures (number) 4 Time (days) 60 Time (days) 27.5 Cost (% of income per capita) 25.9 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 25 (rank among 25 cities) 19 Enforcing contracts (rank within country) 1 Distance to frontier score (0–100) 56.38 Time (days) 678 Cost (% of claim value) 33.8 Quality of judicial processes index (0–18) 9.5 USTI NAD LABEM (Czech Republic) (rank among 25 cities) 11 Dealing with (rank among 25 cities) 18 Starting a business (rank within country) 1 construction permits (rank within country) 2 Distance to frontier score (0–100) 85.56 Distance to frontier score (0–100) 57.24 Procedures (number) 8 Procedures (number) 20 Time (days) 16.5 Time (days) 245 Cost (% of income per capita) 1.0 Cost (% of warehouse value) 0.3 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 8 (rank among 25 cities) 23 (rank among 25 cities) 7 Getting electricity Registering property (rank within country) 5 (rank within country) 2 Distance to frontier score (0–100) 67.70 Distance to frontier score (0–100) 80.10 Procedures (number) 5 Procedures (number) 4 Time (days) 233 Time (days) 24.5 Cost (% of income per capita) 193.0 Cost (% of property value) 4.0 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 25 (rank among 25 cities) 23 Enforcing contracts (rank within country) 5 Distance to frontier score (0–100) 54.96 Time (days) 730 Cost (% of claim value) 33.8 Quality of judicial processes index (0–18) 9.5 CITY SNAPSHOTS 125 PORTUGAL BRAGA (Portugal) (rank among 25 cities) 1 Dealing with (rank among 25 cities) 7 Starting a business (rank within country) 1 construction permits (rank within country) 7 Distance to frontier score (0–100) 90.88 Distance to frontier score (0–100) 66.58 Procedures (number) 6 Procedures (number) 14 Time (days) 6.5 Time (days) 259 Cost (% of income per capita) 2.1 Cost (% of warehouse value) 0.8 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 11 (rank among 25 cities) 16 (rank among 25 cities) 16 Getting electricity Registering property (rank within country) 7 (rank within country) 4 Distance to frontier score (0–100) 82.27 Distance to frontier score (0–100) 79.31 Procedures (number) 6 Procedures (number) 1 Time (days) 65 Time (days) 2 Cost (% of income per capita) 38.8 Cost (% of property value) 7.3 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 20 (rank among 25 cities) 3 Enforcing contracts (rank within country) 2 Distance to frontier score (0–100) 73.78 Time (days) 540 Cost (% of claim value) 17.2 Quality of judicial processes index (0–18) 13.5 COIMBRA (Portugal) (rank among 25 cities) 1 Dealing with (rank among 25 cities) 9 Starting a business (rank within country) 1 construction permits (rank within country) 8 Distance to frontier score (0–100) 90.88 Distance to frontier score (0–100) 65.93 Procedures (number) 6 Procedures (number) 14 Time (days) 6.5 Time (days) 265 Cost (% of income per capita) 2.1 Cost (% of warehouse value) 0.9 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 11 (rank among 25 cities) 4 (rank among 25 cities) 18 Getting electricity Registering property (rank within country) 1 (rank within country) 6 Distance to frontier score (0–100) 87.49 Distance to frontier score (0–100) 79.07 Procedures (number) 4 Procedures (number) 1 Time (days) 65 Time (days) 4 Cost (% of income per capita) 36.1 Cost (% of property value) 7.3 Reliability of supply and transparency of tariffs index (0–8) 7 Quality of land administration index (0–30) 20 (rank among 25 cities) 1 Enforcing contracts (rank within country) 1 Distance to frontier score (0–100) 74.60 Time (days) 510 Cost (% of claim value) 17.2 Quality of judicial processes index (0–18) 13.5 126 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA EVORA (Portugal) (rank among 25 cities) 1 Dealing with (rank among 25 cities) 3 Starting a business (rank within country) 1 construction permits (rank within country) 3 Distance to frontier score (0–100) 90.88 Distance to frontier score (0–100) 73.53 Procedures (number) 6 Procedures (number) 14 Time (days) 6.5 Time (days) 169 Cost (% of income per capita) 2.1 Cost (% of warehouse value) 0.4 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 11 (rank among 25 cities) 11 (rank among 25 cities) 17 Getting electricity Registering property (rank within country) 5 (rank within country) 5 Distance to frontier score (0–100) 84.19 Distance to frontier score (0–100) 79.19 Procedures (number) 5 Procedures (number) 1 Time (days) 57 Time (days) 3 Cost (% of income per capita) 36.1 Cost (% of property value) 7.3 Reliability of supply and transparency of tariffs index (0–8) 7 Quality of land administration index (0–30) 20 (rank among 25 cities) 4 Enforcing contracts (rank within country) 3 Distance to frontier score (0–100) 73.23 Time (days) 560 Cost (% of claim value) 17.2 Quality of judicial processes index (0–18) 13.5 FARO (Portugal) (rank among 25 cities) 1 Dealing with (rank among 25 cities) 4 Starting a business (rank within country) 1 construction permits (rank within country) 4 Distance to frontier score (0–100) 90.88 Distance to frontier score (0–100) 73.42 Procedures (number) 6 Procedures (number) 14 Time (days) 6.5 Time (days) 170 Cost (% of income per capita) 2.1 Cost (% of warehouse value) 0.4 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 11 (rank among 25 cities) 20 (rank among 25 cities) 13 Getting electricity Registering property (rank within country) 8 (rank within country) 1 Distance to frontier score (0–100) 78.83 Distance to frontier score (0–100) 79.43 Procedures (number) 6 Procedures (number) 1 Time (days) 68 Time (days) 1 Cost (% of income per capita) 36.1 Cost (% of property value) 7.3 Reliability of supply and transparency of tariffs index (0–8) 7 Quality of land administration index (0–30) 20 (rank among 25 cities) 7 Enforcing contracts (rank within country) 6 Distance to frontier score (0–100) 72.28 Time (days) 595 Cost (% of claim value) 17.2 Quality of judicial processes index (0–18) 13.5 CITY SNAPSHOTS 127 FUNCHAL (Portugal) (rank among 25 cities) 1 Dealing with (rank among 25 cities) 6 Starting a business (rank within country) 1 construction permits (rank within country) 6 Distance to frontier score (0–100) 90.88 Distance to frontier score (0–100) 72.83 Procedures (number) 6 Procedures (number) 14 Time (days) 6.5 Time (days) 159 Cost (% of income per capita) 2.1 Cost (% of warehouse value) 1.5 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 11 (rank among 25 cities) 9 (rank among 25 cities) 13 Getting electricity Registering property (rank within country) 4 (rank within country) 1 Distance to frontier score (0–100) 84.96 Distance to frontier score (0–100) 79.43 Procedures (number) 5 Procedures (number) 1 Time (days) 50 Time (days) 1 Cost (% of income per capita) 34.2 Cost (% of property value) 7.3 Reliability of supply and transparency of tariffs index (0–8) 7 Quality of land administration index (0–30) 20 (rank among 25 cities) 5 Enforcing contracts (rank within country) 4 Distance to frontier score (0–100) 72.82 Time (days) 575 Cost (% of claim value) 17.2 Quality of judicial processes index (0–18) 13.5 LISBON (Portugal) (rank among 25 cities) 1 Dealing with (rank among 25 cities) 5 Starting a business (rank within country) 1 construction permits (rank within country) 5 Distance to frontier score (0–100) 90.88 Distance to frontier score (0–100) 73.10 Procedures (number) 6 Procedures (number) 14 Time (days) 6.5 Time (days) 160 Cost (% of income per capita) 2.1 Cost (% of warehouse value) 1.3 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 11 (rank among 25 cities) 5 (rank among 25 cities) 20 Getting electricity Registering property (rank within country) 2 (rank within country) 8 Distance to frontier score (0–100) 86.45 Distance to frontier score (0–100) 78.35 Procedures (number) 5 Procedures (number) 1 Time (days) 65 Time (days) 10 Cost (% of income per capita) 36.1 Cost (% of property value) 7.3 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 20 (rank among 25 cities) 13 Enforcing contracts (rank within country) 8 Distance to frontier score (0–100) 67.91 Time (days) 755 Cost (% of claim value) 17.2 Quality of judicial processes index (0–18) 13.5 128 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA PONTA DELGADA (Portugal) (rank among 25 cities) 1 Dealing with (rank among 25 cities) 2 Starting a business (rank within country) 1 construction permits (rank within country) 2 Distance to frontier score (0–100) 90.88 Distance to frontier score (0–100) 73.59 Procedures (number) 6 Procedures (number) 14 Time (days) 6.5 Time (days) 169 Cost (% of income per capita) 2.1 Cost (% of warehouse value) 0.4 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 11 (rank among 25 cities) 8 (rank among 25 cities) 13 Getting electricity Registering property (rank within country) 3 (rank within country) 1 Distance to frontier score (0–100) 85.12 Distance to frontier score (0–100) 79.43 Procedures (number) 4 Procedures (number) 1 Time (days) 58 Time (days) 1 Cost (% of income per capita) 38.6 Cost (% of property value) 7.3 Reliability of supply and transparency of tariffs index (0–8) 6 Quality of land administration index (0–30) 20 (rank among 25 cities) 5 Enforcing contracts (rank within country) 4 Distance to frontier score (0–100) 72.82 Time (days) 575 Cost (% of claim value) 17.2 Quality of judicial processes index (0–18) 13.5 PORTO (Portugal) (rank among 25 cities) 1 Dealing with (rank among 25 cities) 1 Starting a business (rank within country) 1 construction permits (rank within country) 1 Distance to frontier score (0–100) 90.88 Distance to frontier score (0–100) 74.04 Procedures (number) 6 Procedures (number) 14 Time (days) 6.5 Time (days) 159 Cost (% of income per capita) 2.1 Cost (% of warehouse value) 0.6 Paid-in minimum capital (% of income per capita) 0.0 Building quality control index (0–15) 11 (rank among 25 cities) 14 (rank among 25 cities) 19 Getting electricity Registering property (rank within country) 6 (rank within country) 7 Distance to frontier score (0–100) 82.71 Distance to frontier score (0–100) 78.59 Procedures (number) 6 Procedures (number) 1 Time (days) 61 Time (days) 8 Cost (% of income per capita) 36.2 Cost (% of property value) 7.3 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 20 (rank among 25 cities) 8 Enforcing contracts (rank within country) 7 Distance to frontier score (0–100) 71.32 Time (days) 630 Cost (% of claim value) 17.2 Quality of judicial processes index (0–18) 13.5 CITY SNAPSHOTS 129 SLOVAKIA BRATISLAVA (Slovakia) (rank among 25 cities) 25 Dealing with (rank among 25 cities) 15 Starting a business (rank within country) 5 construction permits (rank within country) 4 Distance to frontier score (0–100) 81.97 Distance to frontier score (0–100) 59.33 Procedures (number) 8 Procedures (number) 14 Time (days) 26.5 Time (days) 300 Cost (% of income per capita) 1.1 Cost (% of warehouse value) 0.2 Paid-in minimum capital (% of income per capita) 17.2 Building quality control index (0–15) 8 (rank among 25 cities) 12 (rank among 25 cities) 4 Getting electricity Registering property (rank within country) 4 (rank within country) 4 Distance to frontier score (0–100) 83.19 Distance to frontier score (0–100) 90.17 Procedures (number) 5 Procedures (number) 3 Time (days) 89 Time (days) 16.5 Cost (% of income per capita) 244.5 Cost (% of property value) 0.0 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 25.5 (rank among 25 cities) 16 Enforcing contracts (rank within country) 5 Distance to frontier score (0–100) 66.12 Time (days) 775 Cost (% of claim value) 20.5 Quality of judicial processes index (0–18) 13.5 KOSICE (Slovakia) (rank among 25 cities) 22 Dealing with (rank among 25 cities) 14 Starting a business (rank within country) 4 construction permits (rank within country) 2 Distance to frontier score (0–100) 83.72 Distance to frontier score (0–100) 60.74 Procedures (number) 8 Procedures (number) 14 Time (days) 19.5 Time (days) 280 Cost (% of income per capita) 1.1 Cost (% of warehouse value) 0.2 Paid-in minimum capital (% of income per capita) 17.2 Building quality control index (0–15) 8 (rank among 25 cities) 7 (rank among 25 cities) 2 Getting electricity Registering property (rank within country) 3 (rank within country) 2 Distance to frontier score (0–100) 85.29 Distance to frontier score (0–100) 91.24 Procedures (number) 5 Procedures (number) 3 Time (days) 75 Time (days) 7.5 Cost (% of income per capita) 57.2 Cost (% of property value) 0.0 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 25.5 (rank among 25 cities) 10 Enforcing contracts (rank within country) 1 Distance to frontier score (0–100) 69.95 Time (days) 635 Cost (% of claim value) 20.5 Quality of judicial processes index (0–18) 13.5 130 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA PRESOV (Slovakia) (rank among 25 cities) 16 Dealing with (rank among 25 cities) 10 Starting a business (rank within country) 1 construction permits (rank within country) 1 Distance to frontier score (0–100) 84.73 Distance to frontier score (0–100) 62.91 Procedures (number) 8 Procedures (number) 14 Time (days) 15.5 Time (days) 250 Cost (% of income per capita) 1.1 Cost (% of warehouse value) 0.2 Paid-in minimum capital (% of income per capita) 17.2 Building quality control index (0–15) 8 (rank among 25 cities) 6 (rank among 25 cities) 4 Getting electricity Registering property (rank within country) 2 (rank within country) 4 Distance to frontier score (0–100) 86.27 Distance to frontier score (0–100) 90.17 Procedures (number) 5 Procedures (number) 3 Time (days) 66 Time (days) 16.5 Cost (% of income per capita) 57.0 Cost (% of property value) 0.0 Reliability of supply and transparency of tariffs index (0–8) 8 Quality of land administration index (0–30) 25.5 (rank among 25 cities) 11 Enforcing contracts (rank within country) 2 Distance to frontier score (0–100) 69.81 Time (days) 640 Cost (% of claim value) 20.5 Quality of judicial processes index (0–18) 13.5 TRNAVA (Slovakia) (rank among 25 cities) 21 Dealing with (rank among 25 cities) 11 Starting a business (rank within country) 3 construction permits (rank within country) 2 Distance to frontier score (0–100) 83.98 Distance to frontier score (0–100) 61.39 Procedures (number) 8 Procedures (number) 15 Time (days) 18.5 Time (days) 258 Cost (% of income per capita) 1.1 Cost (% of warehouse value) 0.2 Paid-in minimum capital (% of income per capita) 17.2 Building quality control index (0–15) 8 (rank among 25 cities) 19 (rank among 25 cities) 1 Getting electricity Registering property (rank within country) 5 (rank within country) 1 Distance to frontier score (0–100) 80.07 Distance to frontier score (0–100) 91.48 Procedures (number) 5 Procedures (number) 3 Time (days) 89 Time (days) 5.5 Cost (% of income per capita) 244.5 Cost (% of property value) 0.0 Reliability of supply and transparency of tariffs index (0–8) 7 Quality of land administration index (0–30) 25.5 (rank among 25 cities) 14 Enforcing contracts (rank within country) 3 Distance to frontier score (0–100) 67.90 Time (days) 710 Cost (% of claim value) 20.5 Quality of judicial processes index (0–18) 13.5 CITY SNAPSHOTS 131 ZILINA (Slovakia) (rank among 25 cities) 16 Dealing with (rank among 25 cities) 16 Starting a business (rank within country) 1 construction permits (rank within country) 5 Distance to frontier score (0–100) 84.73 Distance to frontier score (0–100) 57.90 Procedures (number) 8 Procedures (number) 14 Time (days) 15.5 Time (days) 320 Cost (% of income per capita) 1.1 Cost (% of warehouse value) 0.2 Paid-in minimum capital (% of income per capita) 17.2 Building quality control index (0–15) 8 (rank among 25 cities) 3 (rank among 25 cities) 3 Getting electricity Registering property (rank within country) 1 (rank within country) 3 Distance to frontier score (0–100) 88.41 Distance to frontier score (0–100) 91.00 Procedures (number) 4 Procedures (number) 3 Time (days) 56 Time (days) 9.5 Cost (% of income per capita) 55.2 Cost (% of property value) 0.0 Reliability of supply and transparency of tariffs index (0–8) 7 Quality of land administration index (0–30) 25.5 (rank among 25 cities) 15 Enforcing contracts (rank within country) 4 Distance to frontier score (0–100) 67.08 Time (days) 740 Cost (% of claim value) 20.5 Quality of judicial processes index (0–18) 13.5 132 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Indicator Snapshots STARTING A BUSINESS Ease of starting Ease of starting Distance Paid-in minimum a business a business to frontier Cost capital (rank among (rank within score Procedures Time (% of income (% of income City (Country) 25 cities) country) (0–100) (number) (days) per capita) per capita) Osijek (Croatia) 13 3 85.50 8 10.5 7.3 12.5 Rijeka (Croatia) 10 2 87.59 7 8 7.4 12.5 Split (Croatia) 9 1 89.55 6 6 7.4 12.5 Varazdin (Croatia) 14 4 85.38 8 11 7.3 12.5 Zagreb (Croatia) 24 5 82.49 8 22.5 7.2 12.5 Brno (Czech Republic) 18 4 84.55 8 20.5 1.0 0.0 Liberec (Czech Republic) 18 4 84.55 8 20.5 1.0 0.0 Olomouc (Czech Republic) 11 1 85.56 8 16.5 1.0 0.0 Ostrava (Czech Republic) 15 3 85.31 8 17.5 1.0 0.0 Plzen (Czech Republic) 18 4 84.55 8 20.5 1.0 0.0 Prague (Czech Republic) 23 7 83.55 8 24.5 1.0 0.0 Usti nad Labem (Czech Republic) 11 1 85.56 8 16.5 1.0 0.0 Braga (Portugal) 1 1 90.88 6 6.5 2.1 0.0 Coimbra (Portugal) 1 1 90.88 6 6.5 2.1 0.0 Evora (Portugal) 1 1 90.88 6 6.5 2.1 0.0 Faro (Portugal) 1 1 90.88 6 6.5 2.1 0.0 Funchal (Portugal) 1 1 90.88 6 6.5 2.1 0.0 Lisbon (Portugal) 1 1 90.88 6 6.5 2.1 0.0 Ponta Delgada (Portugal) 1 1 90.88 6 6.5 2.1 0.0 Porto (Portugal) 1 1 90.88 6 6.5 2.1 0.0 Bratislava (Slovakia) 25 5 81.97 8 26.5 1.1 17.2 Kosice (Slovakia) 22 4 83.72 8 19.5 1.1 17.2 Presov (Slovakia) 16 1 84.73 8 15.5 1.1 17.2 Trnava (Slovakia) 21 3 83.98 8 18.5 1.1 17.2 Zilina (Slovakia) 16 1 84.73 8 15.5 1.1 17.2 INDICATOR SNAPSHOTS 133 DEALING WITH CONSTRUCTION PERMITS Ease of Ease of dealing with dealing with construction construction Distance Cost permits permits to frontier (% of Building quality (rank among (rank within score Procedures Time warehouse control index City (Country) 25 cities) country) (0–100) (number) (days) value) (0–15) Osijek (Croatia) 12 2 61.10 22 143 6.8 12 Rijeka (Croatia) 12 2 61.10 22 136 7.2 12 Split (Croatia) 25 5 43.67 23 227 15.1 12 Varazdin (Croatia) 8 1 66.20 21 112 5.3 12 Zagreb (Croatia) 23 4 54.77 22 146 11.7 12 Brno (Czech Republic) 16 1 57.90 20 236 0.2 8 Liberec (Czech Republic) 20 4 56.67 21 239 0.3 8 Olomouc (Czech Republic) 24 7 54.45 21 270 0.2 8 Ostrava (Czech Republic) 19 3 56.89 20 250 0.2 8 Plzen (Czech Republic) 22 6 55.38 21 257 0.2 8 Prague (Czech Republic) 21 5 56.17 21 246 0.2 8 Usti nad Labem (Czech Republic) 18 2 57.24 20 245 0.3 8 Braga (Portugal) 7 7 66.58 14 259 0.8 11 Coimbra (Portugal) 9 8 65.93 14 265 0.9 11 Evora (Portugal) 3 3 73.53 14 169 0.4 11 Faro (Portugal) 4 4 73.42 14 170 0.4 11 Funchal (Portugal) 6 6 72.83 14 159 1.5 11 Lisbon (Portugal) 5 5 73.10 14 160 1.3 11 Ponta Delgada (Portugal) 2 2 73.59 14 169 0.4 11 Porto (Portugal) 1 1 74.04 14 159 0.6 11 Bratislava (Slovakia) 15 4 59.33 14 300 0.2 8 Kosice (Slovakia) 14 3 60.74 14 280 0.2 8 Presov (Slovakia) 10 1 62.91 14 250 0.2 8 Trnava (Slovakia) 11 2 61.39 15 258 0.2 8 Zilina (Slovakia) 16 5 57.90 14 320 0.2 8 134 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA GETTING ELECTRICITY Reliability of Ease of getting Ease of getting Distance supply and electricity electricity to frontier Cost transparency (rank among (rank within score Procedures Time (% of income of tariffs index City (Country) 25 cities) country) (0–100) (number) (days) per capita) (0–8) Osijek (Croatia) 17 4 81.70 4 55 237.1 5 Rijeka (Croatia) 13 2 82.87 4 73 237.1 6 Split (Croatia) 15 3 82.66 4 75 237.1 6 Varazdin (Croatia) 10 1 84.29 4 60 237.1 6 Zagreb (Croatia) 18 5 80.43 4 65 298.5 5 Brno (Czech Republic) 2 2 89.92 3 110 25.9 8 Liberec (Czech Republic) 25 7 66.32 5 217 193.0 7 Olomouc (Czech Republic) 24 6 67.09 6 169 282.5 7 Ostrava (Czech Republic) 21 3 69.89 6 172 283.2 8 Plzen (Czech Republic) 22 4 69.67 6 174 282.8 8 Prague (Czech Republic) 1 1 95.35 3 60 25.9 8 Usti nad Labem (Czech Republic) 23 5 67.70 5 233 193.0 8 Braga (Portugal) 16 7 82.27 6 65 38.8 8 Coimbra (Portugal) 4 1 87.49 4 65 36.1 7 Evora (Portugal) 11 5 84.19 5 57 36.1 7 Faro (Portugal) 20 8 78.83 6 68 36.1 7 Funchal (Portugal) 9 4 84.96 5 50 34.2 7 Lisbon (Portugal) 5 2 86.45 5 65 36.1 8 Ponta Delgada (Portugal) 8 3 85.12 4 58 38.6 6 Porto (Portugal) 14 6 82.71 6 61 36.2 8 Bratislava (Slovakia) 12 4 83.19 5 89 244.5 8 Kosice (Slovakia) 7 3 85.29 5 75 57.2 8 Presov (Slovakia) 6 2 86.27 5 66 57.0 8 Trnava (Slovakia) 19 5 80.07 5 89 244.5 7 Zilina (Slovakia) 3 1 88.41 4 56 55.2 7 INDICATOR SNAPSHOTS 135 REGISTERING PROPERTY Ease of Ease of registering registering Distance Quality of land property property to frontier Cost administration (rank among (rank within score Procedures Time (% of index City (Country) 25 cities) country) (0–100) (number) (days) property value) (0–30) Osijek (Croatia) 21 1 75.86 5 32 4.0 23.5 Rijeka (Croatia) 22 2 75.02 5 39 4.0 23.5 Split (Croatia) 25 5 71.08 5 72 4.0 23.5 Varazdin (Croatia) 23 3 74.07 5 47 4.0 23.5 Zagreb (Croatia) 23 3 74.07 5 47 4.0 23.5 Brno (Czech Republic) 7 2 80.10 4 24.5 4.0 25.0 Liberec (Czech Republic) 9 4 79.98 4 25.5 4.0 25.0 Olomouc (Czech Republic) 9 4 79.98 4 25.5 4.0 25.0 Ostrava (Czech Republic) 6 1 80.22 4 23.5 4.0 25.0 Plzen (Czech Republic) 11 6 79.74 4 27.5 4.0 25.0 Prague (Czech Republic) 11 6 79.74 4 27.5 4.0 25.0 Usti nad Labem (Czech Republic) 7 2 80.10 4 24.5 4.0 25.0 Braga (Portugal) 16 4 79.31 1 2 7.3 20.0 Coimbra (Portugal) 18 6 79.07 1 4 7.3 20.0 Evora (Portugal) 17 5 79.19 1 3 7.3 20.0 Faro (Portugal) 13 1 79.43 1 1 7.3 20.0 Funchal (Portugal) 13 1 79.43 1 1 7.3 20.0 Lisbon (Portugal) 20 8 78.35 1 10 7.3 20.0 Ponta Delgada (Portugal) 13 1 79.43 1 1 7.3 20.0 Porto (Portugal) 19 7 78.59 1 8 7.3 20.0 Bratislava (Slovakia) 4 4 90.17 3 16.5 0.0 25.5 Kosice (Slovakia) 2 2 91.24 3 7.5 0.0 25.5 Presov (Slovakia) 4 4 90.17 3 16.5 0.0 25.5 Trnava (Slovakia) 1 1 91.48 3 5.5 0.0 25.5 Zilina (Slovakia) 3 3 91.00 3 9.5 0.0 25.5 136 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA ENFORCING CONTRACTS Ease of Ease of enforcing enforcing Distance Quality of contracts contracts to frontier Cost judicial (rank among (rank within score Time (% of processes index City (Country) 25 cities) country) (0–100) (days) claim value) (0–18) Osijek (Croatia) 2 1 74.24 510 15.7 13.0 Rijeka (Croatia) 17 4 65.67 825 15.6 13.0 Split (Croatia) 18 5 65.56 837 15.0 13.0 Varazdin (Croatia) 12 3 69.49 685 15.6 13.0 Zagreb (Croatia) 9 2 70.60 650 15.2 13.0 Brno (Czech Republic) 25 7 51.95 840 33.8 9.5 Liberec (Czech Republic) 24 6 53.86 770 33.8 9.5 Olomouc (Czech Republic) 22 4 55.64 705 33.8 9.5 Ostrava (Czech Republic) 21 3 56.05 690 33.8 9.5 Plzen (Czech Republic) 20 2 56.32 680 33.8 9.5 Prague (Czech Republic) 19 1 56.38 678 33.8 9.5 Usti nad Labem (Czech Republic) 23 5 54.96 730 33.8 9.5 Braga (Portugal) 3 2 73.78 540 17.2 13.5 Coimbra (Portugal) 1 1 74.60 510 17.2 13.5 Evora (Portugal) 4 3 73.23 560 17.2 13.5 Faro (Portugal) 7 6 72.28 595 17.2 13.5 Funchal (Portugal) 5 4 72.82 575 17.2 13.5 Lisbon (Portugal) 13 8 67.91 755 17.2 13.5 Ponta Delgada (Portugal) 5 4 72.82 575 17.2 13.5 Porto (Portugal) 8 7 71.32 630 17.2 13.5 Bratislava (Slovakia) 16 5 66.12 775 20.5 13.5 Kosice (Slovakia) 10 1 69.95 635 20.5 13.5 Presov (Slovakia) 11 2 69.81 640 20.5 13.5 Trnava (Slovakia) 14 3 67.90 710 20.5 13.5 Zilina (Slovakia) 15 4 67.08 740 20.5 13.5 Indicator Details STARTING A BUSINESS IN CROATIA - PROCEDURES REQUIRED TO START A BUSINESS, BY CITY Standard company legal form: Društvo s ograničenom odgovornošću (D.O.O.) Paid-in minimum capital requirement: HRK 10,000 Data as of: February 15, 2018 Osijek Rijeka Split Varazdin Zagreb Comments 1. Check the availability of the company Time (days) 2 0.5 0.5 0.5 3 Checking company name availability is free and can be done online in less than a day. name/ Reserve the company name Name reservation is not mandatory but it has proven necessary in practice to avoid Cost (HRK) 10 no cost no cost no cost 10 rejection after the registration application is submitted. The fee for name reservation is HRK 10. The Court Registry checks the name within 2-3 days. 2. The notary prepares the memorandum Time (days) 1 1 1 1 1 The Public Notary prepares the documentation, which is then signed by the business of association founders and notarized. Cost (HRK) (see (see (see (see (see procedure 3) procedure 3) procedure 3) procedure 3) procedure 3) 3. Register the company with the Time (days) 3 3 2 5 14** Electronic registration is completed within 24 hours. However, after electronic Commercial Court* registration, companies have to submit all documentation in hard copy and obtain the Cost (HRK) 5,545 5,725*** 5,925*** 5,545 5,545 court decision in original, which is typically provided 1 to 4 days later. The deadline for in person registration is 15 days. 4. Order official seal Time (days) 1 1 (included in 1 1 Making a seal is not mandatory, but done in practice in most cases. Official seals are procedure 3) readily available at special seal-making shops. Seals can also be ordered through Hitro. hr offices for an additional fee, as it is done in Split. Cost (HRK) 100 to 250 100 to 250 100 to 250 100 to 250 5. Apply for statistical registration number Time (days) 1 (included in (included in 1 1 Applying for a statistical number can be done at the Croatian Bureau of Statistics (in procedure 3) procedure 3) Zagreb only), through Hitro.hr offices (against a fee of HRK 25) or by mail.     Cost (HRK) 80 80 55 6. Open a bank account Time (days) 1 1 1 1 1 When establishing a company, the founders open a temporary account for the purpose of payment of start-up capital. When the Court inscribes the newly founded company Cost (HRK) no cost no cost no cost no cost no cost into the Court Register and issues a ruling, the bank transforms the existing temporary account into the company's transaction account. 7. Register for VAT and employee income Time (days) 1 1 1 1 1 Once a company is registered at the Commercial Court Register and the State Bureau tax withdrawals**** of Statistics, the company information is automatically entered in the taxpayer register. Cost (HRK) no cost no cost no cost no cost no cost If the company’s total taxable annual income exceeds HRK 300,000, it must register itself as an entity in the VAT system as well. 8. Register with the Croatian Institute for Time (days) 0.5 0.5 0.5 0.5 0.5 The Company must register with the Croatian Institute for Pension Insurance within 24 Pension Insurance (HZMO) and Croatian hours from the start of its operation. The Company must also register its employees, Institute for Health Insurance (HZZO)**** Cost (HRK) no cost no cost no cost no cost no cost which is done exclusively online. Based on the data delivered to the Croatian Institute for Pension, the application for health insurance is done automatically. Source: Doing Business database. *Half or more of new limited liability companies in Rijeka and Split apply for registration at Hitro.hr offices--where they can also simultaneosuly apply for registration with the Statistical office. The uptake of Hitro.hr services is lower in the other cities. **Among the cities surveyed, Zagreb is the only one where the majority of limited liability companies are not incorporated using the e-company service. ***Includes fee for HITRO services and cost for registration with the Statistical office (in Split, it also includes the cost for ordering company seal at Hitro.hr). INDICATOR DETAILS - STARTING A BUSINESS ****Takes place simultaneously with previous procedure. 137 138 STARTING A BUSINESS IN THE CZECH REPUBLIC - PROCEDURES REQUIRED TO START A BUSINESS, BY CITY Standard company legal form: Spolecnost s Rucenim Omezenym (SRO) Paid-in minimum capital requirement: CZK 1 Data as of: February 15, 2018 Brno Liberec Olomouc Ostrava Prague Plzen Usti nad Labem Comments 1. Check the uniqueness of the company's Time (days) 0.5 0.5 0.5 0.5 0.5 0.5 0.5 Business founders can verify the uniqueness of their company's name name using a database on the Ministry of Justice's website (www.justice. cz). Name reservation is also possible through pre-registration of a Cost (CZK) no cost no cost no cost no cost no cost no cost no cost company at the Commercial Registry against a fee of CZK 1,000. 2. Notarize Articles of Association and Lease Time (days) 1 1 1 1 1 1 1 For the articles of association of a simple limited liability company, Agreement the cost of notarization is CZK 2,000. The company must also certify its building lease agreement with a public notary. The cost to certify Cost (CZK) 2,030 2,030 2,030 2,030 2,030 2,030 2,030 the lease agreement with a notary is CKZ 30 +21% VAT. 3. Obtain confirmation of the administrator Time (days) 2 2 2 2 2 2 2 Until the company is registered, the paid-in capital is typically of the capital contribution of the company, blocked in the special bank account. Banks typically require along with the confirmation of the bank notarized articles of association to open a corporate bank account. that the capital contribution is held in the Cost (CZK) no cost no cost no cost no cost no cost no cost no cost company’s special bank account 4. Register with the Trade Licensing Office Time (days) 2 2 2 1 2 2 2 The company must register its business activities with the Trade and obtain extract of the trade license License Office to obtain an extract of its trade license. The Trade License Office must complete the registration process within 5 Cost (CZK) 1,000 1,000 1,000 1,000 1,000 1,000 1,000 working days from the day when all required documents were submitted, and typically does so in 1-3 days. 5. Register in the Commercial Registry of Time (days) 1 1 1 1 1 1 1 Notaries are able to register a limited liability company's (s.r.o.) the Regional Court through a notary information into the commercial register online. The cost of notary services for simplified registration is CZK 1,000 notarial deed + CZK Cost (CZK) 1,300 1,300 1,300 1,300 1,300 1,300 1,300 300 notary fee. Upon company registration, the Commercial Register notifies the Ministry of Interior regarding new company formation triggering automatic set up of an electronic data box. 6. Register for income tax and VAT Time (days) 14 14 10 12 18 14 10 Companies can apply for VAT registration jointly with income tax registration. For VAT, the tax authority performs various checks such as: plans for taxable economic activity, financial, human and other Cost (CZK) no cost no cost no cost no cost no cost no cost no cost resources available, physical seat of the company. Upon registration, the company receives a tax identification number. 7. Register for social security* Time (days) 1 1 1 1 1 1 1 The company must register with social security within 8 days of the date when the first employee starts work. Application may be submitted either online through a data box or in person. Cost (CZK) no cost no cost no cost no cost no cost no cost no cost 8. Register for health insurance* Time (days) 1 1 1 1 1 1 1 The company must register for health insurance within 8 days of DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA the date when the first employee starts work. It is possible to do so online, although each health insurance company has its own Cost (CZK) no cost no cost no cost no cost no cost no cost no cost website. Applications can be submitted through the data box, or in person. Source: Doing Business database. *Takes place simultaneously with previous procedure. STARTING A BUSINESS IN PORTUGAL - PROCEDURES REQUIRED TO START A BUSINESS, BY CITY Standard company legal form: Sociedade por Quotas Paid-in minimum capital requirement: none Ponta Data as of: February 15, 2018 Braga Coimbra Evora Faro Funchal Lisbon Delgada Porto Comments 1. Register at the one-stop shop Time (days) 1 1 1 1 1 1 1 1 "On the Spot Firm" (Empresa na Hora) enables to set up a company in less than an hour at a single contact point. Applicants choose a name from the list of pre-approved names and one of the pre-approved standard company deeds. The company founders Cost (EUR) 360 360 360 360 360 360 360 360 receive a code to access the certificate of incorporation, the corporate identification card, the Social Security number, and the original by-laws. 2. Open a bank account and obtain a Time (days) 1 1 1 1 1 1 1 1 Business founders must open a bank account Bank Identification Number (IBAN) and obtain a Bank Identification Number (IBAN). Cost (EUR) no cost no cost no cost no cost no cost no cost no cost no cost 3. File the declaration of Time (days) 1 1 1 1 1 1 1 1 The declaration of commencement of activity commencement of activity with the Tax has to be submitted to the Tax Authority Authority and register for VAT along with evidence that the company was incorporated. Only certified accountants can Cost (EUR) no cost no cost no cost no cost no cost no cost no cost no cost file the declaration with tax authorities. VAT registration is done when submitting the declaration of commencement of activity. 4. Register with Social Security Time (days) 2 2 2 2 2 2 2 2 The company needs to communicate the admission of employees at www.seg-social. pt. When registering employees for the first time, the employer will have to request login Cost (EUR) no cost no cost no cost no cost no cost no cost no cost no cost credentials on the Social security website. The credentials are sent by post and the employer can now register online the employees. 5. Register for the workers' accident Time (days) 1 1 1 1 1 1 1 1 In order to guarantee an effective insurance at a private insurer compensation of damages arising from work accidents, the Portuguese legislator requires from the employer the transfer of Cost (EUR) no cost no cost no cost no cost no cost no cost no cost no cost all its responsibility to insurance companies, before the entry into force of the relevant agreements. 6. Register employees with the Labor Time (days) 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 According to the Portuguese labor law, Compensation Funds (FCT and FGCT)* employees shall be registered in two Labor Compensation Funds. Registration at FGCT takes place automatically once one registers Cost (EUR) no cost no cost no cost no cost no cost no cost no cost no cost with FCT. Registration is done online, using the same platform and same credentials, as for the social security registration. Source: Doing Business database. INDICATOR DETAILS - STARTING A BUSINESS *Takes place simultaneously with previous procedure. 139 140 STARTING A BUSINESS IN SLOVAKIA - PROCEDURES REQUIRED TO START A BUSINESS, BY CITY Standard company legal form: Spoločnosť s ručením obmedzeným (s.r.o.) Paid-in minimum capital requirement: EUR 2,500 Data as of: February 15, 2018 Bratislava Kosice Presov Trnava Zilina Comments 1. Check the uniqueness of the proposed Time (days) 0.5 0.5 0.5 0.5 0.5 Information on the website of the Commercial Register (www.orsr.sk), which is not company name legally binding, is accessible immediately and without charge. Cost (EUR) no cost no cost no cost no cost no cost 2. Certify signatures on articles of Time (days) 1 1 1 1 1 The fee for the verification of a signature by a Notary is EUR 1.99 (excluding VAT). association and related documents The municipal Registrar's Office and the District Authority are also authorized to verify signatures. The fee for the verification of a signature at the Registrar´s Office is EUR Cost (EUR) 7.5 7.5 7.5 7.5 7.5 1.50 or EUR 7.50 for the verification of 5 signatures. 3. Pay capital contributions and receive an Time (days) 1 1 1 1 1 The minimum shareholder contribution is EUR 750. Before registering a company, at affidavit from a custodian of funds least 30% of each shareholder´s contribution and 50% (EUR 2,500) of the minimum registered capital must be paid. The trustee is obliged to issue an affidavit concerning Cost (EUR) no cost no cost no cost no cost no cost the paid in capital contribution in written form. 4. Obtain at the tax authority office a form Time (days) 5 3 2 3 3 To start up a limited liability company, it is necessary to obtain at the tax authority showing the partners tax arrears office a form showing the partners tax arrears. If the tax debits of each partner exceed EUR 170, it is not possible to start up a limited liability company. Cost (EUR) no cost no cost no cost no cost no cost 5. Apply at the One-stop shop for trade Time (days) 9 6 5 7 5 At the Trade Licensing Office, one can apply for trade license, commercial registration license, register for income tax and with and income tax with one application form. The electronic application for a standard the District Court trade license is free of charge and it's done on the spot. The fee for online commercial Cost (EUR) 150 150 150 150 150 registration is EUR 150 and is done within 2 days. Tax registration can take between 2 and 6 days. 6. Register for VAT Time (days) 10 8 6 6 5 A company is obliged by law to register for VAT if the company reaches turnover of at least EUR 49,790. In addition, companies can register for VAT voluntarily, as soon as they are registered into the Company Register in order to satisfy their business needs. Cost (EUR) no cost no cost no cost no cost no cost 7. Register with pension, sickness, and Time (days) 1 1 1 1 1 For social security, the company must register itself as an employer within eight days disability insurance and unemployment following the day it started to employ at least one employee; it must also register all insurance at the local social insurance new employees with the Social Insurance Company before they begin to work. company* Cost (EUR) no cost no cost no cost no cost no cost 8. Register the employer and employees Time (days) 1 1 1 1 1 Once a new company becomes an employer, it has to register as such with the health at a health insurance company* insurance company/companies of choice. If employees are insured in multiple health insurance companies, the company has to be registered as employer in all of the Cost (EUR) no cost no cost no cost no cost no cost relevant ones. DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Source: Doing Business database. *Takes place simultaneously with previous procedure. INDICATOR DETAILS - DEALING WITH CONSTRUCTION PERMITS 141 Procedure 8*. Receive clearance from Procedure 17*. Receive random the Local Water Authority inspection from labor inspectorate LIST OF PROCEDURES Agency: Waterworks Osijek regarding work safety DEALING WITH CONSTRUCTION Time: 13 days Agency: Labor Inspectorate PERMITS Cost: HRK 626 Time: 1 day Cost: No cost CROATIA Procedure 9*. Receive clearance from Osijek (Croatia) the Sanitary Inspection Procedure 18*. Receive random Agency: Sanitary inspection inspection from the Ministry of Warehouse value: HRK 3,990,156 (USD 605,500) Data as of: February 15, 2018 Time: 10 days Construction and Physical Planning Cost: HRK 70 Agency: Ministry of Construction and Physical Planning - Building Inspection Procedure 1. Obtain geomechanics study Procedure 10*. Receive clearance from Time: 1 day (soil study) the Inspectorate for Fire at the Ministry Cost: No cost Agency: Private Firm Time: 15 days of Interior Affairs Agency: Inspectorate for Fire at the Ministry of Procedure 19. Obtain water and Cost: HRK 12,750 Interior Affairs sewerage connection Time: 7 days Agency: Osijek Waterworks Procedure 2*. Hire a geodetic engineer Cost: HRK 350 Time: 15 days to produce a geodetic study Cost: HRK 9,000 Agency: Private Firm Time: 15 days Procedure 11*. Obtain excerpt from the Land Registry for subject and bordering Procedure 20*. Apply for occupancy Cost: HRK 7,250 lands (use) permit Agency: Land Registry Agency: Municipal office for physical planning Procedure 3*. Obtain notification and construction Time: 1 day on conditions from waste collection Time: 1 day Cost: HRK 20 department Cost: HRK 20 Agency: Waste Collection Department Time: 14 days Procedure 12. Request and obtain building permit Procedure 21. Receive final inspection Cost: No cost Agency: Municipal office for physical planning Agency: Municipal office for physical planning and construction and construction Procedure 4*. Obtain notification Time: 30 days Time: 1 day on conditions from the local water Cost: HRK 1,070 Cost: HRK 2,000 authority Agency: Waterworks Osijek Procedure 13. Obtain decision from the Procedure 22. Receive occupancy (use) Time: 14 days Municipal Authority regarding utilities permit Cost: No cost Agency: Municipal Authority Agency: Municipal office for physical planning Time: 30 days and construction Procedure 5*. Obtain notification on Cost: HRK 117,045 Time: 21 days conditions from the Inspectorate for Fire Cost: HRK 1,070 at the Ministry of Interior Affairs Procedure 14*. Pay water contribution Agency: Inspectorate for Fire at the Ministry of DEALING WITH CONSTRUCTION PERMITS Interior Affairs to the state company Croatian Waters (Hrvatske Vode) Rijeka (Croatia) Time: 11 days Agency: Croatian Waters (Hrvatske Vode) Warehouse value: HRK 3,990,156 (USD 605,500) Cost: No cost Time: 30 days Data as of: February 15, 2018 Cost: HRK 39,210 Procedure 6*. Obtain notification on conditions from National Croatian Procedure 1. Obtain geomechanics study Electric Grid Procedure 15*. Hire an external (soil study) Agency: HEP Distribution System Operator - supervising engineer to conduct Agency: Private Firm Elektroslavonija Osijek inspections during construction Time: 15 days Time: 11 days Agency: Private Firm Cost: HRK 25,000 Cost: No cost Time: 1 day Cost: HRK 79,803 Procedure 2*. Hire a geodetic engineer Procedure 7. Receive clearance from the to produce a geodetic study National Croatian Electric Grid Procedure 16. Submit commencement Agency: Private Firm Agency: HEP Distribution System Operator - notice Time: 15 days Elektroslavonija Osijek Agency: Municipal office for physical planning Cost: HRK 13,000 Time: 25 days and construction Cost: No cost Time: 1 day Cost: HRK 20 *Simultaneous with previous procedure 142 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 3*. Obtain notification on Procedure 11*. Obtain excerpt from the Procedure 19. Obtain water and conditions from National Croatian Land Registry for subject and bordering sewerage connection Electric Grid lands Agency: Waterworks Rijeka Agency: HEP Distribution System Operator - Agency: Land Registry Time: 23 days Elektroprimorje Rijeka Time: 1 day Cost: HRK 17,000 Time: 22 days Cost: HRK 20 Cost: No cost Procedure 20*. Apply for occupancy Procedure 12. Request and obtain (use) permit Procedure 4*. Obtain notification building permit Agency: Municipal office for physical planning on conditions from the local water Agency: Municipal office for physical planning and construction authority and construction Time: 1 day Agency: Waterworks Rijeka Time: 30 days Cost: HRK 20 Time: 17 days Cost: HRK 1,070 Cost: No cost Procedure 21. Receive final inspection Procedure 13. Obtain decision from the Agency: Municipal office for physical planning Procedure 5*. Obtain notification on Municipal Authority regarding utilities and construction conditions from the Inspectorate for Fire Agency: Municipal Authority Time: 1 day at the Ministry of Interior Affairs Time: 23 days Cost: HRK 2,040 Agency: Inspectorate for Fire at the Ministry of Cost: HRK 107,915 Interior Affairs Procedure 22. Receive occupancy (use) Time: 17 days Procedure 14*. Pay water contribution permit Cost: No cost to the state company Croatian Waters Agency: Municipal office for physical planning (Hrvatske Vode) and construction Procedure 6*. Obtain notification Agency: Croatian Waters (Hrvatske Vode) Time: 15 days on conditions from waste collection Time: 15 days Cost: HRK 1,070 department Cost: HRK 39,210 Agency: Waste Collection Department DEALING WITH CONSTRUCTION PERMITS Time: 9 days Procedure 15*. Hire an external Split (Croatia) Cost: No cost supervising engineer to conduct Warehouse value: HRK 3,990,156 (USD 605,500) inspections during construction Data as of: February 15, 2018 Procedure 7. Receive clearance from the Agency: Private Firm Sanitary Inspection Time: 1 day Procedure 1. Obtain geomechanics study Agency: Sanitary inspection Cost: HRK 79,803 (soil study) Time: 15 days Agency: Private Firm Cost: HRK 70 Procedure 16. Submit commencement Time: 15 days notice Cost: HRK 20,000 Procedure 8*. Receive clearance from Agency: Municipal office for physical planning the local water authority and construction Procedure 2*. Hire a geodetic engineer Agency: Waterworks Rijeka Time: 1 day to produce a geodetic study Time: 15 days Cost: HRK 20 Agency: Private Firm Cost: No cost Time: 15 days Procedure 17*. Receive random Cost: HRK 11,500 Procedure 9*. Receive clearance from inspection from labor inspectorate the Inspectorate for Fire at the Ministry regarding work safety Procedure 3*. Obtain notification on of Interior Affairs Agency: Labor Inspectorate conditions from National Croatian Agency: Inspectorate for Fire at the Ministry of Time: 1 day Electric Grid Interior Affairs Cost: No cost Agency: HEP Distribution System Operator Time: 15 days - Elektrodalmacija Split Cost: HRK 350 Procedure 18*. Receive random Time: 30 days inspection from the Ministry of Cost: No cost Procedure 10*. Receive clearance from Construction and Physical Planning the National Croatian Electric Grid Agency: Ministry of Construction and Physical Procedure 4*. Obtain notification on Agency: HEP Distribution System Operator - Planning - Building Inspection conditions from the Inspectorate for Fire Elektroprimorje Rijeka Time: 1 day at the Ministry of Interior Affairs Time: 9 days Cost: No cost Agency: Inspectorate for Fire at the Ministry of Cost: No cost Interior Affairs Time: 12 days Cost: No cost *Simultaneous with previous procedure INDICATOR DETAILS - DEALING WITH CONSTRUCTION PERMITS 143 Procedure 5*. Obtain notification Procedure 14. Obtain decision from the Procedure 23. Receive occupancy (use) on conditions from waste collection Municipal Authority regarding utilities permit department Agency: Municipal Authority Agency: Municipal office for physical planning Agency: Waste Collection Department Time: 20 days and construction Time: 12 days Cost: HRK 458,621 Time: 30 days Cost: No cost Cost: HRK 1,070 Procedure 15*. Pay water contribution DEALING WITH CONSTRUCTION PERMITS Procedure 6*. Obtain notification to the state company Croatian Waters on conditions from the local water (Hrvatske Vode) Varazdin (Croatia) authority Agency: Croatian Waters (Hrvatske Vode) Warehouse value: HRK 3,990,156 (USD 605,500) Agency: Waterworks and sewerage Split Time: 15 days Data as of: February 15, 2018 Time: 12 days Cost: HRK 39,210 Cost: No cost Procedure 1. Obtain geomechanics study Procedure 16*. Hire an external (soil study) Procedure 7. Receive clearance from the supervising engineer to conduct Agency: Private Firm National Croatian Electric Grid inspections during construction Time: 15 days Agency: HEP Distribution System Operator Agency: Private Firm Cost: HRK 12,000 - Elektrodalmacija Split Time: 1 day Time: 20 days Cost: HRK 59,852 Procedure 2*. Hire a geodetic engineer Cost: No cost to produce a geodetic study Procedure 17. Submit commencement Agency: Private Firm Procedure 8*. Receive clearance from notice Time: 15 days the Inspectorate for Fire at the Ministry Agency: Municipal office for physical planning Cost: HRK 9,000 of Interior Affairs and construction Agency: Inspectorate for Fire at the Ministry of Time: 1 day Interior Affairs Procedure 3*. Obtain notification on Cost: HRK 20 Time: 20 days conditions from the Inspectorate for Fire Cost: HRK 350 at the Ministry of Interior Affairs Procedure 18*. Receive random Agency: Inspectorate for Fire at the Ministry of inspection from labor inspectorate Interior Affairs Procedure 9*. Receive clearance from regarding work safety Time: 14 days the waste collection department Agency: Labor Inspectorate Cost: No cost Agency: Waste Collection Department Time: 1 day Time: 10 days Cost: No cost Procedure 4*. Obtain notification on Cost: No cost conditions from National Croatian Procedure 19*. Receive random Electric Grid Procedure 10*. Receive clearance from inspection from the Ministry of Agency: HEP Distribution System Operator - the Sanitary Inspection Construction and Physical Planning Elektra Varazdin Agency: Sanitary inspection Agency: Ministry of Construction and Physical Time: 14 days Time: 10 days Planning - Building Inspection Cost: No cost Cost: HRK 70 Time: 1 day Cost: No cost Procedure 5*. Obtain notification Procedure 11*. Receive clearance from on conditions from waste collection the local water authority Procedure 20. Obtain water and department Agency: Waterworks and sewerage Split sewerage connection Agency: Waste Collection Department Time: 10 days Agency: Waterworks and Sewerage Split Time: 14 days Cost: No cost Time: 30 days Cost: No cost Cost: HRK 8,000 Procedure 12*. Obtain excerpt from the Procedure 6*. Obtain notification Land Registry for subject and bordering Procedure 21*. Apply for occupancy on conditions from the local water lands (use) permit authority Agency: Land Registry Agency: Municipal office for physical planning Agency: Water and sewerage - Varkom d.d. Time: 3 days and construction Time: 14 days Cost: HRK 20 Time: 1 day Cost: No cost Cost: HRK 20 Procedure 13. Request and obtain Procedure 7. Receive clearance from the building permit Procedure 22. Receive final inspection Local Water Authority Agency: Municipal office for physical planning Agency: Municipal office for physical planning Agency: Water and sewerage - Varkom d.d. and construction and construction Time: 14 days Time: 90 days Time: 1 day Cost: HRK 358 Cost: HRK 1,070 Cost: HRK 2,000 *Simultaneous with previous procedure 144 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 8*. Receive clearance from Procedure 16. Submit commencement Procedure 3*. Obtain notification on the National Croatian Electric Grid notice conditions from the Inspectorate for Fire Agency: HEP Distribution System Operator - Agency: Municipal office for physical planning at the Ministry of Interior Affairs Elektra Varazdin and construction Agency: Inspectorate for Fire at the Ministry of Time: 8 days Time: 1 day Interior Affairs Cost: No cost Cost: HRK 20 Time: 15 days Cost: No cost Procedure 9*. Receive clearance from Procedure 17*. Receive random the Sanitary Inspection inspection from the Ministry of Procedure 4*. Obtain notification on Agency: Sanitary inspection Construction and Physical Planning conditions from National Croatian Time: 5 days Agency: Ministry of Construction and Physical Electric Grid Cost: HRK 70 Planning - Building Inspection Agency: HEP Distribution System Operator - Time: 1 day Elektra Zagreb Procedure 10*. Receive clearance from Cost: No cost Time: 15 days the Inspectorate for Fire at the Ministry Cost: No cost of Interior Affairs Procedure 18. Obtain water and Agency: Inspectorate for Fire at the Ministry of sewerage connection Procedure 5*. Obtain notification Interior Affairs Agency: Waterworks Varazdin on conditions from waste collection Time: 8 days Time: 10 days department Cost: HRK 350 Cost: HRK 7,000 Agency: Waste Collection Department Time: 15 days Procedure 11*. Obtain excerpt from the Procedure 19*. Apply for occupancy Cost: No cost Land Registry for subject and bordering (use) permit lands Agency: Municipal office for physical planning Procedure 6*. Obtain notification Agency: Land Registry and construction on conditions from the local water Time: 1 day Time: 1 day authority Cost: HRK 20 Cost: HRK 20 Agency: Zagreb Holding d.o.o. - Water and sewerage Procedure 12. Request and obtain Procedure 20. Receive final inspection Time: 15 days building permit Agency: Municipal office for physical planning Cost: No cost Agency: Municipal office for physical planning and construction and construction Time: 1 day Procedure 7. Receive clearance from the Time: 15 days Cost: HRK 2,375 waste collection department Cost: HRK 1,070 Agency: Waste Collection Department Procedure 21. Receive occupancy (use) Time: 30 days Procedure 13. Obtain decision from the permit Cost: No cost Municipal Authority regarding utilities Agency: Municipal office for physical planning Agency: Municipal Authority and construction Procedure 8*. Receive clearance from Time: 30 days Time: 21 days the Sanitary Inspection Cost: HRK 58,520 Cost: HRK 1,070 Agency: Sanitary Inspection Time: 24 days DEALING WITH CONSTRUCTION PERMITS Procedure 14*. Pay water contribution Cost: HRK 70 to the state company Croatian Waters Zagreb (Croatia) (Hrvatske Vode) Warehouse value: HRK 3,990,156 (USD 605,500) Procedure 9*. Receive clearance from Agency: Croatian Waters (Hrvatske Vode) Data as of: February 15, 2018 the National Croatian Electric Grid Time: 15 days Agency: HEP Distribution System Operator - Cost: HRK 39,210 Elektra Zagreb Procedure 1. Obtain geomechanics study Time: 15 days (soil study) Procedure 15*. Hire an external Cost: No cost Agency: Private Firm supervising engineer to conduct Time: 15 days inspections during construction Cost: HRK 25,000 Procedure 10*. Receive clearance from Agency: Private Firm the local water authority Time: 1 day Agency: Zagreb Holding d.o.o. - Water and Procedure 2*. Hire a geodetic engineer Cost: HRK 79,803 sewerage to produce a geodetic study Time: 14 days Agency: Private Firm Cost: No cost Time: 15 days Cost: HRK 10,000 *Simultaneous with previous procedure INDICATOR DETAILS - DEALING WITH CONSTRUCTION PERMITS 145 Procedure 11*. Receive clearance from Procedure 19. Obtain water and Procedure 4*. Obtain project design the Inspectorate for Fire at the Ministry sewerage connection clearance for the zoning permit from the of Interior Affairs Agency: Zagreb Holding d.o.o. - Water and Fire Department Agency: Inspectorate for Fire at the Ministry of sewerage Agency: Fire Department Interior Affairs Time: 20 days Time: 30 days Time: 25 days Cost: HRK 8,000 Cost: No cost Cost: HRK 350 Procedure 20*. Apply for occupancy Procedure 5*. Obtain project design Procedure 12*. Obtain excerpt from the (use) permit clearance for the zoning permit from the Land Registry for subject and bordering Agency: Municipal office for physical planning Transport Office lands and construction Agency: Municipality, Transport Office Agency: Land Registry Time: 1 day Time: 25 days Time: 1 day Cost: HRK 20 Cost: CZK 500 Cost: HRK 20 Procedure 21. Receive final inspection Procedure 6*. Confirm possibility to Procedure 13. Request and obtain Agency: Municipal office for physical planning connect and obtain technical conditions building permit and construction from the local electricity distribution Agency: Municipal office for physical planning Time: 1 day company and construction Cost: HRK 2,040 Agency: E.ON Distribuce, a.s. Time: 30 days Time: 23 days Cost: HRK 1,070 Procedure 22. Receive occupancy (use) Cost: No cost permit Procedure 14. Obtain decision from the Agency: Municipal office for physical planning Procedure 7. Request and obtain the Municipal Authority regarding utilities and construction zoning permit Agency: Municipal Authority Time: 21 days Agency: Municipality, Building Office Time: 22 days Cost: HRK 1,070 Time: 55 days Cost: HRK 292,613 Cost: CZK 20,000 DEALING WITH CONSTRUCTION PERMITS Procedure 15*. Pay water contribution Procedure 8. Obtain project design to the state company Croatian Waters CZECH REPUBLIC clearance for the construction permit (Hrvatske Vode) from the Transport Office Agency: Croatian Waters (Hrvatske Vode) Brno (Czech Republic) Agency: Municipality, Transport Office Time: 15 days Warehouse value: CZK 21,036,007 (USD 878,500) Time: 30 days Cost: HRK 65,272 Data as of: February 15, 2018 Cost: No cost Procedure 16*. Hire an external Procedure 1 . Obtain project design Procedure 9*. Obtain project design supervising engineer to conduct clearance for the zoning permit from the clearance from the local water and inspections during construction Public Health Office sewerage company Agency: Private Firm Agency: Public Health Office Agency: Brněnské vodárny a kanalizace, a.s. Time: 1 day Time: 30 days Time: 25 days Cost: HRK 59,852 Cost: No cost Cost: No cost Procedure 17. Submit commencement Procedure 2*. Confirm possibility to Procedure 10*. Obtain project notice connect and obtain technical conditions design clearance from the electricity Agency: Municipal office for physical planning from the local water and sewerage distribution company and construction company Agency: E.ON Distribuce, a.s. Time: 1 day Agency: Brněnské vodárny a kanalizace, a.s. Time: 20 days Cost: HRK 20 Time: 30 days Cost: No cost Cost: No cost Procedure 18*. Receive random Procedure 11*. Obtain project design inspection from the Ministry of Procedure 3*. Obtain project design clearance for the construction permit Construction and Physical Planning clearance for the zoning permit from the from the Public Health Office Agency: Ministry of Construction and Physical Environmental Department Agency: Public Health Office Planning - Building Inspection Agency: Municipality, Environmental Time: 21 days Time: 1 day Department Cost: No cost Cost: No cost Time: 30 days Cost: No cost *Simultaneous with previous procedure 146 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 12*. Obtain project design DEALING WITH CONSTRUCTION PERMITS Procedure 8. Request and obtain the clearance for the construction permit Liberec (Czech Republic) zoning permit from the Fire Department Agency: Municipality, Building Office Agency: Fire Department Warehouse value: CZK 21,036,007 (USD 878,500) Time: 60 days Time: 18 days Data as of: February 15, 2018 Cost: CZK 20,000 Cost: No cost Procedure 1. Hold a preliminary meeting Procedure 9. Obtain project design Procedure 13. Request and obtain the with the Environmental Department clearance for the construction permit construction permit Agency: Municipality, Environmental from the Public Health Office Department Agency: Municipality, Building Office Agency: Public Health Office Time: 1 day Time: 41 days Time: 30 days Cost: No cost Cost: CZK 10,000 Cost: No cost Procedure 2 . Confirm possibility to Procedure 14. Request and obtain water Procedure 10*. Obtain project design connect and obtain technical conditions and sewerage connection clearance from the local water and from the local water and sewerage Agency: Brněnské vodárny a kanalizace, a.s. sewerage company company Time: 18 days Agency: Severočeské vodovody a kanalizace, a.s. Agency: Severočeské vodovody a kanalizace, a.s. Cost: CZK 4,000 Time: 30 days Time: 30 days Cost: No cost Cost: No cost Procedure 15*. Request a private geodesist to survey the land after Procedure 11*. Obtain project design Procedure 3*. Confirm possibility to construction clearance for the construction permit connect and obtain technical conditions Agency: Authorized Geodesist from the Fire Department from the local electricity distribution Time: 23 days Agency: Fire Department company Cost: CZK 15,000 Time: 30 days Agency: ČEZ Distribuce, a.s. Cost: No cost Time: 30 days Procedure 16*. Request the occupancy Cost: No cost permit Procedure 12*. Obtain project design Agency: Municipality, Building Office clearance for the construction permit Procedure 4*. Obtain project design Time: 1 day from the Transport Office clearance for the zoning permit from the Cost: CZK 1,000 Agency: Municipality, Transport Office Environmental Department Time: 28 days Agency: Municipality, Environmental Procedure 17. Receive the final Cost: No cost Department inspection Time: 30 days Agency: Municipality, Building Office Cost: No cost Procedure 13*. Obtain project Time: 1 day design clearance from the electricity Cost: No cost distribution company Procedure 5*. Obtain project design Agency: ČEZ Distribuce, a.s. clearance for the zoning permit from the Procedure 18. Receive the occupancy Time: 15 days Public Health Office permit Cost: No cost Agency: Public Health Office Agency: Municipality, Building Office Time: 30 days Time: 15 days Cost: No cost Procedure 14. Request and obtain the Cost: No cost construction permit Agency: Municipality, Building Office Procedure 6*. Obtain project design Procedure 19. Request and obtain the Time: 30 days clearance for the zoning permit from the evidence number for the building Cost: CZK 10,000 Transport Office Agency: Municipality, Building Office Agency: Municipality, Transport Office Time: 7 days Time: 30 days Procedure 15. Request and obtain water Cost: No cost Cost: CZK 500 and sewerage connection Agency: Severočeské vodovody a kanalizace, a.s. Procedure 20. Register the building with Time: 30 days Procedure 7*. Obtain project design the Cadaster Cost: CZK 6,250 clearance for the zoning permit from the Agency: Cadastral Office Fire Department Time: 30 days Agency: Fire Department Procedure 16*. Request a private Cost: No cost Time: 30 days geodesist to survey the land after Cost: No cost construction Agency: Authorized Geodesist Time: 15 days Cost: CZK 15,000 *Simultaneous with previous procedure INDICATOR DETAILS - DEALING WITH CONSTRUCTION PERMITS 147 Procedure 17*. Request the occupancy Procedure 4*. Obtain project design Procedure 12*. Obtain project design permit clearance for the zoning permit from the clearance for the construction permit Agency: Municipality, Building Office Public Health Office from the Public Health Office Time: 1 day Agency: Public Health Office Agency: Public Health Office Cost: CZK 1,000 Time: 30 days Time: 30 days Cost: No cost Cost: No cost Procedure 18. Receive the final inspection Procedure 5*. Obtain project design Procedure 13*. Obtain project design Agency: Municipality, Building Office clearance for the zoning permit from the clearance for the construction permit Time: 1 day Fire Department from the Transport Office Cost: No cost Agency: Fire Department Agency: Municipality, Transport Office Time: 30 days Time: 30 days Procedure 19. Receive the occupancy Cost: No cost Cost: No cost permit Agency: Municipality, Building Office Procedure 6*. Confirm possibility to Procedure 14. Request and obtain the Time: 15 days connect and obtain technical conditions construction permit Cost: No cost from the local water and sewerage Agency: Municipality, Building Office company Time: 45 days Procedure 20. Request and obtain the Agency: Moravská vodárenská, a.s. Cost: CZK 10,000 evidence number for the building Time: 22 days Agency: Municipality, Building Office Cost: No cost Procedure 15. Request and obtain water Time: 5 days and sewerage connection Cost: No cost Procedure 7*. Confirm possibility to Agency: Moravská vodárenská, a.s. connect and obtain technical conditions Time: 30 days Procedure 21. Register the building with from the local electricity distribution Cost: CZK 5,008 the Cadaster company Agency: Cadastral Office Agency: ČEZ Distribuce, a.s. Procedure 16*. Request a private Time: 30 days Time: 22 days geodesist to survey the land after Cost: No cost Cost: No cost construction Agency: Authorized Geodesist DEALING WITH CONSTRUCTION PERMITS Procedure 8. Request and obtain the Time: 25 days Olomouc (Czech Republic) zoning permit Cost: CZK 15,000 Agency: Municipality, Building Office Warehouse value: CZK 21,036,007 (USD 878,500) Time: 60 days Procedure 17*. Request the occupancy Data as of: February 15, 2018 Cost: CZK 20,000 permit Agency: Municipality, Building Office Procedure 1. Hold a preliminary meeting Procedure 9. Obtain project design Time: 1 day with the Environmental Department clearance for the construction permit Cost: CZK 1,000 Agency: Municipality, Environmental from the Fire Department Department Agency: Fire Department Procedure 18. Receive the final Time: 1 day Time: 45 days inspection Cost: No cost Cost: No cost Agency: Municipality, Building Office Time: 1 day Procedure 2. Obtain project design Procedure 10*. Obtain project Cost: No cost clearance for the zoning permit from the design clearance from the electricity Environmental Department distribution company Procedure 19. Receive the occupancy Agency: Municipality, Environmental Agency: ČEZ Distribuce, a.s. permit Department Time: 25 days Agency: Municipality, Building Office Time: 30 days Cost: No cost Time: 15 days Cost: No cost Cost: No cost Procedure 3*. Obtain project design Procedure 11*. Obtain project design clearance for the zoning permit from the clearance from the local water and Procedure 20. Request and obtain the Transport Office sewerage company evidence number for the building Agency: Moravská vodárenská, a.s. Agency: Municipality, Building Office Agency: Municipality, Transport Office Time: 30 days Time: 10 days Time: 30 days Cost: No cost Cost: No cost Cost: CZK 500 *Simultaneous with previous procedure 148 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 21. Register the building with Procedure 7. Request and obtain the Procedure 16*. Request the occupancy the Cadaster zoning permit permit Agency: Cadastral Office Agency: Municipality, Building Office Agency: Municipality, Building Office Time: 30 days Time: 60 days Time: 1 day Cost: No cost Cost: CZK 20,000 Cost: CZK 1,000 DEALING WITH CONSTRUCTION PERMITS Procedure 8. Obtain project design Procedure 17. Receive the final Ostrava (Czech Republic) clearance from the local water and inspection sewerage company Agency: Municipality, Building Office Warehouse value: CZK 21,036,007 (USD 878,500) Agency: Ostravské vodárny a kanalizace, a.s. Time: 1 day Data as of: February 15, 2018 Time: 30 days Cost: No cost Cost: No cost Procedure 1. Obtain project design clearance for the zoning permit from the Procedure 18. Receive the occupancy Environmental Department Procedure 9*. Obtain project design permit Agency: Municipality, Environmental clearance from the electricity Agency: Municipality, Building Office Department distribution company Time: 11 days Time: 30 days Agency: ČEZ Distribuce, a.s. Cost: No cost Cost: No cost Time: 30 days Cost: No cost Procedure 19. Request and obtain the Procedure 2*. Confirm possibility to evidence number for the building connect and obtain technical conditions Procedure 10*. Obtain project design Agency: Municipality, Building Office from the local water and sewerage clearance for the construction permit Time: 13 days company from the Public Health Office Cost: No cost Agency: Ostravské vodárny a kanalizace, a.s. Agency: Public Health Office Time: 30 days Time: 30 days Procedure 20. Register the building with Cost: No cost Cost: No cost the Cadaster Agency: Cadastral Office Procedure 3*. Obtain project design Procedure 11*. Obtain project design Time: 22 days clearance for the zoning permit from the clearance for the construction permit Cost: No cost Public Health Office from the Transport Office Agency: Municipality, Transport Office DEALING WITH CONSTRUCTION PERMITS Agency: Public Health Office Time: 30 days Time: 30 days Plzen (Czech Republic) Cost: No cost Cost: No cost Warehouse value: CZK 21,036,007 (USD 878,500) Data as of: February 15, 2018 Procedure 4*. Obtain project design Procedure 12*. Obtain project design clearance for the zoning permit from the clearance for the construction permit Procedure 1 . Hold a preliminary Fire Department from the Fire Department meeting with the Environmental Agency: Fire Department Agency: Fire Department Department Time: 25 days Time: 23 days Agency: Municipality, Environmental Cost: No cost Cost: No cost Department Time: 1 day Procedure 5*. Obtain project design Procedure 13. Request and obtain the Cost: No cost clearance for the zoning permit from the construction permit Transport Office Agency: Municipality, Building Office Procedure 2. Confirm possibility to Agency: Municipality, Transport Office Time: 48 days connect and obtain technical conditions Time: 25 days Cost: CZK 10,000 from the local water and sewerage Cost: CZK 500 company Procedure 14. Request and obtain water Agency: Vodárna Plzeň, a.s. Procedure 6*. Confirm possibility to and sewerage connection Time: 30 days connect and obtain technical conditions Agency: Ostravské vodárny a kanalizace, a.s. Cost: No cost from the local electricity distribution Time: 30 days company Cost: CZK 5,000 Procedure 3*. Obtain project design Agency: ČEZ Distribuce, a.s. clearance for the zoning permit from the Time: 20 days Procedure 15*. Request a private Environmental Department Cost: No cost geodesist to survey the land after Agency: Municipality, Environmental construction Department Agency: Authorized Geodesist Time: 30 days Time: 22 days Cost: No cost Cost: CZK 15,000 *Simultaneous with previous procedure INDICATOR DETAILS - DEALING WITH CONSTRUCTION PERMITS 149 Procedure 4*. Obtain project design Procedure 12*. Obtain project design Procedure 21. Register the building with clearance for the zoning permit from the clearance for the construction permit the Cadaster Public Health Office from the Transport Office Agency: Cadastral Office Agency: Public Health Office Agency: Municipality, Transport Office Time: 30 days Time: 30 days Time: 30 days Cost: No cost Cost: No cost Cost: No cost DEALING WITH CONSTRUCTION PERMITS Procedure 5*. Obtain project design Procedure 13*. Obtain project design Prague (Czech Republic) clearance for the zoning permit from the clearance for the construction permit Warehouse value: CZK 21,036,007 (USD 878,500) Fire Department from the Fire Department Data as of: February 15, 2018 Agency: Fire Department Agency: Fire Department Time: 30 days Time: 30 days Procedure 1. Hold a preliminary meeting Cost: No cost Cost: No cost with the Environmental Department Agency: Municipality, Environmental Procedure 6*. Confirm possibility to Procedure 14. Request and obtain the Department connect and obtain technical conditions construction permit Time: 1 day from the local electricity distribution Agency: Municipality, Building Office Cost: No cost company Time: 40 days Agency: ČEZ Distribuce, a.s. Cost: CZK 10,000 Procedure 2. Obtain project design Time: 20 days clearance for the zoning permit from the Cost: No cost Procedure 15. Request and obtain water Public Health Office and sewerage connection Agency: Public Health Office Procedure 7*. Obtain project design Agency: Vodárna Plzeň, a.s. Time: 30 days clearance for the zoning permit from the Time: 30 days Cost: No cost Transport Office Cost: CZK 6,000 Agency: Municipality, Transport Office Procedure 3*. Confirm possibility to Time: 15 days Procedure 16*. Request a private connect and obtain technical conditions Cost: CZK 500 geodesist to survey the land after from the local water and sewerage construction company Procedure 8. Request and obtain the Agency: Authorized Geodesist Agency: Pražské vodovody a kanalizace, a.s. zoning permit Time: 30 days Time: 30 days Agency: Municipality, Building Office Cost: CZK 15,000 Cost: No cost Time: 60 days Cost: CZK 20,000 Procedure 17*. Request the occupancy Procedure 4*. Obtain project design permit clearance for the zoning permit from the Procedure 9. Obtain project design Agency: Municipality, Building Office Environmental Department clearance from the local water and Time: 1 day Agency: Municipality, Environmental sewerage company Cost: CZK 1,000 Department Agency: Vodárna Plzeň, a.s. Time: 30 days Time: 30 days Procedure 18. Receive the final Cost: No cost Cost: No cost inspection Agency: Municipality, Building Office Procedure 5*. Confirm possibility to Procedure 10*. Obtain project Time: 1 day connect and obtain technical conditions design clearance from the electricity Cost: No cost from the local electricity distribution distribution company company Agency: ČEZ Distribuce, a.s. Procedure 19. Receive the occupancy Agency: PREdistribuce, a.s. Time: 30 days permit Time: 20 days Cost: No cost Agency: Municipality, Building Office Cost: No cost Time: 12 days Procedure 11*. Obtain project design Cost: No cost Procedure 6*. Obtain project design clearance for the construction permit clearance for the zoning permit from the from the Public Health Office Procedure 20. Request and obtain the Transport Office Agency: Public Health Office evidence number for the building Agency: Municipality, Transport Office Time: 30 days Agency: Municipality, Building Office Time: 20 days Cost: No cost Time: 15 days Cost: CZK 500 Cost: No cost *Simultaneous with previous procedure 150 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 7*. Obtain project design Procedure 16*. Request a private Procedure 3*. Obtain project design clearance for the zoning permit from the geodesist to survey the land after clearance for the zoning permit from the Fire Department construction Public Health Office Agency: Fire Department Agency: Authorized Geodesist Agency: Public Health Office Time: 10 days Time: 30 days Time: 30 days Cost: No cost Cost: CZK 15,000 Cost: No cost Procedure 8. Request and obtain the Procedure 17*. Request the occupancy Procedure 4*. Obtain project design zoning permit permit clearance for the zoning permit from the Agency: Municipality, Building Office Agency: Municipality, Building Office Environmental Department Time: 60 days Time: 1 day Agency: Municipality, Environmental Cost: CZK 20,000 Cost: CZK 1,000 Department Time: 30 days Procedure 9. Obtain project design Procedure 18. Receive the final Cost: No cost clearance for the construction permit inspection from the Public Health Office Agency: Municipality, Building Office Procedure 5*. Obtain project design Agency: Public Health Office Time: 1 day clearance for the zoning permit from the Time: 30 days Cost: No cost Transport Office Cost: No cost Agency: Municipality, Transport and property Procedure 19. Receive the occupancy ownership office Procedure 10*. Obtain project design permit Time: 30 days clearance for the construction permit Cost: CZK 500 Agency: Municipality, Building Office from the Transport Office Time: 15 days Agency: Municipality, Transport Office Cost: No cost Procedure 6*. Obtain project design Time: 30 days clearance for the zoning permit from the Cost: No cost Procedure 20. Request and obtain the Fire Department evidence number for the building Agency: Fire Department Procedure 11*. Obtain project design Time: 21 days Agency: Municipality, Building Office clearance from the local water and Cost: No cost Time: 7 days sewerage company Cost: No cost Agency: Pražské vodovody a kanalizace, a.s. Procedure 7. Request and obtain the Time: 30 days Procedure 21. Register the building with zoning permit Cost: No cost the Cadaster Agency: Municipality, Building Office Time: 60 days Agency: Cadastral Office Procedure 12*. Obtain project design Cost: CZK 20,000 Time: 30 days clearance for the construction permit Cost: No cost from the Fire Department Procedure 8. Obtain project design Agency: Fire Department DEALING WITH CONSTRUCTION PERMITS clearance from the local water and Time: 20 days Usti nad Labem (Czech Republic) sewerage company Cost: No cost Agency: Severočeské vodovody a kanalizace, a.s. Warehouse value: CZK 21,036,007 (USD 878,500) Time: 30 days Data as of: February 15, 2018 Cost: No cost Procedure 13*. Obtain project design clearance from the electricity Procedure 1. Confirm possibility to Procedure 9*. Obtain project design distribution company connect and obtain technical conditions clearance from the electricity Agency: PREdistribuce, a.s. from the local water and sewerage distribution company Time: 20 days company Agency: ČEZ Distribuce, a.s. Cost: No cost Agency: Severočeské vodovody a kanalizace, a.s. Time: 30 days Time: 30 days Cost: No cost Procedure 14. Request and obtain the Cost: No cost construction permit Agency: Municipality, Building Office Procedure 10*. Obtain project design Procedure 2*. Confirm possibility to clearance for the construction permit Time: 37 days connect and obtain technical conditions from the Public Health Office Cost: CZK 10,000 from the local electricity distribution Agency: Public Health Office company Time: 30 days Procedure 15. Request and obtain water Agency: ČEZ Distribuce, a.s. and sewerage connection Cost: No cost Time: 30 days Agency: Pražské vodovody a kanalizace, a.s. Cost: No cost Time: 30 days Cost: CZK 5,500 *Simultaneous with previous procedure INDICATOR DETAILS - DEALING WITH CONSTRUCTION PERMITS 151 Procedure 11*. Obtain project design Procedure 20. Register the building with Procedure 8*. Submit application for a clearance for the construction permit the Cadaster water and sewerage connection at the from the Transport Office Agency: Cadastral Office Water and Sanitation Authority Agency: Municipality, Transport and property Time: 20 days Agency: Water and Sanitation Authority ownership office Cost: No cost Time: 1 day Time: 30 days Cost: No cost Cost: No cost DEALING WITH CONSTRUCTION PERMITS Procedure 9. Receive inspection by Procedure 12*. Obtain project design PORTUGAL Water and Sanitation Authority clearance for the construction permit Agency: Water and Sanitation Authority from the Fire Department Braga (Portugal) Time: 1 day Agency: Fire Department Cost: EUR 44 Warehouse value: EUR 877,206 (USD 992,500) Time: 23 days Data as of: February 15, 2018 Cost: No cost Procedure 10. Obtain water and Procedure 1. Obtain approval of project sewerage connection Procedure 13. Request and obtain the designs from Municipality and other Agency: Water and Sanitation Authority construction permit relevant entities Time: 30 days Agency: Municipality, Building Office Agency: Municipality Cost: EUR 3,715 Time: 45 days Time: 150 days Cost: CZK 10,000 Cost: EUR 114 EUR Procedure 11. Apply for occupancy permit Procedure 14. Request and obtain water Procedure 2. Obtain building permit and Agency: Municipality and sewerage connection pay fee Time: 1 day Agency: Severočeské vodovody a kanalizace, a.s. Agency: Municipality Cost: EUR 7 Time: 30 days Time: 30 days Cost: CZK 7,000 Cost: EUR 1,626 Procedure 12. Obtain occupancy permit Agency: Municipality Procedure 15*. Request a private Procedure 3. Inform the Municipality Time: 30 days geodesist to survey the land after about the beginning of construction Cost: EUR 1,165 construction Agency: Municipality Agency: Authorized Geodesist Time: 1 day Procedure 13. Register the building with Time: 20 days Cost: EUR 20 the Tax Authority Cost: CZK 15,000 Agency: Tax Authority Procedure 4*. Inform the Labor Time: 1 day Procedure 16*. Request the occupancy Conditions Agency about the new Cost: No cost permit construction site Agency: Municipality, Building Office Agency: Labor Conditions Agency Procedure 14. Register the building with Time: 1 day Time: 1 day the Real Estate Registry Cost: CZK 1,000 Cost: No cost Agency: Real Estate Registry Time: 10 days Procedure 17. Receive the final Procedure 5. Receive inspection from Cost: EUR 60 inspection the Labor Conditions Agency Agency: Municipality, Building Office DEALING WITH CONSTRUCTION PERMITS Agency: Labor Conditions Agency Time: 1 day Time: 1 day Coimbra (Portugal) Cost: No cost Cost: No cost Warehouse value: EUR 877,206 (USD 992,500) Data as of: February 15, 2018 Procedure 18. Receive the occupancy Procedure 6*. Receive inspection from permit Municipality Agency: Municipality, Building Office Procedure 1. Obtain approval of project Agency: Municipality designs from Municipality and other Time: 15 days Time: 1 day Cost: No cost relevant entities Cost: No cost Agency: Municipality Time: 180 days Procedure 19. Request and obtain the Procedure 7*. Receive inspection from Cost: EUR 105 evidence number for the building the Institute of Public Markets, Real Agency: Municipality, Office for city Estate and Construction development and investment Procedure 2. Obtain building permit and Agency: Institute of Public Procurement, Real pay fee Time: 7 days Estate and Construction (IMPIC) Cost: No cost Agency: Municipality Time: 1 day Time: 15 days Cost: No cost Cost: EUR 105 *Simultaneous with previous procedure 152 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 3. Inform the Municipality Procedure 12. Obtain occupancy permit Procedure 7*. Receive inspection from about the beginning of construction Agency: Municipality the Institute of Public Markets, Real Agency: Municipality Time: 21 days Estate and Construction Time: 1 day Cost: No cost Agency: Institute of Public Procurement, Real Cost: No cost Estate and Construction (IMPIC) Procedure 13. Register the building with Time: 1 day Procedure 4*. Inform the Labor the Tax Authority Cost: No cost Conditions Agency about the new Agency: Tax Authority construction site Time: 1 day Procedure 8*. Submit application for a Agency: Labor Conditions Agency Cost: No cost water and sewerage connection at the Time: 1 day Water and Sanitation Authority Cost: No cost Procedure 14. Register the building with Agency: Water and Sanitation Authority the Real Estate Registry Time: 1 day Procedure 5. Receive inspection from Agency: Real Estate Registry Cost: No cost the Labor Conditions Agency Time: 10 days Agency: Labor Conditions Agency Cost: EUR 60 Procedure 9. Receive inspection by Time: 1 day Water and Sanitation Authority Cost: No cost DEALING WITH CONSTRUCTION PERMITS Agency: Water and Sanitation Authority Evora (Portugal) Time: 1 day Procedure 6*. Receive inspection from Cost: EUR 30 Warehouse value: EUR 877,206 (USD 992,500) Municipality Data as of: February 15, 2018 Agency: Municipality Procedure 10. Obtain water and Time: 1 day sewerage connection Procedure 1. Obtain approval of project Agency: Water and Sanitation Authority Cost: No cost designs from Municipality and other Time: 15 days relevant entities Cost: EUR 850 Procedure 7*. Receive inspection from Agency: Municipality the Institute of Public Markets, Real Time: 75 days Estate and Construction Procedure 11. Apply for occupancy Cost: No cost Agency: Institute of Public Procurement, Real permit and pay fees Estate and Construction (IMPIC) Agency: Municipality Time: 1 day Procedure 2. Obtain building permit and Time: 1 day Cost: No cost pay fee Cost: EUR 823 Agency: Municipality Time: 30 days Procedure 8*. Submit application for a Procedure 12. Obtain occupancy permit Cost: EUR 1,762 water and sewerage connection at the Agency: Municipality Water and Sanitation Authority Time: 30 days Agency: Water and Sanitation Authority Procedure 3. Inform the Municipality Cost: No cost Time: 1 day about the beginning of construction Cost: No cost Agency: Municipality Procedure 13. Register the building with Time: 1 day the Tax Authority Cost: No cost Procedure 9. Receive inspection by Agency: Tax Authority Water and Sanitation Authority Time: 1 day Agency: Water and Sanitation Authority Procedure 4*. Inform the Labor Cost: No cost Time: 1 day Conditions Agency about the new Cost: EUR 65 construction site Procedure 14. Register the building with Agency: Labor Conditions Agency the Real Estate Registry Time: 1 day Procedure 10. Obtain water and Agency: Real Estate Registry Cost: No cost sewerage connection Time: 10 days Agency: Water and Sanitation Authority Cost: EUR 60 Time: 30 days Procedure 5. Receive inspection from Cost: EUR 7,845 the Labor Conditions Agency Agency: Labor Conditions Agency Time: 1 day Procedure 11. Apply for occupancy Cost: No cost permit and pay fees Agency: Municipality Time: 1 day Procedure 6*. Receive inspection from Cost: EUR 100 Municipality Agency: Municipality Time: 1 day Cost: No cost *Simultaneous with previous procedure INDICATOR DETAILS - DEALING WITH CONSTRUCTION PERMITS 153 DEALING WITH CONSTRUCTION PERMITS Procedure 9. Receive inspection by Procedure 4*. Inform the Labor Faro (Portugal) Water and Sanitation Authority Conditions Agency about the new Agency: Water and Sanitation Authority construction site Warehouse value: EUR 877,206 (USD 992,500) Time: 1 day Agency: Regional Directorate for Labor Data as of: February 15, 2018 Cost: EUR 161 Inspection Time: 1 day Procedure 1. Obtain approval of project Procedure 10. Obtain water and Cost: No cost designs from Municipality and other sewerage connection relevant entities Agency: Water and Sanitation Authority Procedure 5. Receive inspection from Agency: Municipality the Labor Conditions Agency Time: 15 days Time: 90 days Agency: Regional Directorate for Labor Cost: EUR 1,250 Cost: EUR 31 Inspection Procedure 11. Apply for occupancy Time: 1 day Procedure 2. Obtain building permit and permit and pay fees Cost: No cost pay fee Agency: Municipality Agency: Municipality Procedure 6*. Receive inspection from Time: 1 day Time: 30 days Municipality Cost: EUR 630 Cost: EUR 1,671 Agency: Municipality Procedure 12. Obtain occupancy permit Time: 1 day Procedure 3. Inform the Municipality Agency: Municipality Cost: No cost about the beginning of construction Time: 21 days Agency: Municipality Procedure 7*. Receive inspection from Cost: No cost Time: 1 day the Institute of Public Markets, Real Cost: No cost Estate and Construction Procedure 13. Register the building with the Tax Authority Agency: Institute of Public Procurement, Real Procedure 4*. Inform the Labor Agency: Tax Authority Estate and Construction (IMPIC) Conditions Agency about the new Time: 1 day Time: 1 day construction site Cost: No cost Cost: No cost Agency: Labor Conditions Agency Time: 1 day Procedure 8*. Submit application for a Procedure 14. Register the building with Cost: No cost water and sewerage connection at the the Real Estate Registry Water and Sanitation Authority Agency: Real Estate Registry Procedure 5. Receive inspection from Time: 5 days Agency: Water and Sanitation Authority the Labor Conditions Agency Cost: EUR 60 Time: 1 day Agency: Labor Conditions Agency Cost: No cost Time: 1 day DEALING WITH CONSTRUCTION PERMITS Cost: No cost Procedure 9. Receive inspection by Funchal (Portugal) Water and Sanitation Authority Procedure 6*. Receive inspection from Warehouse value: EUR 877,206 (USD 992,500) Agency: Water and Sanitation Authority Municipality Data as of: February 15, 2018 Time: 1 day Agency: Municipality Cost: No cost Time: 1 day Procedure 1. Obtain approval of project Cost: No cost designs from Municipality and other Procedure 10. Obtain water and relevant entities sewerage connection Procedure 7*. Receive inspection from Agency: Municipality Agency: Water and Sanitation Authority the Institute of Public Markets, Real Time: 90 days Time: 15 days Estate and Construction Cost: EUR 14 Cost: EUR 1,158 Agency: Institute of Public Procurement, Real Estate and Construction (IMPIC) Procedure 2. Obtain building permit and Procedure 11. Apply for occupancy Time: 1 day pay fee permit and pay fees Cost: No cost Agency: Municipality Agency: Municipality Time: 30 days Time: 1 day Procedure 8*. Submit application for a Cost: EUR 11,368 Cost: EUR 904 water and sewerage connection at the Water and Sanitation Authority Procedure 3. Inform the Municipality Procedure 12. Obtain occupancy permit Agency: Water and Sanitation Authority about the beginning of construction Agency: Municipality Time: 1 day Agency: Municipality Time: 10 days Cost: No cost Time: 1 day Cost: No cost Cost: No cost *Simultaneous with previous procedure 154 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 13. Register the building with Procedure 7*. Receive inspection from DEALING WITH CONSTRUCTION PERMITS the Tax Authority the Institute of Public Markets, Real Ponta Delgada (Portugal) Agency: Tax Authority Estate and Construction Time: 1 day Agency: Institute of Public Procurement, Real Warehouse value: EUR 877,206 (USD 992,500) Cost: No cost Estate and Construction (IMPIC) Data as of: February 15, 2018 Time: 1 day Procedure 14. Register the building with Cost: No cost Procedure 1. Obtain approval of project the Real Estate Registry designs from Municipality and other Procedure 8*. Submit application for a relevant entities Agency: Real Estate Registry water and sewerage connection at the Agency: Municipality Time: 5 days Water and Sanitation Authority Time: 90 days Cost: EUR 60 Agency: Water and Sanitation Authority Cost: EUR 31 DEALING WITH CONSTRUCTION PERMITS Time: 1 day Lisbon (Portugal) Cost: No cost Procedure 2. Obtain building permit and pay fee Warehouse value: EUR 877,206 (USD 992,500) Agency: Municipality Procedure 9. Receive inspection by Data as of: February 15, 2018 Time: 30 days Water and Sanitation Authority Agency: Water and Sanitation Authority Cost: EUR 1,705 Procedure 1. Obtain approval of project Time: 1 day designs from Municipality and other Cost: EUR 451 Procedure 3. Inform the Municipality relevant entities about the beginning of construction Agency: Municipality Agency: Municipality Procedure 10. Obtain water and Time: 75 days Time: 1 day sewerage connection Cost: EUR 379 Cost: No cost Agency: Water and Sanitation Authority Time: 31 days Procedure 2. Obtain building permit and Cost: EUR 7,571 Procedure 4*. Inform the Labor pay fee Conditions Agency about the new Agency: Municipality construction site Procedure 11. Apply for occupancy Time: 30 days Agency: Regional Inspectorate for Labor permit Cost: EUR 2,235 Time: 1 day Agency: Municipality Time: 1 day Cost: No cost Procedure 3. Inform the Municipality Cost: No cost about the beginning of construction Procedure 5. Receive inspection from Agency: Municipality the Labor Conditions Agency Procedure 12. Obtain occupancy permit Time: 1 day Agency: Regional Inspectorate for Labor Agency: Municipality Cost: No cost Time: 1 day Time: 10 days Cost: EUR 387 Cost: No cost Procedure 4*. Inform the Labor Conditions Agency about the new Procedure 6*. Receive inspection from Procedure 13. Register the building with construction site Municipality the Tax Authority Agency: Labor Conditions Agency Agency: Municipality Agency: Tax Authority Time: 1 day Time: 1 day Time: 1 day Cost: No cost Cost: No cost Cost: No cost Procedure 5. Receive inspection from Procedure 7*. Receive inspection from Procedure 14. Register the building with the Labor Conditions Agency the Institute of Public Markets, Real the Real Estate Registry Agency: Labor Conditions Agency Estate and Construction Agency: Real Estate Registry Time: 1 day Agency: Institute of Public Procurement, Real Time: 5 days Cost: No cost Estate and Construction (IMPIC) Cost: EUR 60 Time: 1 day Procedure 6*. Receive inspection from Cost: No cost Municipality Agency: Municipality Procedure 8*. Submit application for a Time: 1 day water and sewerage connection at the Cost: No cost Water and Sanitation Authority Agency: Water and Sanitation Authority Time: 1 day Cost: No cost *Simultaneous with previous procedure INDICATOR DETAILS - DEALING WITH CONSTRUCTION PERMITS 155 Procedure 9. Receive inspection by Procedure 4*. Inform the Labor Procedure 13. Register the building with Water and Sanitation Authority Conditions Agency about the new the Tax Authority Agency: Water and Sanitation Authority construction site Agency: Tax Authority Time: 1 day Agency: Labor Conditions Agency Time: 1 day Cost: No cost Time: 1 day Cost: No cost Cost: No cost Procedure 10. Obtain water and Procedure 14. Register the building with sewerage connection Procedure 5. Receive inspection from the Real Estate Registry Agency: Water and Sanitation Authority the Labor Conditions Agency Agency: Real Estate Registry Time: 15 days Agency: Labor Conditions Agency Time: 10 days Cost: EUR 950 Time: 1 day Cost: EUR 60 Cost: No cost Procedure 11. Apply for occupancy DEALING WITH CONSTRUCTION PERMITS permit and pay fees Procedure 6*. Receive inspection from Agency: Municipality Municipality SLOVAKIA Time: 1 day Agency: Municipality Cost: EUR 367 Time: 1 day Bratislava (Slovakia) Cost: No cost Warehouse value: EUR 728,246 (USD 840,500) Procedure 12. Obtain occupancy permit Data as of: February 15, 2018 Agency: Municipality Procedure 7*. Receive inspection from Time: 15 days the Institute of Public Markets, Real Procedure 1. Obtain clearance for the Cost: No cost Estate and Construction investment project Agency: Institute of Public Procurement, Real Agency: Municipality Procedure 13. Register the building with Estate and Construction (IMPIC) Time: 30 days the Tax Authority Time: 1 day Cost: No cost Agency: Tax Authority Cost: No cost Time: 1 day Procedure 2*. Obtain environmental Cost: No cost Procedure 8*. Submit application for a clearance water and sewerage connection at the Agency: District Office, Environmental Procedure 14. Register the building with Water and Sanitation Authority Department the Real Estate Registry Agency: Water and Sanitation Authority Time: 30 days Agency: Real Estate Registry Time: 1 day Cost: No cost Time: 10 days Cost: No cost Cost: EUR 60 Procedure 3*. Obtain fire safety Procedure 9. Receive inspection by clearance DEALING WITH CONSTRUCTION PERMITS Water and Sanitation Authority Agency: Fire Department Porto (Portugal) Agency: Water and Sanitation Authority Time: 30 days Time: 1 day Cost: No cost Warehouse value: EUR 877,206 (USD 992,500) Cost: EUR 16 Data as of: February 15, 2018 Procedure 4*. Obtain health and Procedure 10. Obtain water and sanitation clearance Procedure 1. Obtain approval of project sewerage connection designs from Municipality and other Agency: Regional Public Health Office Agency: Water and Sanitation Authority Time: 30 days relevant entities Time: 30 days Cost: EUR 50 Agency: Municipality Cost: EUR 1,014 Time: 100 days Cost: No cost Procedure 5*. Obtain consent from Procedure 11. Apply for occupancy water company and request technical permit conditions Procedure 2*. Obtain building permit Agency: Municipality and pay fee Agency: Bratislavská vodárenská spoločnosť, a.s. Time: 1 day Time: 26 days Agency: Municipality Cost: No cost Cost: EUR 18 Time: 45 days Cost: EUR 3,219 Procedure 12. Obtain occupancy permit Procedure 6*. Obtain certificate of Agency: Municipality ownership of the land and the cadastral Procedure 3. Inform the Municipality Time: 10 days about the beginning of construction map Cost: EUR 648 Agency: District Office, Cadastral Department Agency: Municipality Time: 1 day Time: 1 day Cost: EUR 16 Cost: No cost *Simultaneous with previous procedure 156 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 7. Request and obtain Procedure 2*. Obtain environmental Procedure 11*. Request occupancy location permit clearance permit Agency: Municipality, Building Office Agency: District Office, Environmental Agency: Municipality, Building Office Time: 90 days Department Time: 1 day Cost: EUR 100 Time: 30 days Cost: EUR 400 Cost: No cost Procedure 8. Request and obtain Procedure 12. Receive final inspection construction permit Procedure 3*. Obtain fire safety Agency: Municipality, Building Office Agency: Municipality, Building Office clearance Time: 1 day Time: 80 days Agency: Fire Department Cost: No cost Cost: EUR 600 Time: 30 days Cost: No cost Procedure 13. Obtain occupancy permit Procedure 9*. Receive on-site inspection Agency: Municipality, Building Office before construction Procedure 4*. Obtain health and Time: 30 days Agency: Municipality, Building Office sanitation clearance Cost: No cost Time: 1 day Agency: Regional Public Health Office Cost: No cost Time: 30 days Procedure 14. Register the building with Cost: EUR 50 the Cadaster Procedure 10. Obtain water and Agency: District Office, Cadastral Department sewerage connection Procedure 5*. Obtain consent from Time: 55 days Agency: Bratislavská vodárenská spoločnosť, a.s. water company and request technical Cost: No cost Time: 7 days conditions Cost: EUR 332 Agency: Východoslovenská vodárenská DEALING WITH CONSTRUCTION PERMITS spoločnosť, a.s. Presov (Slovakia) Procedure 11*. Request occupancy Time: 30 days Cost: EUR 21 Warehouse value: EUR 728,246 (USD 840,500) permit Data as of: February 15, 2018 Agency: Municipality, Building Office Time: 1 day Procedure 6*. Obtain certificate of ownership of the land and the cadastral Procedure 1. Obtain clearance for the Cost: EUR 400 map investment project Agency: District Office, Cadastral Department Agency: Municipality Procedure 12. Receive final inspection Time: 30 days Time: 1 day Agency: Municipality, Building Office Cost: EUR 16 Cost: No cost Time: 1 day Cost: No cost Procedure 7. Request and obtain Procedure 2*. Obtain environmental location permit clearance Procedure 13. Obtain occupancy permit Agency: District Office, Environmental Agency: Municipality, Building Office Agency: Municipality, Building Office Department Time: 75 days Time: 29 days Time: 30 days Cost: EUR 100 Cost: No cost Cost: No cost Procedure 14. Register the building with Procedure 8. Request and obtain construction permit Procedure 3*. Obtain fire safety the Cadaster clearance Agency: Municipality, Building Office Agency: District Office, Cadastral Department Agency: Fire Department Time: 60 days Time: 60 days Time: 30 days Cost: EUR 600 Cost: No cost Cost: No cost DEALING WITH CONSTRUCTION PERMITS Procedure 9*. Receive on-site inspection before construction Procedure 4*. Obtain health and Kosice (Slovakia) sanitation clearance Agency: Municipality, Building Office Warehouse value: EUR 728,246 (USD 840,500) Time: 1 day Agency: Regional Public Health Office Data as of: February 15, 2018 Cost: No cost Time: 30 days Cost: EUR 50 Procedure 1. Obtain clearance for the Procedure 10. Obtain water and investment project sewerage connection Procedure 5*. Obtain consent from Agency: Municipality Agency: Východoslovenská vodárenská water company and request technical Time: 45 days spoločnosť, a.s. conditions Cost: No cost Time: 14 days Agency: Východoslovenská vodárenská Cost: EUR 500 spoločnosť, a.s. Time: 30 days Cost: EUR 21 *Simultaneous with previous procedure INDICATOR DETAILS - DEALING WITH CONSTRUCTION PERMITS 157 Procedure 6*. Obtain certificate of DEALING WITH CONSTRUCTION PERMITS Procedure 9. Request and obtain ownership of the land and the cadastral Trnava (Slovakia) construction permit map Agency: Municipality, Building Office Agency: District Office, Cadastral Department Warehouse value: EUR 728,246 (USD 840,500) Time: 60 days Time: 1 day Data as of: February 15, 2018 Cost: EUR 600 Cost: EUR 16: Procedure 1. Informational meeting at Procedure 10*. Receive on-site Procedure 7. Request and obtain the Building Office inspection before construction location permit Agency: Municipality, Building Office Agency: Municipality, Building Office Time: 1 day Agency: Municipality, Building Office Time: 1 day Cost: No cost Time: 60 days Cost: No cost Cost: EUR 100 Procedure 2. Obtain clearance for the Procedure 11. Obtain water and Procedure 8. Request and obtain investment project sewerage connection construction permit Agency: Municipality Agency: Trnavská vodárenská spoločnosť, a.s. Time: 30 days Agency: Municipality, Building Office Time: 9 days Cost: No cost Time: 60 days Cost: EUR 115 Cost: EUR 600 Procedure 3*. Obtain environmental Procedure 12*. Request occupancy Procedure 9*. Receive on-site inspection clearance permit before construction Agency: District Office, Environmental Agency: Municipality, Building Office Department Agency: Municipality, Building Office Time: 1 day Time: 30 days Time: 1 day Cost: EUR 400 Cost: No cost Cost: No cost Procedure 13. Receive final inspection Procedure 4*. Obtain fire safety Procedure 10. Obtain water and Agency: Municipality, Building Office clearance sewerage connection Time: 1 day Agency: Fire Department Agency: Východoslovenská vodárenská Cost: No cost Time: 30 days spoločnosť, a.s. Cost: No cost Time: 7 days Procedure 14. Obtain occupancy permit Cost: EUR 500 Agency: Municipality, Building Office Procedure 5*. Obtain health and Time: 28 days Procedure 11*. Request occupancy sanitation clearance Cost: No cost permit Agency: Regional Public Health Office Time: 30 days Agency: Municipality, Building Office Procedure 15. Register the building with Cost: EUR 50 Time: 1 day the Cadaster Cost: EUR 400 Agency: District Office, Cadastral Department Procedure 6*. Obtain consent from Time: 50 days Procedure 12. Receive final inspection water company and request technical Cost: No cost Agency: Municipality, Building Office conditions Agency: Trnavská vodárenská spoločnosť, a.s. DEALING WITH CONSTRUCTION PERMITS Time: 1 day Time: 30 days Cost: No cost Zilina (Slovakia) Cost: EUR 26 Warehouse value: EUR 728,246 (USD 840,500) Procedure 13. Obtain occupancy permit Agency: Municipality, Building Office Procedure 7*. Obtain certificate of Data as of: February 15, 2018 Time: 28 days ownership of the land and the cadastral Cost: No cost map Procedure 1. Obtain clearance for the Agency: District Office, Cadastral Department investment project Time: 1 day Agency: Municipality Procedure 14. Register the building with Cost: EUR 16 Time: 30 days the Cadaster Cost: No cost Agency: District Office, Cadastral Department Time: 60 days Procedure 8. Request and obtain Cost: No cost location permit Procedure 2*. Obtain environmental Agency: Municipality, Building Office clearance Time: 75 days Agency: District Office, Environmental Cost: EUR 100 Department Time: 30 days Cost: No cost *Simultaneous with previous procedure 158 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 3*. Obtain fire safety Procedure 12. Receive final inspection clearance Agency: Municipality, Building Office Agency: Fire Department Time: 1 day Time: 30 days Cost: No cost Cost: No cost Procedure 13. Obtain occupancy permit Procedure 4*. Obtain health and Agency: Municipality, Building Office sanitation clearance Time: 30 days Agency: Regional Public Health Office Cost: No cost Time: 30 days Cost: EUR 50 Procedure 14. Register the building with the Cadaster Procedure 5*. Obtain consent from Agency: District Office, Cadastral Department water company and request technical Time: 60 days conditions Cost: No cost Agency: Severoslovenské vodárne a kanalizácie, a.s. Time: 30 days Cost: EUR 18 Procedure 6*. Obtain certificate of ownership of the land and the cadastral map Agency: District Office, Cadastral Department Time: 1 day Cost: EUR 16 Procedure 7. Request and obtain location permit Agency: Municipality, Building Office Time: 90 days Cost: EUR 100 Procedure 8. Request and obtain construction permit Agency: Municipality, Building Office Time: 75 days Cost: EUR 600 Procedure 9*. Receive on-site inspection before construction Agency: Municipality, Building Office Time: 1 day Cost: No cost Procedure 10. Obtain water and sewerage connection Agency: Severoslovenské vodárne a kanalizácie, a.s. Time: 30 days Cost: EUR 301 Procedure 11*. Request occupancy permit Agency: Municipality, Building Office Time: 1 day Cost: EUR 400 *Simultaneous with previous procedure DEALING WITH CONSTRUCTION PERMITS – BUILDING QUALITY CONTROL INDEX CROATIA CZECH REPUBLIC PORTUGAL SLOVAKIA Answer Score Answer Score Answer Score Score Building quality control index (0–15) 12 8 11 8 Quality of building regulations index (0–2) 2 2 2 2 In what way are the building regulations (including Available online; Free of charge. 1 Available online; Free of charge. 1 Available online; Free of charge. 1 Available online; Free of charge. 1 the building code) or any regulations dealing with construction permits made available? (0–1) Which requirements for obtaining a building permit List of required documents; Fees to be 1 List of required documents; Fees 1 List of required documents; Fees 1 List of required documents; Fees 1 are clearly specified by the building regulations or by paid; Required preapprovals. to be paid; Required preapprovals. to be paid; Required preapprovals. to be paid; Required preapprovals. any accessible website, brochure or pamphlet? (0–1) Quality control before construction index (0–1) 0 0 1 0 Who is part of the committee or team that reviews Civil servant. 0 Civil servant. 0 Licensed architect; Licensed 1 Civil servant. 0 and approves building permit applications in the engineer. relevant permit-issuing agency? (0–1) Quality control during construction index (0–3) 2 2 2 2 What types of inspections (if any) are required by Inspections by external engineer or 1 Inspections by in-house engineer. 1 Inspections by in-house engineer; 1 Inspections by in-house engineer. 1 law to be carried out during construction? (0–2) firm; Unscheduled inspections. Unscheduled inspections. Do legally mandated inspections occur in practice Mandatory inspections are always 1 Mandatory inspections are always 1 Mandatory inspections are always 1 Mandatory inspections are always 1 during construction? (0–1) done in practice. done in practice. done in practice. done in practice. Quality control after construction index (0–3) 3 3 3 3 Is there a final inspection required by law to verify Yes, final inspection is done by 2 Yes, final inspection is done by 2 Yes, in-house supervising engineer 2 Yes, final inspection is done by 2 that the building was built in accordance with the government agency; Yes, external government agency; Yes, in-house submits report for final inspection. government agency; Yes, in-house approved plans and regulations? (0–2) engineer submits report for final engineer submits report for final engineer submits report for final inspection. inspection. inspection. Do legally mandated final inspections occur in Final inspection always occurs in 1 Final inspection always occurs in 1 Final inspection always occurs in 1 Final inspection always occurs in 1 practice? (0–1) practice. practice. practice. practice. Liability and insurance regimes index (0–2) 1 1 1 1 Which parties (if any) are held liable by law for Architect or engineer; Professional in 1 Architect or engineer; Professional 1 Architect or engineer; Professional 1 Architect or engineer; Professional 1 structural flaws or problems in the building once it charge of the supervision; Construction in charge of the supervision; in charge of the supervision; in charge of the supervision; is in use? (0–1) company. Construction company. Construction company. Construction company. Which parties (if any) are required by law to obtain No party is required by law to 0 No party is required by law to 0 No party is required by law to 0 No party is required by law to 0 an insurance policy to cover possible structural flaws obtain insurance. obtain insurance . obtain insurance . obtain insurance . or problems in the building once it is in use? (0–1) Professional certifications index (0–4) 4 0 2 0 What are the qualification requirements for the Minimum number of years of 2 Minimum number of years of 0 University degree in architecture 1 Minimum number of years of 0 professional responsible for verifying that the experience; University degree in experience; Passing a certification or engineering; Being a registered experience; Passing a certification architectural plans or drawings are in compliance architecture or engineering; Being a exam. architect or engineer. exam. with existing building regulations? (0–2) registered architect or engineer. What are the qualification requirements for the Minimum number of years of experi- 2 Minimum number of years of 0 University degree in engineering, 1 Minimum number of years of 0 professional who supervises the construction on ence; University degree in engineering, experience; Passing a certification construction or construction experience; Passing a certification the ground? (0–2) construction or construction manage- exam. management; Being a registered exam. ment; Being a registered architect or architect or engineer. engineer; Passing a certification exam. INDICATOR DETAILS - DEALING WITH CONSTRUCTION PERMITS Source: Doing Business database. 159 160 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 3: Submit internal wiring Procedure 2: Accept estimate and await certificate to utility and request final completion of external works by utility LIST OF PROCEDURES connection Agency: HEP ODS Elektra Varazdin GETTING ELECTRICITY Agency: HEP ODS Elektroprimorje Rijeka Time: 30 days Time: 14 days Cost: HRK 189,184 [HRK 1,350 per kVA for the CROATIA connection fees (1,350*140=HRK 189,000) + Cost: None Osijek (Croatia) HRK 184 administrative fees] Name of Utility: HEP ODS Elektroslavonija Osijek Procedure 4: Receive visit by utility to open the meter Procedure 3: Submit internal wiring Data as of: February 15, 2018 Agency: HEP ODS Elektroprimorje Rijeka certificate to utility and request final Time: 1 day connection Procedure 1: Submit application Agency: HEP ODS Elektra Varazdin Cost: None and receive preliminary connection Time: 9 days approval and contract GETTING ELECTRICITY Cost: None Agency: HEP ODS - Elektroslavonija Osijek Time: 15 days Split (Croatia) Procedure 4: Receive visit by utility to Cost: None Name of Utility: HEP ODS Elektrodalmacija Split open the meter Data as of: February 15, 2018 Agency: HEP ODS Elektra Varazdin Procedure 2: Accept estimate and await Time: 1 day completion of external works by utility Procedure 1: Submit application Cost: None Agency: HEP ODS - Elektroslavonija Osijek and receive preliminary connection Time: 30 days approval and contract GETTING ELECTRICITY Cost: HRK 189,184 [HRK 1,350 per kVA for the Agency: HEP ODS - Elektrodalmacija Split connection fees (1,350*140=HRK 189,000) + Zagreb (Croatia) Time: 30 days HRK 184 administrative fees] Cost: None Name of Utility: HEP Distribution System Operator Data as of: February 15, 2018 Procedure 3: Submit internal wiring Procedure 2: Accept estimate and await certificate to utility and request final completion of external works by utility Procedure 1: Submit application connection Agency: HEP ODS - Elektrodalmacija Split and receive preliminary connection Agency: HEP ODS - Elektroslavonija Osijek Time: 30 days approval and contract Time: 9 days Cost: HRK 189,184 [HRK 1,350 per kVA for the Agency: HEP Distribution System Operator Cost: None connection fees (1,350*140=HRK 189,000) + Time: 25 days HRK 184 administrative fees] Cost: None Procedure 4: Receive visit by utility to open the meter Procedure 3: Submit internal wiring Procedure 2: Accept estimate and await Agency: HEP ODS - Elektroslavonija Osijek certificate to utility and request final completion of external works by utility Time: 1 day connection Agency: HEP Distribution System Operator Cost: None Agency: HEP ODS - Elektrodalmacija Split Time: 30 days Time: 14 days Cost: HRK 238,184 [HRK 1,700 per kVA for the GETTING ELECTRICITY Cost: None connection fees (1,700*140=HRK 238,000) Rijeka (Croatia) +HRK 184 administrative fees] Name of Utility: HEP ODS Elektroprimorje Rijeka Procedure 4: Receive visit by utility to open the meter Procedure 3: Submit internal wiring Data as of: February 15, 2018 Agency: HEP ODS - Elektrodalmacija Split certificate to utility and request final Time: 1 day connection Procedure 1: Submit application Agency: HEP Distribution System Operator Cost: None and receive preliminary connection Time: 9 days approval and contract Cost: None GETTING ELECTRICITY Agency: HEP ODS Elektroprimorje Rijeka Time: 28 days Varazdin (Croatia) Procedure 4: Receive visit by utility to Cost: None Name of Utility: HEP ODS Elektra Varazdin open the meter Data as of: February 15, 2018 Agency: HEP Distribution System Operator Procedure 2: Accept estimate and await Time: 1 day completion of external works by utility Procedure 1: Submit application Cost: None Agency: HEP ODS Elektroprimorje Rijeka and receive preliminary connection Time: 30 days approval and contract Cost: HRK 189,184 [HRK 1,350 per kVA for the Agency: HEP ODS Elektra Varazdin connection fees (1,350*140=HRK 189,000) + Time: 20 days HRK 184 administrative fees] Cost: None INDICATOR DETAILS - GETTING ELECTRICITY 161 GETTING ELECTRICITY Procedure 5. Sign supply contract and GETTING ELECTRICITY await meter installation Ostrava (Czech Republic) CZECH REPUBLIC Agency: Electricity supplier and CEZ Distribuce, a.s. Time: 5 days Name of Utility: ČEZ Distribuce, a.s. Brno (Czech Republic) Data as of: February 15, 2018 Cost: None Name of Utility: E.ON Distribuce, a.s. Data as of: February 15, 2018 GETTING ELECTRICITY Procedure 1. Apply for connection, receive preliminary contract, and pay Olomouc (Czech Republic) Procedure 1. Apply for connection, connection fee receive connection agreement, and pay Name of Utility: ČEZ Distribuce, a.s. Agency: CEZ Distribuce, a.s. connection fee Data as of: February 15, 2018 Time: 17 days Agency: E.ON Distribuce, a.s.   Cost: CZK 112,000 [CZK 800 per kVA for the Time: 15 days Procedure 1. Apply for connection, connection fees (800*140= CZK 112,000)] Cost: CZK 100,000 [CZK 500 per ampere for receive preliminary contract, and pay the connection fees (500*200= CZK 100,000)] connection fee Procedure 2. Await completion of Agency: CEZ Distribuce, a.s. external works by CEZ Distribuce Procedure 2. Await completion of Time: 14 days Agency: CEZ Distribuce, a.s. external works by E.ON Distribuce Cost: CZK 112,000 [CZK 800 per kVA for the Time: 150 days Agency: E.ON Distribuce, a.s. connection fees (800*140= CZK 112,000)] Cost: None Time: 90 days Cost: CZK 9,000 [The cost of creating project Procedure 2. Await completion of Procedure 3*. Await approval of project design for the external connection before external works by CEZ Distribuce design by CEZ Distribuce handing it over to E.ON] Agency: CEZ Distribuce, a.s. Agency: CEZ Distribuce, a.s. Time: 150 days Time: 14 days Procedure 3. Sign supply contract and Cost: None Cost: None await meter installation Agency: Electricity supplier and E.ON Servisni, s.r.o Procedure 3*. Await approval of project Procedure 4*. Obtain excavation permit Time: 5 days design by CEZ Distribuce for connection works Cost: None Agency: CEZ Distribuce, a.s. Agency: Municipality, Transport Office Time: 14 days Time: 12 days GETTING ELECTRICITY Cost: None Cost: CZK 4,600 [CZK 100 for the excavation permit fee + CZK 10 per square meter per day Liberec (Czech Republic) for the tax for using public land (10* 150sq.m.*3 Name of Utility: ČEZ Distribuce, a.s. Procedure 4*. Obtain excavation permit days=CZK 4,500)] Data as of: February 15, 2018 for connection works Agency: Municipality, Building office, Transport Procedure 5*. Build external connection Office Procedure 1. Apply for connection, and install private substation Time: 18 days receive preliminary contract, and pay Agency: Private electrical contractor Cost: CZK 1,450 [CZK 1,000 for the excavation connection fee permit fee + CZK 1 per square meter per day Time: 14 days Agency: CEZ Distribuce, a.s. Cost: CZK 1,075,000 [CZK 700,000 for for the tax for using public land (150sq.m.*3 Time: 12 days the substation + CZK 2,500 per meter for days=CZK 450)] Cost: CZK 112,000 [CZK 800 per kVA for the excavating and building the external connection connection fees (800*140= CZK 112,000)] (2,500*150 = CZK 375,000)] Procedure 5*. Build external connection and install private substation Procedure 6. Sign supply contract and Procedure 2. Await completion of Agency: Private electrical contractor external works by CEZ Distribuce await meter installation Time: 14 days Agency: Electricity supplier and CEZ Distribuce, a.s. Agency: CEZ Distribuce, a.s. Cost: CZK 1,075,000 [CZK 700,000 for Time: 5 days Time: 200 days the substation + CZK 2,500 per meter for Cost: None Cost: None excavating and building the external connection (2,500*150 = CZK 375,000)] GETTING ELECTRICITY Procedure 3*. Await approval of project Plzen (Czech Republic) design by CEZ Distribuce Procedure 6. Sign supply contract and Agency: CEZ Distribuce, a.s. await meter installation Name of Utility: ČEZ Distribuce, a.s. Time: 14 days Agency: Electricity supplier and CEZ Distribuce, a.s. Data as of: February 15, 2018 Cost: None Time: 5 days Cost: None Procedure 1. Apply for connection, Procedure 4*. Install private substation receive preliminary contract, and pay Agency: Private electrical contractor connection fee Time: 7 days Agency: CEZ Distribuce, a.s. Cost: CZK 700,000 Time: 19 days Cost: CZK 112,000 [CZK 800 per kVA for the connection fees (800*140= CZK 112,000)] *Simultaneous with previous procedure 162 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Procedure 2. Await completion of GETTING ELECTRICITY Procedure 2*. Receive a site visit external works by CEZ Distribuce Usti nad Labem (Czech Republic) by EDP for preparation of the cost Agency: CEZ Distribuce, a.s. estimate Time: 150 days Name of Utility: ČEZ Distribuce, a.s. Agency: EDP Distribuição Cost: None Data as of: February 15, 2018 Time: 1 day Cost: None Procedure 3*. Await approval of project Procedure 1. Apply for connection, design by CEZ Distribuce receive preliminary contract, and pay Procedure 3. Obtain an excavation Agency: CEZ Distribuce, a.s. connection fee permit from the Municipal Chamber of Time: 14 days Agency: CEZ Distribuce, a.s. Braga Cost: None Time: 28 days Agency: Municipal Chamber of Braga Cost: CZK 112,000 [CZK 800 per kVA for the Time: 24 days Procedure 4*. Obtain excavation permit connection fees (800*140= CZK 112,000)] Cost: EUR 468 [Fees for a permit for works on for connection works a public road: EUR 97 for issuing a license for Agency: Municipality, Transport Office Procedure 2. Await completion of works + EUR 14 for authorizing works during one Time: 14 days external works by CEZ Distribuce month on a public road + EUR 2 per meter for Cost: CZK 2,800 [CZK 100 for the excavation Agency: CEZ Distribuce, a.s. occupying a public space for a month, per the permit fee + CZK 6 per square meter per day Time: 200 days Municipal Fee Schedule for 2018] for the tax for using public land (6* 150sq.m.*3 Cost: None days=CZK 2,700)] Procedure 4. The client's electrical Procedure 3*. Await approval of project contractor carries out the external Procedure 5*. Build external connection design by CEZ Distribuce connection works and install private substation Agency: CEZ Distribuce, a.s. Agency: Private electrical contractor Agency: Private electrical contractor Time: 20 days Time: 19 days Time: 14 days Cost: None Cost: None Cost: CZK 1,075,000 [CZK 700,000 for the substation + CZK 2,500 per meter for Procedure 4*. Install private substation Procedure 5*. Receive internal excavating and building the external connection Agency: Private electrical contractor inspection and certificate from (2,500*150 = CZK 375,000)] Time: 7 days certifying entity Procedure 6. Sign supply contract and Cost: CZK 700,000 Agency: Private inspection entity await meter installation Time: 15 days Procedure 5. Sign supply contract and Cost: EUR 99 [Lowest cost for the certification Agency: Electricity supplier and CEZ Distribuce, a.s. of a 140-kVA installation. Costs are charged by Time: 5 days await meter installation inspection entities based on market prices] Cost: None Agency: Electricity supplier and CEZ Distribuce, a.s. Time: 5 days GETTING ELECTRICITY Cost: None Procedure 6. Sign supply contract Prague (Czech Republic) and receive meter installation by the electricity retailer Name of Utility: PREdistribuce, a.s. GETTING ELECTRICITY Agency: Electricity retailer Data as of: February 15, 2018 Time: 4 days PORTUGAL Cost: None Procedure 1. Apply for connection, receive preliminary contract, and pay Braga (Portugal) GETTING ELECTRICITY connection fee Name of Utility: EDP Coimbra (Portugal) Agency: PREdistribuce, a.s. Data as of: February 15, 2018 Time: 17 days Name of Utility: EDP Cost: CZK 100,000 [CZK 500 per ampere for Data as of: February 15, 2018 Procedure 1. Submit an application for the connection fees (500*200= CZK 100,000)] a new connection to EDP and await estimate Procedure 1. Submit an application for Procedure 2. Await completion of Agency: EDP Distribuição a new connection to EDP and await external works by PREdistribuce Time: 18 days estimate Agency: PREdistribuce, a.s. Cost: EUR 6,236 [Fees set by the regulator: EUR Agency: EDP Distribuição Time: 38 days 37 for the connection services fee + EUR 11 per Time: 15 days Cost: CZK 9,000 [The cost of creating project kVA for capacity charges. If works are carried out Cost: EUR 6,236 [Fees set by the regulator: EUR design for the external connection before by the utility, an additional cost for the external 37 for the connection services fee + EUR 11 per handing it over to PREdistribuce] works is charged, at EUR 29 per meter for shared kVA for capacity charges. If works are carried out networks plus EUR 1,243 for exclusive use of by the utility, an additional cost for the external Procedure 3. Sign supply contract and networks] works is charged, at EUR 29 per meter for shared networks plus EUR 1,243 for exclusive use of await meter installation networks] Agency: Electricity supplier and PREmereni, a.s. Time: 5 days Cost: None *Simultaneous with previous procedure INDICATOR DETAILS - GETTING ELECTRICITY 163 Procedure 2. Receive external works Cost: EUR 99 [Lowest cost for the certification Procedure 6. Sign supply contract from EDP of a 140-kVA installation. Costs are charged by and receive meter installation by the Agency: EDP Distribuição inspection entities based on market prices] electricity retailer Time: 45 days Agency: Electricity retailer Cost: None Procedure 5. Sign supply contract Time: 6 days and receive meter installation by the Cost: None Procedure 3*. Receive internal electricity retailer inspection and certificate from Agency: Electricity retailer GETTING ELECTRICITY certifying entity Time: 5 days Funchal (Portugal) Agency: Private inspection entity Cost: None Name of Utility: EEM Time: 18 days GETTING ELECTRICITY Data as of: February 15, 2018 Cost: EUR 99 [Lowest cost for the certification of a 140-kVA installation. Costs are charged by Faro (Portugal) inspection entities based on market prices] Procedure 1. Submit an application for Name of Utility: EDP a new connection to EEM and await Data as of: February 15, 2018 estimate Procedure 4. Sign supply contract and receive meter installation by the Agency: Empresa de Eletricidade da Madeira Procedure 1. Submit an application for (EEM) electricity retailer a new connection to EDP and await Time: 13 days Agency: Electricity retailer estimate Cost: EUR 5,862 [Fees set by the regulator: EUR Time: 5 days Agency: EDP Distribuição 37 for the connection services fee + EUR 11 per Cost: None Time: 23 days kVA for capacity charges. If works are carried out Cost: EUR 6,236 [Fees set by the regulator: EUR by the utility, an additional cost for the external GETTING ELECTRICITY 37 for the connection services fee + EUR 11 per works is charged, at EUR 29 per meter] Evora (Portugal) kVA for capacity charges. If works are carried out by the utility, an additional cost for the external Procedure 2. Obtain an excavation Name of Utility: EDP works is charged, at EUR 29 per meter for shared permit from the Municipal Chamber of Data as of: February 15, 2018 networks plus EUR 1,243 for exclusive use of Funchal networks] Procedure 1. Submit an application for Agency: Municipal Chamber of Funchal a new connection to EDP and await Time: 15 days Procedure 2*. Receive a site visit Cost: EUR 132 [Fee of EUR 13 per meter to estimate by EDP for preparation of the cost obtain a permit for works on a public road, per Agency: EDP Distribuição estimate art. 25-16 of the Municipal Fee Schedule] Time: 19 days Agency: EDP Distribuição Cost: EUR 6,236 [Fees set by the regulator: EUR Time: 1 day 37 for the connection services fee + EUR 11 per Procedure 3. The client's electrical Cost: None contractor carries out the external kVA for capacity charges. If works are carried out by the utility, an additional cost for the external connection works works is charged, at EUR 29 per meter for shared Procedure 3. Obtain an excavation Agency: Private electrical contractor networks plus EUR 1,243 for exclusive use of permit from the Municipal Chamber of Time: 19 days networks] Faro Cost: None Agency: Municipal Chamber of Faro Procedure 2*. Receive a site visit Time: 20 days Procedure 4*. Notify the Regional by EDP for preparation of the cost Cost: None Directorate for the Economy and estimate Transports (DRET) of the completion of Agency: EDP Distribuição Procedure 4. The client's electrical the internal electrical installation Time: 1 day contractor carries out the external Agency: Regional Directorate for the Economy Cost: None connection works and Transports (DRET) Agency: Private electrical contractor Time: 5 days Procedure 3. The client's electrical Time: 19 days Cost: None contractor carries out the external Cost: None connection works Procedure 5. Conclude supply contract Agency: Private electrical contractor Procedure 5*. Receive internal and receive meter installation by EEM Time: 33 days inspection and certificate from Agency: Empresa de Eletricidade da Madeira Cost: None certifying entity (EEM) Agency: Private inspection entity Time: 3 days Procedure 4*. Receive internal Time: 15 days Cost: None inspection and certificate from Cost: EUR 99 [Lowest cost for the certification certifying entity of a 140-kVA installation. Costs are charged by Agency: Private inspection entity inspection entities based on market prices] Time: 18 days *Simultaneous with previous procedure 164 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA GETTING ELECTRICITY kVA for capacity charges. If works are carried out Procedure 4. The client's electrical by the utility, an additional cost for the external contractor carries out the external Lisbon (Portugal) works is charged, at EUR 29 per meter for shared connection works Name of Utility: EDP networks plus EUR 1,778.36 for exclusive use of Agency: Private electrical contractor Data as of: February 15, 2018 networks] Time: 19 days Cost: None Procedure 1. Submit an application for Procedure 2*. Receive a site visit a new connection to EDP and await by EDA for preparation of the cost Procedure 5*. Receive internal estimate estimate inspection and certificate from Agency: EDP Distribuição Agency: Electricidade dos Açores (EDA) certifying entity Time: 18 days Time: 1 day Agency: Private inspection entity Cost: EUR 6,236 [Fees set by the regulator: EUR Cost: None Time: 14 days 37 for the connection services fee + EUR 11 per Cost: EUR 99 [Lowest cost for the certification kVA for capacity charges. If works are carried out Procedure 3. Receive external works of a 140-kVA installation. Costs are charged by by the utility, an additional cost for the external from EDA inspection entities based on market prices] works is charged, at EUR 29 per meter for shared Agency: Electricidade dos Açores (EDA) networks plus EUR 1,243 for exclusive use of networks] Time: 45 days Procedure 6. Sign supply contract Cost: None and receive meter installation by the Procedure 2*. Receive a site visit electricity retailer Procedure 4. Conclude supply contract Agency: Electricity retailer by EDP for preparation of the cost and receive meter activation by EDA Time: 7 days estimate Agency: Electricidade dos Açores (EDA) Cost: None Agency: EDP Distribuição Time: 2 days Time: 1 day Cost: None Cost: None GETTING ELECTRICITY GETTING ELECTRICITY Procedure 3. Receive external works Porto (Portugal) SLOVAKIA from EDP Agency: EDP Distribuição Name of Utility: EDP Bratislava (Slovakia) Time: 45 days Data as of: February 15, 2018 Name of Utility: Západoslovenská distribučná Cost: None Data as of: February 15, 2018 Procedure 1. Submit an application for Procedure 4*. Receive internal a new connection to EDP and await Procedure 1. Apply for connection, inspection and certificate from estimate receive connection agreement, and pay Agency: EDP Distribuição connection fee certifying entity Time: 17 days Agency: Zapadoslovenska distribucna, a.s. Agency: Private inspection entity Cost: EUR 6,236 [Fees set by the regulator: EUR Time: 24 days Time: 12 days 37 for the connection services fee + EUR 11 per Cost: EUR 99 [Lowest cost for the certification Cost: EUR 7,606 [EUR 54 per kVA for the kVA for capacity charges. If works are carried out of a 140-kVA installation. Costs are charged by connection fees (54*140=EUR 7606)] by the utility, an additional cost for the external inspection entities based on market prices] works is charged, at EUR 29 per meter for shared networks plus EUR 1,243 for exclusive use of Procedure 2. Await approval of project Procedure 5. Sign supply contract networks] design by Zapadoslovenska distribucna and receive meter installation by the Agency: Zapadoslovenska distribucna, a.s. electricity retailer Procedure 2*. Receive a site visit Time: 30 days Agency: Electricity retailer by EDP for preparation of the cost Cost: None Time: 2 days estimate Cost: None Agency: EDP Distribuição Procedure 3. Await completion of Time: 1 day external works by Zapadoslovenska GETTING ELECTRICITY Cost: None distribucna Ponta Delgada (Portugal) Agency: Zapadoslovenska distribucna, a.s. Procedure 3. Obtain an excavation Time: 30 days Name of Utility: EDA Cost: None Data as of: February 15, 2018 permit from the Municipal Chamber of Porto Agency: Municipal Chamber of Porto Procedure 4*. Install private substation Procedure 1. Submit an application for Agency: Private electrical contractor Time: 18 days a new connection to EDA and await Time: 20 days Cost: EUR 12 [Fees for a permit for works on estimate Cost: EUR 28,000 [Total price for the substation a public road: EUR 11.60, per art. 1-8 of the Agency: Electricidade dos Açores (EDA) including installation, materials, substation itself, Municipal Fee Schedule] Time: 11 days labor, and equipment] Cost: EUR 6,772 [Fees set by the regulator: EUR 37 for the connection services fee + EUR 11 per *Simultaneous with previous procedure INDICATOR DETAILS - GETTING ELECTRICITY 165 Procedure 5. Sign supply contract and GETTING ELECTRICITY Procedure 2. Await approval of project await meter installation Presov (Slovakia) design by Zapadoslovenska distribucna Agency: Zapadoslovenska distribucna, a.s. and Agency: Zapadoslovenska distribucna, a.s. electricity supplier Name of Utility: Východoslovenská distribučná Time: 30 days Time: 5 days Data as of: February 15, 2018 Cost: None Cost: None Procedure 1. Apply for connection Procedure 3. Await completion of GETTING ELECTRICITY and await technical conditions for external works by Zapadoslovenska Kosice (Slovakia) connection distribucna Agency: Vychodoslovenska distribucna, a.s. Agency: Zapadoslovenska distribucna, a.s. Name of Utility: Východoslovenská distribučná Time: 20 days Time: 30 days Data as of: February 15, 2018 Cost: None Cost: None Procedure 1. Apply for connection and await technical conditions for Procedure 2. Await approval of Procedure 4*. Install private substation connection project design by Vychodoslovenska Agency: Private electrical contractor Agency: Vychodoslovenska distribucna, a.s. distribucna Time: 20 days Agency: Vychodoslovenska distribucna, a.s. Cost: EUR 28,000 [Total price for the substation Time: 20 days Time: 20 days including installation, materials, substation itself, Cost: None Cost: None labor, and equipment] Procedure 2. Await approval of Procedure 5. Sign supply contract and project design by Vychodoslovenska Procedure 3. Obtain excavation permit for the connection works await meter installation distribucna Agency: Zapadoslovenska distribucna, a.s. and Agency: Vychodoslovenska distribucna, a.s. Agency: Municipality, Transport Office electricity supplier Time: 20 days Time: 14 days Time: 5 days Cost: None Cost: EUR 122 [EUR 50 for excavation permit + EUR 0.16 per square meter per day for the tax Cost: None for using public land (0.16* 150sq.m.*3 days= Procedure 3. Obtain excavation permit GETTING ELECTRICITY EUR 72)] for the connection works Zilina (Slovakia) Agency: Municipality, Transport Office Procedure 4. Build the external Name of Utility: Stredoslovenská energetika Time: 23 days connection - Distribúcia Cost: EUR 152 [EUR 80 for the excavation permit Agency: Private electrical contractor Data as of: February 15, 2018 + EUR 0.16 per square meter per day for the tax Time: 7 days for using public land (0.16* 150sq.m.*3 days= EUR 72)] Cost: EUR 6,000 [Total price for excavation, Procedure 1. Apply for connection, materials, labor, and equipment] receive connection agreement, and pay Procedure 4. Build the external connection fee Procedure 5. Complete connection Agency: Stredoslovenska distribucna, a.s. connection agreement, sign joint supply contract, Time: 30 days Agency: Private electrical contractor pay connection fee, and await meter Cost: EUR 1,787 [Connection fees] Time: 7 days installation Cost: EUR 6,000 [Total price for excavation, materials, labor, and equipment] Agency: Vychodoslovenska distribucna, a.s. and Procedure 2. Obtain excavation permit electricity supplier for connection works Time: 5 days Agency: Municipality, Transport Office Procedure 5. Complete connection Cost: EUR 2,180 [Connection fees] Time: 14 days agreement, sign joint supply contract, Cost: EUR 250 [EUR 70 for excavation permit + pay connection fee, and await meter GETTING ELECTRICITY EUR 0.40 per square meter per day for the tax installation Trnava (Slovakia) for using public land (0.40* 150sq.m.*3 days= Agency: Vychodoslovenska distribucna, a.s. and EUR 180)] electricity supplier Name of Utility: Západoslovenská distribučná Time: 5 days Data as of: February 15, 2018 Procedure 3. Build external connection Cost: EUR 2,180 [Connection fees] and send affidavit about its readiness Procedure 1. Apply for connection, Agency: Private electrical contractor receive connection agreement, and pay Time: 7 days connection fee Cost: EUR 6,000 [Total price for excavation, Agency: Zapadoslovenska distribucna, a.s. materials, labor, and equipment] Time: 24 days Cost: EUR 7,606 [EUR 54 per kVA for the Procedure 4. Sign supply contract and connection fees (54*140=EUR 7606)] await meter installation Agency: Stredoslovenska distribucna, a.s. and electricity supplier Time: 5 days Cost: None *Simultaneous with previous procedure 166 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA GETTING ELECTRICITY - RELIABILITY OF SUPPLY AND TRANSPARENCY OF TARIFFS INDEX CROATIA CZECH REPUBLIC PORTUGAL SLOVAKIA Reliability of supply and 6 (Rijeka, Split, 8 (5 cities) 8 (Braga, Lisbon, Porto) 8 (Bratislava, transparency of tariffs index Varazdin) 7 (Liberec, 7 (Coimbra, Evora, Faro, Kosice, Presov) (0–8) 5 (Osijek, Zagreb) Olomouc) Funchal) 7 (Trnava, Zilina) 6 (Ponta Delgada) Total duration and frequency 2 (Rijeka, Split, 3 (5 cities) 3 (Braga, Lisbon, Porto, 3 (Bratislava, of outages per customer a year Varazdin) 2 (Liberec, Funchal) Kosice, Presov) (0–3) 1 (Osijek, Zagreb) Olomouc) 2 (Coimbra, Evora, Faro, 2 (Trnava, Zilina) Ponta Delgada) System average interruption 1.90 (Varazdin) 0.50 (Plzen) 0.39 (Funchal) 0.16 (Presov) duration index (SAIDI) 2.57 (Split) 0.50 (Prague) 0.50 (Braga) 0.73 (Kosice) 2.73 (Rijeka) 0.65 (Usti nad Labem) 0.56 (Porto) 0.76 (Bratislava) 4.97 (Zagreb) 0.70 (Ostrava) 0.64 (Lisbon) 1.02 (Trnava) 5.49 (Osijek) 0.78 (Brno) 0.92 (Evora) 3.07 (Zilina) 0.82 (Olomouc) 1.50 (Coimbra) 1.42 (Liberec) 1.52 (Ponta Delgada) 1.62 (Faro) System average interruption 1.14 (Varazdin) 0.30 (Prague) 0.28 (Funchal) 0.07 (Presov) frequency index (SAIFI) 1.57 (Split) 0.36 (Brno) 0.45 (Porto) 0.18 (Kosice) 1.67 (Zagreb) 0.64 (Plzen) 0.61 (Braga) 0.54 (Bratislava) 1.80 (Rijeka) 0.69 (Ostrava) 0.78 (Coimbra) 0.88 (Trnava) 3.61 (Osijek) 0.83 (Usti nad Labem) 0.82 (Lisbon) 1.80 (Zilina) 1.16 (Olomouc) 1.20 (Ponta Delgada) 1.56 (Liberec) 1.83 (Faro) 1.91 (Evora) Mechanisms for monitoring 1 1 1 1 outages (0–1) Does the distribution utility use Yes Yes Yes Yes automated tools to monitor outages? Mechanisms for restoring 1 1 1 (6 cities) 1 service (0–1) 0 (Funchal, Ponta Delgada) Does the distribution utility use Yes Yes Yes (6 cities) Yes automated tools to restore service? No (Funchal, Ponta Delgada) Regulatory monitoring (0–1) 1 1 1 1 Does a regulator—that is, an entity Yes Yes Yes Yes separate from the utility—monitor the utility’s performance on reliability of supply? Financial deterrents aimed at 0 1 1 1 limiting outages (0–1) Does the utility either pay No Yes Yes Yes compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Communication of tariffs and 1 1 1 1 tariff changes (0–1) Are effective tariffs available Yes Yes Yes Yes online? Are customers notified of a change Yes Yes Yes Yes in tariff ahead of the billing cycle? Source: Doing Business database. REGISTERING PROPERTY IN CROATIA Procedures required to register a property, by city Property value: HRK 3,990,155.80 (EUR 536,433.80) Data as of: February 15, 2018 Osijek Rijeka Split Varazdin Zagreb Comments 1. Obtain the land registry extract from the Time (days) 1 1 1 1 1 As part of the due diligence, the buyer needs to verify the status of the land competent Land Registry Office registry. In practice, the buyer obtains a land registration extract in person at the Cost (HRK) 20 20 20 20 20 the Land Registy Office of the Municipal Court, although it is possible to obtain informal exctacts online. 2. Notary notarizes the sale contract Time (days) 1 1 1 1 1 A notary must notarize the sale and purchase agreement. The notary fee for certification of the seller’s signature is HRK 40 (EUR 5.38). Cost (HRK) 40 40 40 40 40 3. Register the title transfer at the Land Registry Time (days) 28 37 70 45 45 The parties submit the request for property registration to the Land Registry Office Office. The registration fee payable to the Land Registry Office is HRK 200 (EUR 26.89), and the stamp duty is HRK 50 (EUR 6.67). Since 2017, lawyers Cost (HRK) 250 250 250 250 250 and notaries with special certification can take care of the entire registration process on behalf of their clients and directly submit the application online. 4. Submit the sale contract to the municipal tax Time (days) 29* 30* 30* 30* 30* The buyer usually submits the sale contract to the municipal tax administration administration to receive an estimate of the land (although the notary is legally mandated to do the same as well). transfer taxes Cost (HRK) - - - - - 5. Pay land transfer taxes, stamp duty and Time (days) 1* 1* 1* 1* 1* In addition to the registration fee payable to the Land Registry Office and the registration fees at the commercial bank or post stamp duty, the buyer must pay the real estate transfer tax, which was reduced office Cost (HRK) 159,606 159,606 159,606 159,606 159,606 on January 1, 2017, from 5% of the property value to 4%. Source: Doing Business database. *Takes place simultaneously with another procedure. INDICATOR DETAILS - REGISTERING PROPERTY 167 168 REGISTERING PROPERTY IN THE CZECH REPUBLIC Procedures required to register a property, by city Property value: CZK 21,036,006.70 (EUR829,169) Data as of: February 15, 2018 Brno Liberec Olomouc Ostrava Plzen Prague Usti nad Labem Comments 1. The buyer checks for Time (days) 0.5 0.5 0.5 0.5 0.5 0.5 0.5 In practice, the buyer, or a lawyer on behalf of the buyer, encumbrances on the property verifies whether the property has any encumbrances on it. Cost (CZK) 100 100 100 100 100 100 100 Encumbrances are usually checked on-line. 2. A notary certifies the signatures Time (days) 1 1 1 1 1 1 1 By law, the transfer agreement does not have to be executed of the transfer agreement in the form of notarial deed and the signatures of the Cost (CZK) 60 60 60 60 60 60 60 contractual parties on the transfer agreement do not have to be certified. However, the Cadastral Office must verify (as specified by law) the identity of the parties and manifestation of their will. Therefore, it is useful and common practice to have the signatures certified by a notary. But this can also be done by a civil servant—at a cadastral office, a registrar’s office (matrika), or in one of the Czech Point service centers. The notarization takes place without delay and costs CZK 30 per each signature + 21% VAT. 3. Apply for registration at the Time (days) 22 23 23 21 25 25 22 Parties apply for registration at the Cadastral Office either in Cadastral Office person or electronically. There is a CZK 1000 lump sum fee Cost (CZK) 1,000 1,000 1,000 1,000 1,000 1,000 1,000 payable for the registration into the cadastre. Upon receipt of the application for title registration, the Cadastral Office has 48 hours to issue a seal on the property and inform all the relevant parties. A 20-day stay period starts upon the issuance of the seal. During this 20-day period nothing can be done with the application and no registration can be performed. 4. Pay the Real Estate Transfer Tax Time (days) 1 1 1 1 1 1 1 The Cadastre is responsible for informing the tax authority about the transfer so that they record it and can collect Cost (CZK) 841,440 841,440 841,440 841,440 841,440 841,440 841,440 the tax. Registration of the transfer is not conditional upon payment of the tax. The tax rate is 4 % of the higher of the purchase price and the value (as estimated by an expert to be paid by the parties to the transfer agreement). The Tax on Real Estate Acquisition can be paid at the Tax authority, at a commercial bank, or even online. The Tax on Real Estate Acquisition must be paid to the tax authority within 3 months following the month of the registration. Source: Doing Business database. DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA REGISTERING PROPERTY IN PORTUGAL Procedures required to register a property, by city Property value: EUR 877,206.50 Data as of: February 15, 2018 Braga Coimbra Evora Faro Funchal Lisbon Ponta Delgada Porto Comments 1. Register the property at the Time (days) 2 4 3 1 1 10 1 8 The buyer usually needs to make an appointment Casa Pronta service desk at a Casa Pronta service desk where s/he will be allowed to prepare a deed, pay taxes, and transfer the property on the spot. The fees to register a property transfer at a Casa Pronta service desk are regulated and apply throughout the country. Under Cost (EUR) 64,411 64,411 64,411 64,411 64,411 64,411 64,411 64,411 the standard procedure they amount to EUR 375. In addition, a municipal property transfer tax is payable at a single rate of 6.5% of the property value, and a stamp duty of 0.8% is due for the registration of the public deed in the land registry office. Source: Doing Business database. REGISTERING PROPERTY IN SLOVAKIA Procedures required to register a property, by city Property value: EUR 728,246.20 Data as of: February 15, 2018 Bratislava Kosice Presov Trnava Zilina Comments 1. Each party obtains extracts from the Time (days) 0.5 0.5 0.5 0.5 0.5 Diligent entrepreneurs will obtain an extract (online) from the commercial commercial register held by the respective court registry at the district court. Cost (EUR) 0 0 0 0 0 2. Confirm the signature authenticity of the Time (days) 1 1 1 1 1 The signatures on the sale and purchase agreement are usually certified by a seller before applying for registration notary or at a registrar’s office (matrika). The fees for signature verification at the matricka amount to EUR 6. In practice, four copies of sale and purchase Cost (EUR) 6 6 6 6 6 agreement are made: two for the cadastre and one for each party. Each of the four signatures costs EUR 1.50. 3. Submit the application for registration of Time (days) 15 6 15 4 8 In practice, the buyer visits the district office cadastral department in person to the transfer (the proposal for entry into the register the property transfer, although it is possible to submit the application cadastre) with the competent district office online. The fees for registering a property transfer under the expedited procedure cadastral department Cost (EUR) 266 266 266 266 266 amount to EUR 266 when the registration is submitted in paper form; EUR 133 when it is submitted electronically Source: Doing Business database. INDICATOR DETAILS - REGISTERING PROPERTY 169 170 REGISTERING PROPERTY - QUALITY OF LAND ADMINISTRATION INDEX (continued) CROATIA CZECH REPUBLIC PORTUGAL SLOVAKIA Answer Score Answer Score Answer Score Answer Score Quality of land administration index (0–30) 23.5 25 20 25.5 Reliability of infrastructure index (0–8) 6 8 6 6 In what format are the majority of title or deed records Computer/ 2 Computer/ 2 Computer/ 2 Paper 0 kept in the largest business city—in a paper format or in Fully digital Fully digital Fully digital a computerized format (scanned or fully digital)? (0–2) Is there an electronic database for checking for Yes 1 Yes 1 Yes 1 Yes 1 encumbrances (liens, mortgages, restrictions and the like)? (0–1) In what format are the majority of maps of land plots kept Computer/ 1 Computer/ 2 Computer/ 2 Computer/ 2 in the largest business city—in a paper format or in a Scanned Fully digital Fully digital Fully digital computerized format (scanned or fully digital)? (0–2) Is there an electronic database for recording boundaries, Yes 1 Yes 1 Yes 1 Yes 1 checking plans and providing cadastral information (geographic information system)? (0–1) Is the information recorded by the immovable property Different 1 Single 1 Separate 0 Different 1 registration agency and the cadastral or mapping agency databases but database databases databases but kept in a single database, in different but linked databases linked linked or in separate databases? (0–1) Do the immovable property registration agency and No 0 Yes 1 No 0 Yes 1 cadastral or mapping agency use the same identification number for properties? (0–1) Transparency of information index (0–6) 3.5 4 4.5 5.5 Who is able to obtain information on land ownership at Anyone who pays 1 Freely accessible 1 Freely accessible 1 Freely accessible 1 the agency in charge of immovable property registration the official fee by anyone by anyone by anyone in the largest business city? (0–1) Is the list of documents that are required to complete any Yes, online 0.5 Yes, online 0.5 Yes, online 0.5 Yes, on public 0.5 type of property transaction made publicly available–and boards if so, how? (0–0.5) Is the applicable fee schedule for any property transaction Yes, online 0.5 Yes, online 0.5 Yes, online 0.5 Yes, online 0.5 at the agency in charge of immovable property DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA registration in the largest business city made publicly available–and if so, how? (0–0.5) REGISTERING PROPERTY - QUALITY OF LAND ADMINISTRATION INDEX (continued) CROATIA CZECH REPUBLIC PORTUGAL SLOVAKIA Answer Score Answer Score Answer Score Answer Score Does the agency in charge of immovable property No 0 Yes, online 0.5 Yes, online 0.5 Yes, online 0.5 registration commit to delivering a legally binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? (0–0.5) Is there a specific and separate mechanism for filing No 0 No 0 Yes 1 Yes 1 complaints about a problem that occurred at the agency in charge of immovable property registration? (0–1) Are there publicly available official statistics tracking Yes 0.5 Yes, online 0.5 Yes 0.5 No 0 the number of transactions at the immovable property registration agency? (0–0.5) Who is able to consult maps of land plots in the largest Freely accessible 0.5 Freely accessible 0.5 Anyone who pays 0.5 Freely accessible 0.5 business city? (0–0.5) by anyone by anyone the official fee by anyone Is the applicable fee schedule for accessing maps of land Yes, online 0.5 Yes, online 0.5 Yes, in person 0 Yes, online 0.5 plots made publicly available—and if so, how? (0–0.5) Does the cadastral or mapping agency commit to No 0 No 0 No 0 Yes, online 0.5 delivering an updated map within a specific time frame— and if so, how does it communicate the service standard? (0–0.5) Is there a specific and separate mechanism for filing No 0 No 0 No 0 Yes 0.5 complaints about a problem that occurred at the cadastral or mapping agency? (0–0.5) Geographic coverage index (0–8) 8 8 4 8 Are all privately held land plots in the economy formally Yes 2 Yes 2 No 0 Yes 2 registered at the immovable property registry? (0–2) Are all privately held land plots in the business city Yes 2 Yes 2 Yes 2 Yes 2 formally registered at the immovable property registry? (0–2) Are all privately held land plots in the economy mapped? Yes 2 Yes 2 No 0 Yes 2 (0–2) Are all privately held land plots in the business city Yes 2 Yes 2 Yes 2 Yes 2 mapped? (0–2) INDICATOR DETAILS - REGISTERING PROPERTY 171 172 REGISTERING PROPERTY - QUALITY OF LAND ADMINISTRATION INDEX (continued) CROATIA CZECH REPUBLIC PORTUGAL SLOVAKIA Answer Score Answer Score Answer Score Answer Score Land dispute resolution index (0–8) 6 5 5.5 6 Does the law require that all property sale transactions Yes 1.5 Yes 1.5 Yes 1.5 Yes 1.5 be registered at the immovable property registry to make them opposable to third parties? (0–1.5) Is the system of immovable property registration subject Yes 0.5 Yes 0.5 Yes 0.5 Yes 0.5 to a state or private guarantee? (0–0.5) Is there a specific compensation mechanism to cover for Yes 0.5 No 0 Yes 0.5 No 0 losses incurred by parties who engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? (0–0.5) Does the legal system require a control of legality of the Yes 0.5 Yes 0.5 Yes 0.5 Yes 0.5 documents necessary for a property transaction (e.g., checking the compliance of contracts with requirements of the law)? (0–0.5) Does the legal system require verification of the identity Yes 0.5 Yes 0.5 Yes 0.5 Yes 0.5 of the parties to a property transaction? (0–0.5) Is there a national database to verify the accuracy of No 0 No 0 Yes 1 Yes 1 identity documents? (0–1) How long does it take on average to obtain a decision Between 1 2 Between 1 2 Between 2 1 Between 1 2 from the first-instance court for such a case (without and 2 years and 2 years and 3 years and 2 years appeal)? (0–3) Are there any statistics on the number of land disputes in Yes 0.5 No 0 No 0 No 0 the first instance? (0–0.5) Equal access to property rights index (-2–0) 0 0 0 0 Do unmarried men and unmarried women have equal Yes 0 Yes 0 Yes 0 Yes 0 ownership rights to property? Do married men and married women have equal Yes 0 Yes 0 Yes 0 Yes 0 ownership rights to property? DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Source: Doing Business database. INDICATOR DETAILS - ENFORCING CONTRACTS 173 ENFORCING CONTRACTS - TIME AND COST TO RESOLVE A COMMERCIAL DISPUTE, BY CITY Time (days) Cost (% of claim) Filing and Trial and Enforcement Total Attorney Court Enforcement Total City (Country) service judgment of judgment time fees costs costs cost Osijek (Croatia) 40 280 190 510 8.6 4.5 2.6 15.7 Rijeka (Croatia) 45 300 480 825 8.6 4.4 2.6 15.6 Split (Croatia) 75 397 365 837 8.0 4.4 2.6 15.0 Varazdin (Croatia) 130 255 300 685 8.6 4.4 2.6 15.6 Zagreb (Croatia) 50 365 235 650 8.6 4.0 2.6 15.2 Brno (Czech Republic) 60 600 180 840 13.1 5.7 15.0 33.8 Liberec (Czech Republic) 90 530 150 770 13.1 5.7 15.0 33.8 Olomouc (Czech Republic) 75 510 120 705 13.1 5.7 15.0 33.8 Ostrava (Czech Republic) 90 480 120 690 13.1 5.7 15.0 33.8 Plzen (Czech Republic) 75 480 125 680 13.1 5.7 15.0 33.8 Prague (Czech Republic) 88 410 180 678 13.1 5.7 15.0 33.8 Usti nad Labem (Czech Republic) 70 510 150 730 13.1 5.7 15.0 33.8 Braga (Portugal) 30 330 180 540 10.7 6.0 0.5 17.2 Coimbra (Portugal) 30 300 180 510 10.7 6.0 0.5 17.2 Evora (Portugal) 30 350 180 560 10.7 6.0 0.5 17.2 Faro (Portugal) 30 385 180 595 10.7 6.0 0.5 17.2 Funchal (Portugal) 30 365 180 575 10.7 6.0 0.5 17.2 Lisbon (Portugal) 30 545 180 755 10.7 6.0 0.5 17.2 Ponta Delgada (Portugal) 30 365 180 575 10.7 6.0 0.5 17.2 Porto (Portugal) 30 420 180 630 10.7 6.0 0.5 17.2 Bratislava (Slovakia) 70 525 180 775 14.0 6.4 0.1 20.5 Kosice (Slovakia) 55 455 125 635 14.0 6.4 0.1 20.5 Presov (Slovakia) 60 455 125 640 14.0 6.4 0.1 20.5 Trnava (Slovakia) 70 490 150 710 14.0 6.4 0.1 20.5 Zilina (Slovakia) 70 490 180 740 14.0 6.4 0.1 20.5 Source: Doing Business database. 174 ENFORCING CONTRACTS - QUALITY OF JUDICIAL PROCESSES INDEX (continued) CROATIA CZECH REPUBLIC PORTUGAL SLOVAKIA Answer Score Answer Score Answer Score Answer Score Quality of judicial processes index (0–18) 13.0 9.5 13.5 13.5 Court structure and proceedings (0–5) 5.0 1.5 3.5 3.5 1. Is there a court or division of a court dedicated solely to Yes 1.5 No 0.0 No 0.0 No 0.0 hearing commercial cases? (0–1.5) 2. Small claims court (0–1.5) 1.5 0.0 1.5 1.5 2.a. Is there a small claims court or a fast-track procedure Yes No Yes Yes for small claims? 2.b. If yes, is self-representation allowed? Yes N/A Yes Yes 3. Is pretrial attachment available? (0–1) Yes 1.0 Yes 1.0 Yes 1.0 Yes 1.0 4. Are new cases assigned randomly to judges? (0–1) Yes, automatically 1.0 Yes, but manual 0.5 Yes, automatically 1.0 Yes, automatically 1.0 5. Does a woman's testimony carry the same evidentiary weight Yes 0.0 Yes 0.0 Yes 0.0 Yes 0.0 in court as a man's? (-1–0) Case management (0–6) 3.5 3.0 5.0 4.0 1. Time standards (0–1) 1.0 0.0 1.0 0.0 1.a. Are there laws setting overall time standards for key Yes No Yes Yes court events in a civil case? 1.b. If yes, are the time standards set for at least three Yes N/A Yes No court events? 1.c. Are these time standards respected in more than Yes N/A Yes Yes 50% of cases? 2. Adjournments (0–1) 0.5 0.0 0.0 0.0 2.a. Does the law regulate the maximum number of No No No No adjournments that can be granted? 2.b. Are adjournments limited to unforeseen and Yes No No No exceptional circumstances? 2.c. If rules on adjournments exist, are they respected in Yes N/A N/A N/A more than 50% of cases? 3. Can two of the following four reports be generated about Yes 1.0 Yes 1.0 Yes 1.0 Yes 1.0 the competent court: (i) time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA progress report? (0–1) 4. Is a pretrial conference among the case management Yes 1.0 Yes 1.0 Yes 1.0 Yes 1.0 techniques used before the competent court? (0–1) 5. Are there any electronic case management tools in place No 0.0 Yes 1.0 Yes 1.0 Yes 1.0 within the competent court for use by judges? (0–1) ENFORCING CONTRACTS - QUALITY OF JUDICIAL PROCESSES INDEX (continued) CROATIA CZECH REPUBLIC PORTUGAL SLOVAKIA Answer Score Answer Score Answer Score Answer Score 6. Are there any electronic case management tools in place No 0.0 No 0.0 Yes 1.0 Yes 1.0 within the competent court for use by lawyers? (0–1) Court automation (0-4) 2.0 3.0 2.5 4.0 1. Can the initial complaint be filed electronically through a No 0.0 Yes 1.0 Yes 1.0 Yes 1.0 dedicated platform within the competent court? (0–1) 2. Is it possible to carry out service of process electronically for No 0.0 Yes 1.0 No 0.0 Yes 1.0 claims filed before the competent court? (0–1) 3. Can court fees be paid electronically within the competent Yes 1.0 Yes 1.0 Yes 1.0 Yes 1.0 court? (0–1) 4. Publication of judgments (0–1) 1.0 0.0 0.5 1.0 4.a. Are judgments rendered in commercial cases at all Yes No No Yes levels made available to the general public through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the Yes No Yes Yes appellate and supreme court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0–3) 2.5 2.0 2.5 2.0 1. Arbitration (0–1.5) 1.5 1.5 1.5 0.5 1.a. Is domestic commercial arbitration governed by Yes Yes Yes Yes a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those No No No Yes that deal with public order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually Yes Yes Yes No enforced by the courts? 2. Mediation/Conciliation (0–1.5) 1.0 0.5 1.0 1.5 2.a. Is voluntary mediation or conciliation available? Yes Yes Yes Yes 2.b. Are mediation, conciliation or both governed by Yes No Yes Yes a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there financial incentives for parties to attempt No No No Yes mediation or conciliation (i.e., if mediation or conciliation is successful, a refund of court filing fees, income tax credits or the like)? INDICATOR DETAILS - ENFORCING CONTRACTS Source: Doing Business database. 175 176 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Acknowledgments Doing Business in the European Union 2018: project. The communication campaign Ministry of Interior, the Energy Regulatory Croatia, the Czech Republic, Portugal and was designed and led by Indira Chand in Office, the Financial Administration, Slovakia was produced by a team led by collaboration with Oliver Joy in Brussels the Ministry of Justice and the State Madalina Papahagi, Tommaso Rooms, and Vanja Frajtic in Zagreb. The website Administration of Land Surveying and Pilar Salgado Otónel and Julien Vilquin. (http://www.doingbusiness.org/EU2) Cadastre of the Czech Republic; (iii) The team comprised Iria Buxan Raposo, was developed by Varun Doiphode, the Directorate-General for Energy and Laura Sagnori Diniz, Marko Grujicic, Fengsheng Huang, Kamalesh Sengaonkar Geology, the Directorate-General for Anushavan Hambardzumyan, Nikola Ilic, and Bishal Raj Thakuri. The report was Justice Policy, the Institute of Registries Matej Jankovic, Branislav Kralik, Matus edited by Alison Strong, and the layout and Notaries and the Tax Authority of Muron, Dasa Musulin, Denisa Pacholska, produced by Luis Liceaga. Portugal; and (iv) the Ministry of Justice, Diogo Pereira and Erick Tjong. The report the Ministry of Interior, the Financial was prepared under the direction of The study was funded by the European Administration, the Ministry of Transport Mierta Capaul. Commission, Directorate-General Regional and Construction, the Regulatory Office and Urban Policy. It was undertaken under for Network Industries and the Geodesy, The team is grateful for valuable peer the auspices of the Ministry of Economy, Cartography and Cadastre Authority of review comments provided by col- Entrepreneurship and Crafts of Croatia (a Slovakia. leagues from across the World Bank team from the Agency for Investments Group. Alejandro Espinosa Wang, Todor and Competitiveness composed of Vinka Data collection was carried out in collabo- Milchevski and Tea Trumbic reviewed Jelavic and Filip Kocis and led by Andrea ration with (i) Nada projekt d.o.o. (team led the full text. Experts in each of the five August); the Ministry of Trade and Industry by Tatjana Halapija and Michael Glazer) areas measured were consulted when of the Czech Republic (a team led by Hana and Hanžeković & Partners (team led by drafting the individual chapters: Jean Šimková and Ladislav Prudký); the Ministry Irina Jelčić and comprising Petra Gjurašić, Arlet, Yuriy Avramov, Karim Belayachi, of the Presidency and Administrative Petra Penić and Ana Jurić) in Croatia; (ii) Camille Bourguignon-Roger, Diane Modernisation of Portugal (a team led by Asociace Energetickych Manazeru (team Davoine, Klaus Decker, Marie Lily Delion, Mariana Maia Rafeiro and Tiago Joanaz led by Lucie Janouskova), the Czech Andreja Marusic, Frederic Meunier, de Melo); and the Ministry of Economy (a Chamber of Architects (team led by Tereza Aris Molfetas-Lygkiaris, Albert Nogués team led by Tatiana Hlušková and Patrik Michalová) and PRK Partners (team led by i Comas, Nadia Novik, Maria Antonia Turošík, under the general supervision Jakub Lichnovský and Petra Stupková) in Quesada and Alessio Zanelli. of Iveta Šimončičová) and Ministry of the Czech Republic; (iii) PLMJ Advogados, Finance of Slovakia (a team led by Štefan SP, RL (team led by Luís Miguel Pais Arup Banerji, Elisabetta Capannelli, Domonkos). Antunes and Nuno Pimentel Gomes) Marcus Bernhard Heinz, Marta Mueller in Portugal; and (iv) alianciaadvokátov Guicciardini, Rita Ramalho, Tony The project team extends special thanks ak, s.r.o. (team led by Gerta Sámelová Thompson and Isfandyar Zaman Khan for information and assistance provided Flassiková and including Jana Bačeková), provided guidance and leadership. throughout the project to (i) the Agency the Slovak Chamber of Architects (team Antonio Borges, Katherine Angela for Investments and Competitiveness, led by Olga Miháliková and comprising Haynes, Ruzica Jugovic, Anna Karpets, the Financial Agency (FINA), HEP ODS, Kornel Kobák, Eva Martanovicova and Ana Krnic, Bogdanka Krtinic, Trimor Mici, HITRO.HR, the Ministry of Construction Maria Sefcova) and Electrik s.r.o. (team Joanna Nasr, Monique Pelloux, Ivanka and Physical Planning, the Ministry of led by Martina Maláková and including Perkovic, Patrizia Poggi, Sylvia Stoynova Justice and Land Registry offices, the Zuzana Miháliková) in Slovakia. Valuable and Marilina Vieira provided valuable State Geodetic Administration and the feedback and data were also contrib- assistance at various stages of the Tax Administration of Croatia; (ii) the uted by the law firm Marohnić, Tomek & ACKNOWLEDGMENTS 177 Gjoić in Croatia and the Administrative Modernisation Agency, the Solicitors and Enforcement Agents National Association and the National Laboratory for Civil Engineering in Portugal, as well as the Czech Chamber of Notaries, the Czech Chamber of Bailiffs and the Slovak Chamber of Notaries. More than 700 lawyers, notaries, engineers, electricians, architects, construction experts, utility providers, public officials, magistrates and bailiffs contributed to Doing Business in the European Union 2018: Croatia, the Czech Republic, Portugal and Slovakia. The team would like to express its special gratitude to the national and local public officials and members of the judiciary who par- ticipated in the project and who made valuable comments during the consulta- tion and data review period. The names of those wishing to be acknowledged are listed on the following pages. 178 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA PRIVATE SECTOR Marina Krka Law office Krka & Krka d.o.o. Tin Matić Law office Tin Matić OSTRAVA Robert Reiss PRK Partners, s.r.o. Martin Chválek CONTRIBUTORS & Partners d.o.o. Chválek Ateliér, s.r.o. advokátní kancelář Marina Mrklić Law office Mrklić & Partners, Ana Vrsaljko Metelko Jan Krömer CROATIA general partnership Law office Žurić & Partners d.o.o. Mgr. Jan Krömer, advokát USTI NAD LABEM Mihael Perković Dino Simonoski Bukovski Jana Ondrušová OSIJEK Law office Mrklić & Partners, Law office Žurić & Partners d.o.o. Eva Šámalová Mgr. Jana Ondrušová, advokátka Advokátní kancelář Juraj Marinić general partnership Attorney-at-law Edin Karakaš JUDr. Eva Šámalová Law office Žurić & Partners d.o.o. PLZEN Václav Derfl Marija Lončarević Latković VARAZDIN Attorney-at-law Mario Šulic Jaroslav Drda Centropol Energy, a.s. Davorin Telebar Projektni Biro Naglić d.o.o. A.I.R. Akcent, s.r.o. Mislav Matijević Edison d.o.o. Jan Hrouda Attorney-at-law Visnja Kljajić Marian Franc Ing. Arch. Jan Hrouda Jelena Damjanović Barić Zemljana Grupa d.o.o. Advokátní kancelář Zlatko Zvonarević Law office Damjanović, Franc a Strejček Filip Štípek Attorney-at-law Golenko, Belovari Zlatarek, JUDr. Filip Štípek, advokát Damjanović Barić Jaroslav Svejkovský Damir Miljački Advokátní kancelář Svejkovský, Jiří Císař Electra Natura d.o.o. Majda Damjanović CZECH REPUBLIC Kabelková, Šlauf a spol. JUDr. Jiří Císař, advokátní kancelář Law office Damjanović, Sreten Baljak Golenko, Belovari Zlatarek, BRNO Pavla Sýkorová Jakub Kučera Law office Vučković Baljak Damjanović Barić Advokátní kancelář Svejkovský, Mgr. Jakub Kučera, advokát Jan Sedláček Electrical Contractor Kabelková, Šlauf a spol. Mirela Džoja Petrlić Ana Petrić Law office Zagoršćak Law office Petrić and others d.o.o. Radek Hiřman Dalibor Borák & Partners d.o.o. Ing. Arch. Dalibor Borák - OSVČ AKB advokátní kancelář, s.r.o. PORTUGAL Hrvoje Petrić Tihomir Zec Law office Petrić and others d.o.o. Martin Říha Jakub Kynčl BRAGA Law office Zec & Partners d.o.o. Knesl Kynčl Architekti, s.r.o. Mgr. Martin Říha - notář v Plzni Krunoslav Vukalović Armando Oliveira Vedrana Švedl Blažeka Law office Uskoković Armando A Oliveira & Eva Kocmanová Law office Željko Švedl & & Partners d.o.o. PRAGUE Marlene Sá Carneiro, RL Mgr. Eva Kocmanová, advokát Vedrana Švedl Blažeka Jiří Žežulka Zdenka Šarolić João Folhadela Lemos Jan Týče Apogeo Group, SE Danijel Fridl Studio Nexar d.o.o. Attorney-at-law Mgr. Jaroslav Homola, Sirrah Projekt Exekutorský úřad Brno-město Lucie Janoušková Mário Sequeira Kresimir Lešić ZAGREB Asociace energetických manažerů Jiří Puttner AZO - Sequeira Arquitectos Sirrah Projekt Iva Rukavina Puttner, s.r.o. Tereza Michalová Associados Arhi grupa Czech Chamber of Architects Pavel Rada Pedro Soares RIJEKA Džemal Redžić Rada Architekti, s.r.o. Vladimír Plášil AZO - Sequeira Arquitectos Boris Cimaš Biro Redžić Czech Chamber of Bailiffs Associados Cimaš Arhitektura d.o.o. Jana Sedláková Marko Kolar Sedlakova Legal, s.r.o. Berenika Wünschová J. Cerqueira Alves Martina Gudac KOL proces d.o.o. Czech Chamber of Notaries Cerqueira Alves & Associados, EXPONO d.o.o. Sociedade de Advogados, RL Lovro Kovačić LIBEREC Martin Grubner Maja Stanin Law office Gugić & Kovačić d.o.o. Grubner & Partners, s.r.o. Paula Martins Cunha Michal Tandler Clementino Cunha & Associados, Law office Maćešić & Partners d.o.o. AK Tandler advokátní kancelář Irena Vinter Gregorić Sociedade de Advogados, RL Miran Maćešić Law office Ilić, Orehovec Josef Smutný Petr Čížek Miguel Afonso Moreira Law office Maćešić & Partners d.o.o. i partneri d.o.o. Ilex Design, s.r.o. Čížek & Partneři DST Real State Marina Žic Ivna Medić Dagmar Dubecká Vladimír Balda EDP Distribuição - Energia, S.A. Law office Marina Žic Law office Kallay & Partners d.o.o. Kocián Šolc Balaštík, Ing. Arch. Vladimír Balda advokátní kancelář, s.r.o. Marko Puhovac Marko Kallay Helena Almeida Jiří Žid Espressinstal - Instalações Law office Marko Puhovac Law office Kallay & Partners d.o.o. Lucie Kačerová Jiří Žid Ateliér Architektury, s.r.o. Eléctricas, Lda. Kocián Šolc Balaštík, Ingrid Jurcan Lakićević Vedran Plasaj advokátní kancelář, s.r.o. Pavel Nalezený N4A1 Arquitetura, Lda. Law office Vukić and Partners d.o.o. Law office Kallay & Partners d.o.o. Studio Raketoplan, s.r.o. Pavel Dejl Zoran Vukić Tin Težak Kocián Šolc Balaštík, Law office Vukić and Partners d.o.o. Law office Madirazza advokátní kancelář, s.r.o. COIMBRA & Partners d.o.o. OLOMOUC Elsa Pisarro Tatjana Rakovac Petr Konečný Petr Kvapil Attorney-at-law Urbanisticki studio Rijeka d.o.o. Natalija Perić Advokátní kancelář Konečný, s.r.o. Kvapil & Šulc, advokátní kancelář Law office Mamic, Peric, EDP Distribuição - Energia, S.A. Reberski, Rimac d.o.o. Jan Valenta Petra Walderová SPLIT Bailiff Office Mgr. Petra Walderová Nelson Costa Vladimir Mamić Electro VN, Lda. Ana Dora Bego Lovrinčević Law office Mamic, Peric, Jakub Dohnal Daniela Machová Ariozo d.o.o. Reberski, Rimac d.o.o. Dohnal Pertot Slanina, Notářská Kancelář JUDr. Cristina Ferreira advokátní kancelář, v.o.s. Daniely Machové Frade, Ferreira, Fonseca & Ana Mahmutović Tena Tomek Associados, Sociedade de Agentes Attorney-at-law Law office Marohnić, Zdeněk Rozsypal Pavel Hnilička de Execução e Solicitadores, SP, RL Tomek & Gjoić d.o.o. Electrical Contractor Pavel Hnilička Architekti, s.r.o. Ante Vujčić Isabel Anjinho Attorney-at-law Boris Porobija David Helcel Jakub Lichnovský Jorge Anjinho, AEGP, Lda. Law office Porobija and Ing. Arch. David Helcel PRK Partners, s.r.o. Boris Ivanći Porobija, general parnership advokátní kancelář José Luis Carvalhos Attorney-at-law Irena Bischofová Jorge Anjinho, AEGP, Lda. Ivo Pletikosa JUDr. Irena Bischofová Jana Pekařová Mario Boras Law office Šunić and Partners, Notářka v Olomouci PRK Partners, s.r.o. João Fernandes Attorney-at-law general partnership advokátní kancelář R3FORM, Lda. Ante Kraljević Vlatko Kregar Petra Stupková Manuel Rodrigues EPS Law office Šunić and Partners, PRK Partners, s.r.o. Rodrigues - Instalações general partnership advokátní kancelář Eléctricas, Lda. ACKNOWLEDGMENTS 179 António Mendes Dias FUNCHAL João Ventura Gonçalo Cordeiro SLOVAKIA RSA - Raposo Subtil e Associados Ana Flor Morais Leitão, Galvão Teles, SAL WORKS Sociedade de Advogados Abreu Advogados Soares da Silva & Associados BRATISLAVA Sotécnica - Sociedade Sotécnica - Sociedade Luís Roquette Geraldes Electrotécnica, S.A. Tomáš Oravec Marcelo Nóbrega Electrotécnica, S.A. Morais Leitão, Galvão Teles, 1. účtovná, spol. s.r.o. Amper Ilha, Lda. Soares da Silva & Associados PORTO Ladislav Jančo Duarte Trindade Fernandes EVORA Patrícia Melo Gomes Advokátska kancelária JANČO Attorney-at-law Alexandra Ferreira Morais Leitão, Galvão Teles, A PARTNERI, s.r.o. Luis Assis Élvio Pereira Soares da Silva & Associados Attorney-at-law Elsa Sá Carneiro Gerta Sámelová Flassiková Attorney-at-law Abreu Advogados Sónia Vasques Alianciaadvokátov ak, s.r.o. Bernardino Sousa Dias José Jorge Saldanha Cardoso Pares Advogados Bernardino Sousa Dias, Lda. Isabel Pinheiro Torres Jana Bačeková Attorney-at-law Abreu Advogados Fernando Costal Carinhas Alianciaadvokátov ak, s.r.o. Consultório D’Obra Consultoria, Desenho e Mediação de Obras Agostinho Figueira PLMJ Advogados, SP, RL Rui Peixoto Duarte Michaela Halačová Empresa de Electricidade Abreu Advogados Mafalda Falcão Bailiff Office José Filipe Ramalho da Madeira (EEM) EA JFCR & Associlados, Lda. PLMJ Advogados, SP, RL Cristina Cardoso Michal Dušanič Rui Jorge Velosa AICCOPN - Associação dos Cristina Bogado Menezes Bratislavská vodárenská EDP Distribuição - Energia, S.A. Empresa de Electricidade Industriais da Construção RSA - Raposo Subtil e Associados, spoločnosť, a.s. da Madeira (EEM) Civil e Obras Públicas Celestina Barneto Sociedade de Advogados Juraj Vaníček Enforcement Agent Massa Cinzenta, Lda. Sonia Oliveira Sotécnica - Sociedade CLC advokátska kancelária, s.r.o. Electrotécnica, S.A. AICCOPN - Associação dos Luis Fernandes Manuel Pita Industriais da Construção Martina Maláková Evorlamp, Lda. MLGTS Paulo Cardoso Civil e Obras Públicas Electrik, s.r.o. José Chora Sara Teixeira Termogod - Gestão e Manutenção de Empreendimentos, Lda. José de Freitas Zuzana Miháliková Mediévora, Lda. MLGTS Cuatrecasas, Gonçalves Pereira Electrik, s.r.o. Mário Quenino Pedro Alves Adriano Squilacce & Associados, Sociedade Uría Menéndez - Proença de Advogados, SP, RL Energomaxx, s.r.o. Mgetensão - Projectos, Instalações Pre_Set Systems - Unipessoal, Lda. Elétricas e Comunicações, Lda. de Carvalho Vasco Moura Ramos Kornel Kobák Célio Silva Francisco Sousa Coutinho Cuatrecasas, Gonçalvez Pereira FORFORM, s.r.o. Miguel Pedroso de Lima RC Automação, Lda. Vieira de Almeida & Associados, & Associados, Sociedade Miguel Pedroso Lima, Jana Markechová Miguel Malaguerra Sociedade de Advogados, SP, RL de Advogados, SP, RL Arquitecto, Unipessoal, Lda. MARKECHOVA JMJ LEGAL, MSB Arquitectos EDP Distribuição - Energia, S.A. advokátska kancelária, s.r.o. Rodigá - Redes Eléctricas Unipessoal, Lda. Tánia Nunes PONTA DELGADA Fernando Manuel de Silva Magdaléna Markechová ZeroVinteOito – Álvaro Ribeiro Rodrigues MARKECHOVA JMJ LEGAL, Rui Silva Russo Arquitectura | Design Advogado de Prática Individual Enforcement Agent advokátska kancelária, s.r.o. Rui Silva Russo - Atelier de Arquitectura, Lda. Francisco Monteiro da Silva Margaréta Markechová Avelino Soares LISBON Attorney-at-law Faixa Vertical, Unipessoal, Lda. MARKECHOVA JMJ LEGAL, Vestígios & Lugares Alexandra Nascimento Correia advokátska kancelária, s.r.o. Construções, Lda. Noé Rodrigues José Valente Abreu Advogados Attorney-at-law J.F. Valente, Lda. NZES energy, s.r.o Gonçalo Vaz Osório FARO Alvim Cortes, Esperança, Vaz Paulo Pinheiro Leite Jorge Pinto Eva Martanovicova Francisco Bivar Weinho Osorio, J. P. Menezes Falcão - Attorney-at-law Main Energy - Manutenção e Slovak Chamber of Architects Attorney-at-law Sociedade de Advogados, RL Instalações Eléctricas, Lda. Leonardo Ponte Maria Sefcova Tatiana Simão Salvador Sobral Cumbre BPLD - Borges da Ponte, Linhares Marco Santos Slovak Chamber of Architects Attorney-at-law Alvim Cortes, Esperança, Vaz Dias & Associados, RL Tiago Ilharco Olga Miháliková Osorio, J. P. Menezes Falcão - Artur da Costa Bruno Paulo Linhares Dias NCREP - Consultoria em Slovak Chamber of Architects Sociedade de Advogados, RL Costa Bruno Lawyers BPLD - Borges da Ponte, Linhares Reabilitação do Edificado Isabel Catalão Dias & Associados, RL e Património, Lda. Tomáš Gardon EDP Distribuição - Energia, S.A. Attorney-at-law Slovak Chamber of Notaries Victor Borges da Ponte Paulo Teixeira Maria José Palma Santos Miguel Almeida BPLD - Borges da Ponte, Linhares Paulo Teixeira - Solicitador Tomáš Trella Enforcement Agent AXONOMETRICA Dias & Associados, RL Slovak Chamber of Notaries Catarina Borges da Ponte HXI Engenharia, Unipessoal Lda. Carlos de Matos Carlos Martins Plataforma Legal, ACE Peter Škutil CARLOS DE MATOS Electricidade dos Açores (EDA) TESLA Group, a.s. Carlos Alves Maria Santa Martha LINEA - Atelier de Arquitectura, Paulo Miguel Fernandes Paulo Bermonte PLMJ Advogados, SP, RL Engenharia e Gestão, Lda. Cónica Electricidade dos Açores (EDA) KOSICE Tomas Pessanha PLMJ Advogados, SP, RL Anton Reitzner Luis Miguel Amaral ECBUILD - Engenharia, Beatriz Tavares do Canto 3linea spol., s.r.o. Luis Miguel Amaral - Advogados Construção e Projecto, Lda. Enforcement Agent Joana Brandão PLMJ Advogados, SP, RL Viliam Augustínsky Carmen Rosa Armando Palavras Fernando Abreu AB-EL, s.r.o PLMJ Advogados, SP, RL EDP Distribuição - Energia, S.A. Gabinete 118-Gestão de Obras e Projectos Lda (São Pedro) David Pinto Promotop – Empreendimentos Alexander Bröstl António Morgado André Vítor Coropos Imobiliários, Lda. Advokátska kancelária PROTECNA EDP Distribuição - Energia, S.A. Manuel Pereira Leite Bröstl & Čentík, s.r.o. LCCA Advogados SOL E LUZ - Sociedade Rui Simão Manuel Marques Sistelmar - Sociedade de Tomáš Čentík de Construções, Lda. Enforcement Agent Paulo Macedo Construções, S.A. Advokátska kancelária Macedo Arquitectos Sotécnica - Sociedade Bröstl & Čentík, s.r.o. João Freitas Fernandes Electrotécnica, S.A. Freitas Fernandes - Consultores de Rosa Ponte Sotécnica - Sociedade Electrotécnica, S.A. Martin Vasiľ Gestão e Projectos Imobiliários, Lda. Ponte, Medeiros & Associados, Nelson Silva Advokátska kancelária Vasiľ, Sociedade de Advogados, RL Tecnonexe - Arquitetura Rui Sousa Marques Šimonovič & Partners, s.r.o. Sofia Martins e Engenharia Civil Miranda & Associados Carlos Mosca Rodrigues Sousa Marques Engenharia Unipessoal, Lda. Peter Murko Mosca e Associados, Sociedade Rui Mascarenhas Cassovar Business Center, a.s. Joana Galvão Teles de Advogados, RL VILAMOURA XXI Morais Leitão, Galvão Teles, Gian Volpi VOLARE - Gestão de Peter Jacko Soares da Silva & Associados Privel spol., s.r.o. Projectos, S.A. 180 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Vojtech Kavečanský Slovak Chamber of Notaries Eduard Szattler Vojčík & Partners, s.r.o. Leo Teodor Vojčík Vojčík & Partners, s.r.o. Miroslav Šípoš Východoslovenská distribučná, a.s. Vladimír Jakub Východoslovenská vodárenská spoločnosť, a.s. PRESOV Peter Rak Advokátska kancelária Peter Rak, s.r.o. Štefan Mitro DESIGN PO, s.r.o. Kamil Kocian Electrical contractor Vladimír Milas JUDr. Vladimír Milas, advokát Patrik Palša Palša a Partneri Advokátska kancelária spol. s.r.o. Ivana Čuchtová Slovak Chamber of Notaries TRNAVA Igor Crhoň Bailiff Office Patrik Harant Cable System, s.r.o. Lucia Kubálová Pacalaj, Palla a Partneri, s.r.o. Juraj Novák Slovak Chamber of Notaries Barbora Blahová Trnavská vodárenská spoločnosť, a.s. ZILINA Branislav Samec Advokátska kancelária JUDr. Branislav Samec Martin Samec Advokátska kancelária JUDr. Branislav Samec Ján Horník Fispro, a.s. Róbert Hronček Hronček & Partners, s.r.o. Július Vršanský Project Designer Marek Dubeň Project Designer Katarína Lisková SEVAK, a.s. Miroslav Hamacek SEVAK, a.s. Ľubica Joneková Slovak Chamber of Notaries Stredoslovenská distribučná, a.s. ACKNOWLEDGMENTS 181 PUBLIC SECTOR Kristina Ljubek City Hall Lucie Mezníková Municipality, Private Adéla Koudelová Municipality, Strategic Development Galina Pecková Municipality, Trade Licensing Office CONTRIBUTORS Sector Specialist Department and Marketing Stjepan Slunjski Josef Růžička City Hall Jitka Jarská Vladimír Janša Regional Court CROATIA Tax Authority Regional Court Jasna Lekić Petr Cech OSIJEK Commerical Court of Varazdin Zdeněk Handl Michal Kasina Regional Court Tax Authority Tax Authority Damir Feher Ksenija Flack Makitan City Hall Commerical Court of Varazdin LIBEREC PLZEN Gordana Njari Alan Pretković PORTUGAL Commercial Court of Osijek Municipal Court of Varazdin Eva Bartáková Ludmila Šiková Cadaster Office Cadaster Office BRAGA Dubravka Biterski Dario Niseteo Financial Agency (FINA) Jana Lauermanová Petr Chvojka Ana Maria Bárbara Municipal Court of Varazdin Cadaster Office Member of the City Council Agere - Empresa de Águas, Marija Pezelj Robert Hunjak Efluentes e Resíduos de Braga, EM Financial Agency (FINA) Municipal Court of Varazdin Vladimíra Hykysová Jiří Špak Cadaster Office Municipality Laura Sofia Vieira Berislav Tonkovac Rankica Benc Agere - Empresa de Águas, HEP ODS d.o.o. Public Notary Pavel Preisler Michaela Vaníková Efluentes e Resíduos de Braga, EM Elektroslavonija Osijek District Court Municipality Ivana Galović Avelino Quelhas Costa Darko Lesar Tax Administration of Varazdin Miroslav Šimek Petr Triner Autoridade Tributária Municipal Court of Osijek Municipality, Building Office Municipality Câmara Municipal de Braga Boris Vuković Petr Neuhäuser František Kurka ZAGREB Public Notary Municipality, Mayor’s Office Municipality, Infrastructure Maja Josipovic Management COIMBRA Vedran Borić Commercial Court of Zagreb AC, Águas de Coimbra, Public Notary Mirjana Borić OLOMOUC Michal Červenka E.M. - Serviço Comercial Marica Pavic Municipality, Legal Section County of Zagreb Blanka Burešová Cadaster Office Paula Cristina Jacinto da Serra RIJEKA Leitão Iva Bendak PRAGUE Ljiljana Buljan Financial Agency (FINA) Marie Körnerová Autoridade Tributária City Hall Cadaster Office Jana Király Marija Pezelj Cadaster Office Câmara Municipal de Coimbra Lena Rakipov Financial Agency (FINA) Aleš Jakubec Commercial Court of Rijeka Municipality Alena Novotná Maria Nazaré Correia Batista Blanka Pavleković District Court Prague 1 Conservatória do Registo Comercial Tina Ružić Škrobonja Ministry of Justice Jiří Doležel Commercial Court of Rijeka Municipality, Development Pavel Cirek Elisabete Alves Erika Kaloćira Reljić Department Energy Regulatory Office Juízo Central Cível de Coimbra Koraljka Vahtar Jurkovic Ministry of Justice County of Rijeka Dušan Struna Petr Kusy Carmencita Quadrado Ivica Anoković Municipality, Trade License Office Energy Regulatory Office Juízo de Comércio de Coimbra Marija Pezelj Ministry of Justice Financial Agency (FINA) Zuzana Rusková Rene Nedela Jasminka Aličić Municipality, Trade License Office Energy Regulatory Office EVORA Sonja Ježić Kardum Ministry of Justice Hilário Estevão C. Modas Financial Agency (FINA) Jan Breburda David Žákovec Autoridade Tributária Martina Vrdoljak Tax Authority Financial Administration, Arnold Marot Ministry of Justice Department of Tax Processes Maria do Amparo Plancha Municipal Court of Rijeka Oldřich Buigl Autoridade Tributária Mirela Fučkar Tax Authority Václav Čepelák Mirela Popović Brletić Ministry of Justice Financial Administration, Elsa Carvalho Municipal Court of Rijeka Department of Tax Processes Câmara Municipal de Évora Petra Jurina OSTRAVA Helena Keler Ministry of Justice Ondřej Menoušek Joaquim Costa Jiří Kozelský Tax Administration Rijeka Ministry of Interior,Department Câmara Municipal de Building Regulations and Ana Santini of Public Administration Évora - Departamento de Offences Department Municipal Court of Zagreb and e-Government Serviços Operacionais SPLIT Lenka Stará Enija Kalinic Lana Putrić Martin Churavý Nuno Feijão Cadaster Office City of Split Municipal Court of Zagreb Municipality, Protocol Câmara Municipal de and Foreign Relations Évora - Departamento de Marcela Staniczková Marija Pezelj Nemanja Bačić Cadaster Office Serviços Operacionais Municipal Court of Zagreb Alois Bláha Financial Agency (FINA) Tomáš Havelek Municipality, Strategic Câmara Municipal de Željka Marić Nenad Kunc District Court and Business Support Évora - Gabinete de Apoio Financial Agency (FINA) Municipal Court of Zagreb à Presidência e Vereação Martin Pliska Jan Zeman Amadeo Senko Nikola Vučić Fire Department Municipality, Strategic Municipal Court of Split State Geodetic Administration and Business Support FARO Pavel Kudrna Dijana Nenadić Irena Hojdnová Ana Maria Martins Silvestre Ministry of Finance Municipal Court of Split State Administration of Land Autoridade Tributária Brětislav Gibas Surveying and Cadastre Tomislav Ivanda CZECH REPUBLIC Câmara Municipal de Faro Municipality Municipal Court of Split Conservatória do Registo Comercial BRNO Pavlína Sýkorová USTI NAD LABEM Ana Marinović Marie Suchánková Municipality, Legal Section Jiří Jindřich FAGAR : Faro, Gestão de águas Tax Administration Split Cadaster Office Cadaster Office e Resíduos - Serviço Comercial Ladislav Rožnai Ivana Bezjak Terezie Tenorová Municipality, Property Department Ladislav Vaško Tax Administration Split Cadaster Office District Court Marie Kučinská FUNCHAL Jaroslav Káčer Municipality, Property Department Barbora Džuganová Fernando Silva VARAZDIN Deputy Mayor Municipality, Strategic Development Direção Regional da Václav Palička Economia e Transportes Damir Mikulic Jakub Rybář Municipality, Strategic City Hall Michal Končal Municipality, Cooperation Development Department Municipality, Strategic Development Câmara Municipal de Funchal and Development 182 DOING BUSINESS IN THE EUROPEAN UNION 2018: CROATIA, THE CZECH REPUBLIC, PORTUGAL AND SLOVAKIA Rita Gouveia Caldeira Brito Diogo Pinto Mota Ingrid Konrad Tatiana Miščíková Marta Kováčiková Conservatória do Registo Comercial Águas do Porto, E.M. Municipality, Chief Architect Office Regional Public Health Office Regional Public Health Office Luisa Clode Ana Raquel Vitorino Portela Milan Galanda Andrea Slaninková Lucia Stoláriková IRN, I.P. Autoridade Tributária Municipality, Office of the Mayor Trade Section of the District Office Trade License Department of the Ministry of Interior Luís Mário Medeiros Silva Stanislav Duba Gabriela Eliašová LISBON Autoridade Tributária Regional Public Health Office Trade Section of the District Office Mária Mikolášiková Trade License Department of Ana Quintela Manuela Bernardes Štefan Palka Stanislav Baňas the Ministry of Interior Autoridade Tributária Câmara Municipal do Porto Regulatory Office for Trade Section of the District Office Network Industries Gabriela Balážová Manuel Bandeira Câmara Municipal do Porto - Trade Section of the District Office Autoridade Tributária Departamento Municipal Zuzana Ďurovčíková TRNAVA de Gestão Urbanística Regulatory Office for Maria Gabriela Pinto Gabriela Danišovičová Network Industries Autoridade Tributária Conservatoria do Registo Predial City Hall, Building Office Peter Višváder Sara Melão Iveta Miterková Social Insurance Company Autoridade Tributária City Hall, Building Office Zuzana Bankovichová Câmara Municipal de Oeiras SLOVAKIA Trade Section of the District Office Veronika Nekorancová District Court Ana Viriato Sommer Ribeiro BANSKA BYSTRICA Conservatória do Registo Comercial Igor Malý Iveta Grossová KOSICE District Court Isabel Maria Brochado Morais Financial Administration Mária Kottferová Conservatoria do Registo Department of Environment Vincent Szabó Predial de Pessoas Collectivas Marcela Hricová at District Office District Court Financial Administration Direção-Geral de Jana Miklusová Andrea Lukáčová Energia e Geologia District Court I Financial Administration BRATISLAVA Pedro Costa Juraj Komár Peter Holkovič Darina Farkašová Entidade Reguladora dos District Court I Financial Administration Bratislava Regional Court Serviços Energéticos (ERSE) Zlatica Besedová Ladislav Pándy Monika Švecová Carla Opinião Financial Administration Geodesy, Cartography and Bratislava Regional Court Instituto da Segurança Social, I.P. Cadastre Authority Barbora Slabeciusová Renáta Petruľáková Paulo Nunes Financial Administration Tomáš Guniš Department of Environment Instituto da Segurança Social, I.P. Municipality, Department of at District Office Štefan Halász Regional Development Carlos Manuel Colaço Ferreira Financial Administration Nina Járošiová Juízo Local Cível de Lisboa Tomáš Hauko Department of Environment at District Office Marta Karapová Regional Public Health Office Maria Julieta Lázaro Mendes Geodesy, Cartography and Moyano Marques Cadastre Authority Erika Štrbová Anna Kasajová SIMAS Oeiras - Diretora Trade Section of the District Office District Court I Departamento de Gestão Katarína Strmenská e Exploração de redes Marta Barková Regional Public Health Office Monika Gese District Court I Trade Section of the District Office Alena Vaisová PONTA DELGADA Viera Vicianová Trade Section of the District Office João Oliveira Carreiro District court I ZILINA Lenka Feketeová Autoridade Tributária Andrej Vidra Vladimír Sklenka Trade Section of the District Office Department of Environment Margarida Brito District Court I at District Office Soňa Homzová Câmara Municipal de Ponta Trade Section of the District Office Delgada - Departamento de Obras Adriana Bohunská Jaroslav Macek Municipais e Equipamentos Financial Administration District Court Maria da Graça Estrela Roque Katarína Švihranová PRESOV Martina Brniaková Costa Matos Financial Administration Štefan Tomašovský District Court Câmara Municipal de Ponta District Court Lucia Virsíková Peter Hrnčiar Delgada - Departamento de Financial Administration Katarína Lešková District Court Planeamento e Urbanismo Financial Administration Francisco Tomé de Andrade Matúš Fojtl Iveta Pernicová Geodesy, Cartography and Ľudmila Botková Financial Administration Direção Regional da Energia Cadastre Authority Financial Administration Espaço Registos Ponta Delgada Marcela Lacúchová Michal Valluš Mária Bednárová Financial Administration Marta Amaral Tavares Geodesy, Cartography and Financial Administration Inspeção Regional do Trabalho Cadastre Authority Miloš Fitoš Daniel Švirk Financial Administration Graça Cabral Marek Hroššo Geodesy, Cartography and Serviços Municipalizados de Health Inspection Commission Cadastre Authority Anna Štrengerová Águas e Saneamento (SMAS) Geodesy, Cartography and Luciana Malovcová Jozef Tuka Cadastre Authority Jorge Ferreira da Silva Nemésio Ministry of Justice Municipality, Building Office Serviços Municipalizados de Igor Liška Águas e Saneamento (SMAS) Martin Maliar Kristína Hakučová Municipality Ministry of Justice Municipality, Building Office Cátia Raposo Eva Kremeňová Serviços Municipalizados de Águas Ján Dancák Stanislav Tupta Municipality, Building Office e Saneamento (SMAS) - Secção Ministry of Transport Municipality, Environment and Construction and Transport Office Jakub Ulaher de Controlo e Qualidade Municipality, Department of Lukáš Jankovič Marta Dolhá Legal and Property Affairs Ministry of Transport Municipality, Office of the Mayor PORTO and Construction Gabriela Košecká Ana Paula Fontoura Martina Kolarčíková Regional Public Health Office Águas do Porto, E.M. 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