91714 Kuwait © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A copublication of The World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. 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ISBN: 978-0-8213-7960-8 E-ISBN: 978-0-8213-8630-9 DOI: 10.1596/978-0-8213-7960-8 ISSN: 1729-2638 Library of Congress Cataloging-in-Publication data has been applied for. Printed in the United States Current features News on the Doing Business project http://www.doingbusiness.org Rankings How economies rank-from 1 to 183 http://www.doingbusiness.org/rankings/ Contents Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004 Introduction and a ranking simulation tool and Aggregate Rankings http://www.doingbusiness.org/reforms/ 5 - Year Measure of Historical data Cumulative Change Customized data sets since DB2004 http://www.doingbusiness.org/custom-query/ Starting a Business Methodology and research Dealing with The methodologies and research papers underlying Doing Business Construction Permits http://www.doingbusiness.org/Methodology/ Registering Property Download reports Access to Doing Business reports as well as subnational and regional Getting Credit reports, reform case studies and customized country and regional profiles Protecting Investors http://www.doingbusiness.org/reports/ Paying Taxes Subnational and regional projects Differences in business regulations at the subnational and regional Trading Across Borders level http://www.doingbusiness.org/subnational-reports/ Enforcing Contracts Law Library Closing a Business Online collection of business laws and regulations relating to business and gender issues Doing Business 2011 http://www.doingbusiness.org/law-library/ Business Reforms http://wbl.worldbank.org/ Local partners More than 8,200 specialists in 183 economies who participate in Doing Business http://www.doingbusiness.org/Local-Partners/Doing-Business/ Business Planet Interactive map on the ease of doing business http://rru.worldbank.org/businessplanet Doing Business 2011 : Making a Difference for Entrepreneurs is the eighth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business’s life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The Doing Business methodology has limitations. Other areas important to business such as an economy ’s proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions, are not studied directly by Doing Business. To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following pages present the summary Doing Business indicators for Kuwait. The data used for this economy profile come from the Doing Business database and are summarized in graphs. These graphs allow a comparison of the economies in each region not only with one another but also with the “good practice” economy for each indicator. The good-practice economies are identified by their position in each indicator as well as their overall ranking and by their capacity to provide good examples of business regulation to other countries. These good -practice economies do not necessarily rank number 1 in the topic or indicator, but they are in the top 10. More information is available in the full report. Doing Business 2011 : Making a Difference for Entrepreneurs presents the indicators, analyzes their relationship with economic outcomes and recommends reforms. The data, along with information on ordering the report, are available on the Doing Business website (www.doingbusiness.org). * Except for the Paying Taxes indicator that refers to the period January to December of 2009. Note: 2008-2010 Doing Business data and rankings have been recalculated to reflect changes to the methodology and the addition of new economies (in the case of the rankings). 1 Economy Rankings - Ease of Doing Business Kuwait is ranked 74 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business. Kuwait - Compared to global good practice economy as well as selected economies: Kuwait's ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 74 Starting a Business 141 Dealing with Construction Permits 91 Registering Property 90 Getting Credit 89 Protecting Investors 28 Paying Taxes 9 Trading Across Borders 113 Enforcing Contracts 114 Closing a Business 61 2 Summary of Indicators - Kuwait Starting a Business Procedures (number) 13 Time (days) 35 Cost (% of income per capita) 1.3 Min. capital (% of income per capita) 82.7 Dealing with Construction Permits Procedures (number) 25 Time (days) 104 Cost (% of income per capita) 173.4 Registering Property Procedures (number) 8 Time (days) 55 Cost (% of property value) 0.5 Getting Credit Strength of legal rights index (0-10) 4 Depth of credit information index (0-6) 4 Public registry coverage (% of adults) 0.0 Private bureau coverage (% of adults) 29.6 Protecting Investors Extent of disclosure index (0-10) 7 Extent of director liability index (0-10) 7 Ease of shareholder suits index (0-10) 5 Strength of investor protection index (0-10) 6.3 Paying Taxes Payments (number per year) 15 Time (hours per year) 118 Profit tax (%) 4.7 Labor tax and contributions (%) 10.7 Other taxes (%) 0.0 Total tax rate (% profit) 15.5 Trading Across Borders Documents to export (number) 8 Time to export (days) 17 Cost to export (US$ per container) 1060 Documents to import (number) 10 Time to import (days) 19 Cost to import (US$ per container) 1217 3 Enforcing Contracts Procedures (number) 50 Time (days) 566 Cost (% of claim) 18.8 Closing a Business Recovery rate (cents on the dollar) 37.9 Time (years) 4.2 Cost (% of estate) 1 The 5 year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies from Doing Business 2006 to Doing Business 2011. Instead of highlighting which countries currently have the most business friendly environment, this new approach shows the extent to which an economy’s regulatory environment for business has changed compared with 5 years ago. This snapshot reflects all cumulative changes in an economy’s business regulation as measured by the Doing Business indicators-such as a reduction in the time to start a business thanks to a one-stop shop or an increase in the strength of investor protection index thanks to new stock exchange rules that tighten disclosure requirements for related -party transactions. This figure shows the distribution of cumulative change across the 9 indicators and time between Doing Business 2006 and Doing Business 2011 0.28 0.24 Doing 0.20 business has become easier (DB 0.16 change score) 0.12 0.08 0.04 0.00 Saudi Arabia Iran, Islamic Jordan Oman Kuwait Rep. 6 1. Benchmarking Starting a Business Regulations: Kuwait is ranked 141 overall for Starting a Business. Ranking of Kuwait in Starting a Business - Compared to good practice and selected economies: 7 The following table shows Starting a Business data for Kuwait compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of Min. capital (number) income per (% of income Economies capita) per capita) Denmark* 0.0 New Zealand* 1 1 0.0 Selected Economy Kuwait 13 35 1.3 82.7 Comparator Economies Bahrain 7 9 0.8 273.4 Iran, Islamic Rep. 6 8 4.0 0.8 Jordan 8 13 44.6 17.9 Oman 5 12 3.3 288.4 Qatar 8 12 9.7 79.8 Saudi Arabia 4 5 7.0 0.0 * The following economies are also good practice economies for : Procedures (number): Canada Cost (% of income per capita): Slovenia 8 2. Historical data: Starting a Business in Kuwait Starting a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 138 141 Procedures (number) 13 13 13 13 Time (days) 35 35 35 35 Cost (% of income per capita) 1.6 1.3 1.0 1.3 Min. capital (% of income per capita) 99.9 81.7 59.2 82.7 3. The following graphs illustrate the Starting a Business sub indicators in Kuwait over the past 4 years: 9 Starting a Business Summary - Kuwait This table summarizes the procedures and costs associated with setting up a business in Kuwait. STANDARDIZED COMPANY Legal Form: Limited Liability company (WLL) City: Kuwait City Registration Requirements: No: Procedure Time to complete Cost to complete 1 File with the Department of Partnerships (DOP) at the Ministry of 1 no charge Commerce (MOC) an application to set up the company 2 Pick a name for the company and file an application with the 1 no charge Commercial Register in this regard 3 Retrieve from the Department of Partnerships the notes addressed to 1 no charge the bank, the municipality, and the Criminal Investigation Department 4 Deposit the legally required initial capital in a bank and obtain deposit 1 no charge evidence 5 Procure extracts of the criminal record of the founding shareholders in 2 no charge preparation to the registration formalities with the Commercial Registry 6 The Municipality Inspects the company’s premises and issues a 7 no charge certificate 7 Obtain a memorandum of association form from the Department of 1 no charge Partnership 10 8 Sign and notarize the memorandum of association before a public 1 KWD 15 notary 9 Obtain from the Department of Partnerships a license to start activity 2 KWD 37 10 Register with the Commercial Registry 1 no charge 11 Register with the Kuwait Chamber of Commerce and Industry 1 KWD 65 12 Register with the Civil Data Department 15 KWD 5 13 * Open a company’s labor file at the Ministry of Labor and Social 15 no charge Affairs * Takes place simultaneously with another procedure. 11 Starting a Business Details - Kuwait Procedure 1 File with the Department of Partnerships (DOP) at the Ministry of Commerce (MOC) an application to set up the company Time to complete: 1 Cost to complete: no charge Comment: To set up the company, the founders must file an application with the Department of Partnerships (DOP) at the Ministry of Commerce and Industry (MOCI). The application form is obtained from the Companies’ Department at the Ministry.This application must indicate the name of the founding partners, the company capital, the percentage of ownership by each partner, the company business, the identity of company management, the company’s scope, duration and business objective. then MOCI stamps the application and give it a number then the director at DOP signs it. As for the submitted documents, these include the Company's Memorandum of Incorporation, certificate of incorporation, any required resolutions as per the company's Memorandum of Incorporation requested for the establishment of a new company and any additional documents that might be requested in light of the type and nationality of the Company. In addition, a certificate issued by the social security institution is requested from the Kuwaiti partners in order to verify that they are not civil servants. Procedure 2 Pick a name for the company and file an application with the Commercial Register in this regard Time to complete: 1 Cost to complete: no charge Comment: The founding shareholders must select a company name and file an application with the Commercial Register. If the name already exists or resembles an existing company name, the Commercial Register will inform the applicant and request an alternative name. Procedure 3 Retrieve from the Department of Partnerships the notes addressed to the bank, the municipality, and the Criminal Investigation Department Time to complete: 1 Cost to complete: no charge Comment: Upon successfully filing the application for company name with the Commercial Registrar and after having already filed the registration application with DOP, the applicant must go back to DOP to retrieve three notes issued by DOP and addressed to the bank, the Criminal Investigation Department, and the Kuwaiti municipality. Depending on the scope of the company’s activities, the Companies’ Department issues letters to the founders addressed to the relevant government agency: the municipality, Commercial Bank chosen by the founders for the deposit of the capital, and if the founders are individuals only, the Criminal Investigation Department. Depending on the scope of business, letters are issued in some cases to other governmental agencies or departments: for example, to the fire department for restaurants or cafes, to the Ministry of Health for food establishments, to the Ministry of Communication, to the Ministry of Oil and Energy for the oil industry, and so forth. Procedure 4 Deposit the legally required initial capital in a bank and obtain deposit evidence 12 Time to complete: 1 Cost to complete: no charge Comment: The note from DOP to the bank instructs it to accept the deposit of capital in an account opened in the company’s name. Once the capital is deposited, the bank issues a detailed bank statement on the amount deposited by each partner against his/her share in the company.. When credited to the account, the capital stays frozen in the account opened with the bank in the company name, and the founders cannot withdraw from the money deposited in the account until they submit the commercial license to the bank. Procedure 5 Procure extracts of the criminal record of the founding shareholders in preparation to the registration formalities with the Commercial Registry Time to complete: 2 Cost to complete: no charge Comment: The note addressed to the Criminal Investigation Department instructs it to check the criminal record of the partners, if individuals. The department issues a certificate attesting that the criminal record is clear of any crimes that would preclude an individual from becoming a company shareholder. Procedure 6 The Municipality Inspects the company’s premises and issues a certificate Time to complete: 7 Cost to complete: no charge Comment: The note from the DOP to the municipality instructs it to inspect the company premises to check whether they comply with health and safety regulations. The founders must submit a lease contract for the company’s premises to the municipality and the Fire Department as well as a receipt for the payment of the rent and a certificate from the Public Authority for Civil Information stating that the premises are registered with the Authority are also requested.The Fire Department inspects the premises to check for fire regulation compliance and then issues a document which is a fire department license in the name of the company before the issuance of the certificate from the municipality. This process usually takes 7 to 10 days. Eventually, the municipality issues a certificate indicating that the offices conform to regulations. Procedure 7 Obtain a memorandum of association form from the Department of Partnership Time to complete: 1 Cost to complete: no charge Comment: Procedure 8 Sign and notarize the memorandum of association before a public notary Time to complete: 1 Cost to complete: KWD 15 Comment: Upon receiving a standard memorandum of association from the DOP, the founding partners or their representatives must go to the Public Notary Department at the Ministry of Justice and sign and notarize the document before a notary public. The founders’ lawyer must amend the memorandum of association if the partners wish to make changes to the standard document. This additional step can take more than a day, depending on the lawyer and the number of changes. When the memorandum of incorporation is signed and notarized, the Ministry of Justice issues three copies, one for the Ministry of Commerce and the other two for the founders (even if there are more than two). 13 Procedure 9 Obtain from the Department of Partnerships a license to start activity Time to complete: 2 Cost to complete: KWD 37 Comment: After a public notary at the Ministry of Justice notarizes the memorandum of association, the applicant gives the Department of Partnerships at Ministry of Commerce a signed and notarized copy of the document, a copy of the lease contract for the company premises, and a receipt showing that the initial rent was paid. DOP issues the company a license to start activity. Procedure 10 Register with the Commercial Registry Time to complete: 1 Cost to complete: no charge Comment: The applicant registers the company with the Commercial Registry in person. Once the company is registered, the Registry issues a certificate indicating the registration date and number. Procedure 11 Register with the Kuwait Chamber of Commerce and Industry Time to complete: 1 Cost to complete: KWD 65 Comment: Once registered, the company must first certify a signature specimen for the company representative with the Kuwait Chamber of Commerce and Industry, which provides a special form for this purpose. The chamber will require this certified specimen in its dealings with other governmental bodies and entities such as the banks. To this end, the company must register as a Chamber of Industry and Commerce member. Procedure 12 Register with the Civil Data Department Time to complete: 15 Cost to complete: KWD 5 Comment: The company must register with the Public Authority for Civil Information' ("PACI") to obtain a “civil number,” which is required in dealings with other governmental bodies. Procedure 13 Open a company’s labor file at the Ministry of Labor and Social Affairs Time to complete: 15 Cost to complete: no charge Comment: The Ministry of Labor may inspect the premises to determine whether the premise size and the business scope are commensurate with the number of employees registered with the Ministry and to identify the number of non-national employees. 14 15 1. Benchmarking Dealing with Construction Permits Regulations: Kuwait is ranked 91 overall for Dealing with Construction Permits. Ranking of Kuwait in Dealing with Construction Permits - Compared to good practice and selected economies: 16 The following table shows Dealing with Construction Permits data for Kuwait compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) income per Economies capita) Denmark 6 Qatar 0.8 Singapore 25 Selected Economy Kuwait 25 104 173.4 Comparator Economies Bahrain 13 43 78.3 Iran, Islamic Rep. 17 322 382.3 Jordan 19 87 634.1 Oman 15 186 106.2 Qatar 19 76 0.8 Saudi Arabia 12 89 43.8 17 2. Historical data: Dealing with Construction Permits in Kuwait Dealing with Construction Permits data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 81 91 Procedures (number) 25 25 25 25 Time (days) 104 104 104 104 Cost (% of income per capita) 209.4 171.4 124.1 173.4 3. The following graphs illustrate the Dealing with Construction Permits sub indicators in Kuwait over the past 4 years: 18 Dealing with Construction Permits in Kuwait The table below summarizes the procedures, time, and costs to build a warehouse in Kuwait. BUILDING A WAREHOUSE City: Kuwait City Registration Requirements: No: Procedure Time to complete Cost to complete 1 Obtain a lot plan with site map from the municipality of Kuwait 3 days KWD 20 2 Obtain location clearances from the municipal authority 1 day KWD 130 3 Obtain project clearance from the Ministry of Commerce and Industry 3 days KWD 20 4 Obtain zoning approval from the municipal authority 8 days KWD 20 5 Submit building permit application to the municipal authority 1 day KWD 100 6 Obtain telephone plan approval from the Ministry of Communications 20 days KWD 1,500 7 * Receive electricity inspection by the Ministry of Energy, Electricity, and 1 day no charge Water 8 Obtain approval of electricity plans from the Ministry of Energy, 7 days KWD 4,000 Electricity, and Water 19 9 * Receive water inspection by the Ministry of Energy, Electricity, and Water 1 day no charge 10 Obtain water plan approval from the Ministry of Energy, Electricity, and 5 days KWD 3,000 Water 11 * Receive sewerage inspection by the Ministry of Energy, Electricity, and 1 day no charge Water 12 Obtain approval of sewerage plans from the Ministry of Energy, 14 days KWD 2,000 Electricity, and Water 13 Obtain a building permit 14 days KWD 150 14 Receive soil test inspection by the municipality 1 day no charge 15 Receive an interim construction inspection by the municipality 1 day no charge 16 Receive an on-site inspection by the municipality 1 day no charge 17 Obtain site take-over letter 20 days KWD 10 18 Obtain telephone connection 17 days KWD 250 19 * Obtain electricity connection 14 days KWD 3,000 20 * Obtain water connection 7 days KWD 750 21 * Obtain sewerage connection 7 days KWD 750 22 Prepare the file of cadastral measure of the structure 7 days KWD 10 23 Receive inspection by the Fire Department and obtain inspection 1 day KWD 5 certificate 24 Obtain certificate of fire and disaster safety from the Civil Defense 5 days no charge Department 25 Register the building with the real estate registry 1 day KWD 10 * Takes place simultaneously with another procedure. 20 Dealing with Construction Permits Details - Kuwait Procedure 1 Obtain a lot plan with site map from the municipality of Kuwait Time to complete: 3 days Cost to complete: KWD 20 Agency: Municipality of Kuwait Comment: Procedure 2 Obtain location clearances from the municipal authority Time to complete: 1 day Cost to complete: KWD 130 Agency: Municipality of Kuwait Comment: Procedure 3 Obtain project clearance from the Ministry of Commerce and Industry Time to complete: 3 days Cost to complete: KWD 20 Agency: Ministry of Commerce and Industry Comment: Procedure 4 Obtain zoning approval from the municipal authority Time to complete: 8 days Cost to complete: KWD 20 Agency: Municipality of Kuwait Comment: Procedure 5 Submit building permit application to the municipal authority Time to complete: 1 day Cost to complete: KWD 100 Agency: Municipality of Kuwait 21 Comment: Procedure 6 Obtain telephone plan approval from the Ministry of Communications Time to complete: 20 days Cost to complete: KWD 1,500 Agency: Ministry of Communications Comment: Procedure 7 Receive electricity inspection by the Ministry of Energy, Electricity, and Water Time to complete: 1 day Cost to complete: no charge Agency: Ministry of Energy, Electricity, and Water Comment: Procedure 8 Obtain approval of electricity plans from the Ministry of Energy, Electricity, and Water Time to complete: 7 days Cost to complete: KWD 4,000 Agency: Ministry of Energy, Electricity, and Water Comment: Procedure 9 Receive water inspection by the Ministry of Energy, Electricity, and Water Time to complete: 1 day Cost to complete: no charge Agency: Ministry of Energy, Electricity, and Water Comment: Procedure 10 Obtain water plan approval from the Ministry of Energy, Electricity, and Water Time to complete: 5 days Cost to complete: KWD 3,000 Agency: Ministry of Energy, Electricity, and Water 22 Comment: Procedure 11 Receive sewerage inspection by the Ministry of Energy, Electricity, and Water Time to complete: 1 day Cost to complete: no charge Agency: Ministry of Energy, Electricity, and Water Comment: Procedure 12 Obtain approval of sewerage plans from the Ministry of Energy, Electricity, and Water Time to complete: 14 days Cost to complete: KWD 2,000 Agency: Ministry of Energy, Electricity, and Water Comment: Procedure 13 Obtain a building permit Time to complete: 14 days Cost to complete: KWD 150 Agency: Municipality of Kuwait Comment: BuildCo must submit Application Form 1 for a building license and attach the following documents (including the documents described in the procedures above): - A copy of the deed of title to the land, allocation decree, or lease agreement. In the case of an allocation decree or lease agreement, a recent rent receipt should be submitted. - A copy of the architectural contract between BuildCo and an accredited engineering firm responsible for the architecture of the building, - Original letter of zoning opinion. - Third-party liability insurance policy (covering 2 or 3 years, depending on the time required to complete the building). - Original copies of plans or blueprints of the building from the engineering firm, including all details of the external facade, internal design, internal and external diameters, calculation of building area and space area around the building. - Original soil test report. - Approval from the Safety Department. - Approval from the Roads Department, if underground parking is included (which does not apply to the warehouse project). - Form 2, Undertaking of compliance of the plans with the buildings codes and cadastres, which should be signed and submitted (by an engineering firm). - Form 3, Undertaking of compliance with the construction plans, which should be signed and submitted (by an engineering firm). - Undertaking to provide specific plans (done by an engineering firm) that meet the requirements of -- The Ministry of Electricity and Energy for the electric supply. -- The Ministry of Public Works for the sewerage system. -- The Public Authority for Civil Aviation for the height of the warehouse. -- The Ministry of Communications for the telephone lines. Procedure 14 Receive soil test inspection by the municipality 23 Time to complete: 1 day Cost to complete: no charge Agency: Municipality of Kuwait Comment: Several inspections may take place during construction. The following inspections are conducted by the municipality or by a local consulting engineer who submits the information to the municipality: soil inspection; excavation work inspection; foundation work inspection; steel work for slabs inspection; frame inspection; damp-proof course inspection; drainage inspection; timber scaffolding inspection; environmental inspection; inspection of the building’s surroundings; final inspection. The concrete work inspection and inspection of the structure are conducted by the Construction Board. The labor inspection is conducted by the Labor Inspection Agency from the Ministry of Social Affairs and Labor. The fire inspection is conducted by the Fire Department. All these inspections may take place. However, on average, the warehouse would undergo 3 to 4 inspections per year. Therefore, only three inspections are included here as procedures. Procedure 15 Receive an interim construction inspection by the municipality Time to complete: 1 day Cost to complete: no charge Agency: Municipality of Kuwait Comment: Procedure 16 Receive an on-site inspection by the municipality Time to complete: 1 day Cost to complete: no charge Agency: Municipality of Kuwait Comment: The municipality inspects the buildings to ensure compliance with the drawings. Procedure 17 Obtain site take-over letter Time to complete: 20 days Cost to complete: KWD 10 Comment: BuildCo must submit an application for the site take-over letter and attach the following documents: - A copy of the construction license. - An undertaking from BuildCo that it shall carry out the construction work on the warehouse or, alternatively, that is has a construction contract with a contractor. In case of a construction contract with a contractor, a copy of the performance bond should be submitted. - An undertaking from an accredited supervising engineer to supervise the construction approved by the municipality. - Signature of the site take-over letter by BuildCo, the contractor (if any), and the municipality. Procedure 18 Obtain telephone connection 24 Time to complete: 17 days Cost to complete: KWD 250 Agency: Kuwait Telecom Comment: Procedure 19 Obtain electricity connection Time to complete: 14 days Cost to complete: KWD 3,000 Agency: Kuwait Electricity Company Comment: Procedure 20 Obtain water connection Time to complete: 7 days Cost to complete: KWD 750 Agency: Kuwait Water Company Comment: Procedure 21 Obtain sewerage connection Time to complete: 7 days Cost to complete: KWD 750 Agency: Kuwait Water Company Comment: Procedure 22 Prepare the file of cadastral measure of the structure Time to complete: 7 days Cost to complete: KWD 10 Comment: Procedure 23 Receive inspection by the Fire Department and obtain inspection certificate Time to complete: 1 day 25 Cost to complete: KWD 5 Agency: Fire Department Comment: Procedure 24 Obtain certificate of fire and disaster safety from the Civil Defense Department Time to complete: 5 days Cost to complete: no charge Agency: Civil Defense Department Comment: Procedure 25 Register the building with the real estate registry Time to complete: 1 day Cost to complete: KWD 10 Agency: Real Estate Registry Comment: 26 27 1. Benchmarking Registering Property Regulations: Kuwait is ranked 90 overall for Registering Property. Ranking of Kuwait in Registering Property - Compared to good practice and selected economies: 28 The following table shows Registering Property data for Kuwait compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) property Economies value) New Zealand* 2 Norway* 1 Saudi Arabia 0.0 Selected Economy Kuwait 8 55 0.5 Comparator Economies Bahrain 2 31 2.7 Iran, Islamic Rep. 9 36 10.5 Jordan 7 21 7.5 Oman 2 16 3.0 Qatar 10 16 0.3 Saudi Arabia 2 2 0.0 * The following economies are also good practice economies for : Procedures (number): United Arab Emirates Time (days): Saudi Arabia, Thailand, United Arab Emirates 29 2. Historical data: Registering Property in Kuwait Registering Property data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 87 90 Procedures (number) 8 8 8 8 Time (days) 55 55 55 55 Cost (% of property value) 0.5 0.5 0.5 0.5 3. The following graphs illustrate the Registering Property sub indicators in Kuwait over the past 4 years: 30 Registering Property in Kuwait This topic examines the steps, time, and cost involved in registering property in Kuwait. STANDARDIZED PROPERTY Property Value: 453,341.20 City: Kuwait City Registration Requirements: No: Procedure Time to complete Cost to complete 1 Apply for the Borders and Cadastral Sheet from the 1 day KWD 5 Municipality 2 * Inspection of the property by an architect 7-12 days KWD 10 representing the Municipality (simultaneous with procedures 3, 4, and 5) 3 * Obtain clearance from the Ministry of 1 day (simultaneous no charge Communications with procedures 2, 4, and 5) 4 * Obtain clearance from the Ministry of the Electricity 1 day (simultaneous no charge regarding outstanding electricity bills with procedures 2, 3, and 5) 5 * Obtain a certificate from the Minister of Commerce 1 day (simultaneous KWD 10-14 and Industry evidencing the signatory authority of the with procedures 2, 3, legal representative of the parties and 4) 31 6 File an application requesting a transfer of title with 15-25 days KWD 150 + 0.5% of the Contracts Control Department of the Real Estate property value (registration Registration Office of the Ministry of Justice fee) 7 Legal representative of the parties must appear in 3 days no cost person to sign the sale agreement before the notary public 8 The sale agreement is recorded under the name of the 20 days no cost buyer by the Contracts Control Department * Takes place simultaneously with another procedure. 32 Registering Property Details - Kuwait Procedure 1 Apply for the Borders and Cadastral Sheet from the Municipality Time to complete: 1 day Cost to complete: KWD 5 Agency: Municipality Comment: The seller must request a Borders and Cadastral Sheet from the Municipality providing the details of the property in question (i.e. its size, the developments on it, the zoning, etc) and confirming that the property is in compliance with all the Municipality regulations. This document is prepared following an inspection of the property by an architect of the Municipality. The documentation shall include: Application from the seller on the selling company's letterhead Copy of the deed of title of the property provided by the seller Documents proving the authority of the person submitting the application on behalf of the seller Procedure 2 Inspection of the property by an architect representing the Municipality Time to complete: 7-12 days (simultaneous with procedures 3, 4, and 5) Cost to complete: KWD 10 Agency: Municipality Comment: The Municipality will send out an inspector/architect to inspect the property in question and collect the relevant information; after which the Municipality will issue the Borders and Cadastral Sheet and transfer the same along with a letter of no objection to the transfer to the Ministry of Justice to continue the process of the property transfer. Procedure 3 Obtain clearance from the Ministry of Communications Time to complete: 1 day (simultaneous with procedures 2, 4, and 5) Cost to complete: no charge Agency: Ministry of Communications Comment: The Seller must obtain a clearance from the Ministry of Communications (necessary for all types of properties both commercial and residential). The clearance is to confirm that the previous owner/seller has settled all related utility bills. Procedure 4 Obtain clearance from the Ministry of the Electricity regarding outstanding electricity bills Time to complete: 1 day (simultaneous with procedures 2, 3, and 5) 33 Cost to complete: no charge Agency: Ministry of the Electricity Comment: Parties obtain a certificate of the Ministry of the Electricity that there are no outstanding electricity bills or other dues to the Ministry. Procedure 5 Obtain a certificate from the Minister of Commerce and Industry evidencing the signatory authority of the legal representative of the parties Time to complete: 1 day (simultaneous with procedures 2, 3, and 4) Cost to complete: KWD 10-14 Agency: Minister of Commerce and Industry Comment: Parties obtain a certificate from the Minister of Commerce and Industry evidencing the signatory authority of the legal representative of the parties who will sign the sale agreement, together with copies of their civil identification cards. They obtain Form I "Undertaking & Acknowledgement" and Form IX "Acknowledgement of the Representative" from the Department of Commercial Companies at the Ministry of Commerce and Industry, that must be submitted for registration in Procedure 6. Form I shows that the parties exist and have the power to conclude the sale/purchase transaction in accordance with their own Article of Association. Form IX confirms the authority of their representatives who follow up the procedures with the Department. Procedure 6 File an application requesting a transfer of title with the Contracts Control Department of the Real Estate Registration Office of the Ministry of Justice Time to complete: 15-25 days Cost to complete: KWD 150 + 0.5% of property value (registration fee) Agency: Real Estate Registration Office of the Ministry of Justice Comment: The seller must prepare an application requesting a transfer of title to be filed with the Contracts Control Department of the Real Estate Registration Office of the Ministry of Justice. The Contracts Control Department reviews the application and the attached documents internally (3-7 days). After reviewing the application, the Contracts Control Department will take an extra 17-28 days to check all the documentation and approve the transfer. If approved, the form of the sale agreement is transferred to the notarization department for review. Once approved, the same is printed on the official green papers used by the Ministry and becomes ready for signature. The 0.5% registration fee is paid to the Department of Real Estate Registration & Authentication (Ministry of Justice) upon the completion of the registration procedures, who approves the submitted documents before parties sign the notarized sale contract. The documentation shall include: a) Form of the sale agreement (available at the Real Estate Registration Office) b) Form I "Undertaking & Acknowledgement" signed by parties (obtained in Procedure 5) c) Form II "Immediate Sale Form" signed by parties (available at the Real Estate Registration Office) d) Form IX "Acknowledgement of the Representative" signed by parties (obtained in Procedure 5) e) Original deed of title of the property; f) A recent certificate from the Minister of Commerce and Industry evidencing the signatory power of the legal representative of the parties (obtained in Procedure 5). 34 g) Copies of the articles of association of both companies. h) If powers of attorneys are used, copies thereof must be attached i) Municipal certificate of no objection (obtained in Procedure 3) Procedure 7 Legal representative of the parties must appear in person to sign the sale agreement before the notary public Time to complete: 3 days Cost to complete: no cost Agency: Notary public of Ministry of justice Comment: The parties must appear in person or through their attorneys to sign the sale agreement before the notary public. The notary public verifies the contents of the written agreement (a form commonly prescribed by the Ministry of Justice), authenticates the required signatures, and satisfies all other related matters. The notary public is a governmental body in Kuwait providing public service and is part of the Ministry of Justice. Procedure 8 The sale agreement is recorded under the name of the buyer by the Contracts Control Department Time to complete: 20 days Cost to complete: no cost Agency: Contracts Control Department Comment: The notary public delivers the notarized sale agreement to the Contracts Control Department for it to be recorded under the name of the purchasing company. The sale agreement is used as the deed of title. An original of the sale agreement, proving title, is delivered to the buyer thereafter. 35 36 1. Benchmarking Getting Credit Regulations: Kuwait is ranked 89 overall for Getting Credit. Ranking of Kuwait in Getting Credit - Compared to good practice and selected economies: 37 The following table shows Getting Credit data for Kuwait compared to good practice and comparator economies: Good Practice Strength of Depth of Public Private legal rights credit registry bureau Economies index (0-10) information coverage (% coverage (% index (0-6) of adults) of adults) New Zealand* 100.0 Portugal 67.1 Singapore* 10 United Kingdom 6 Selected Economy Kuwait 4 4 0.0 29.6 Comparator Economies Bahrain 4 4 0.0 35.9 Iran, Islamic Rep. 4 4 22.7 4.5 Jordan 4 2 1.5 0.0 Oman 4 2 19.6 0.0 Qatar 3 2 0.1 0.0 Saudi Arabia 5 6 0.0 18.0 * The following economies are also good practice economies for : Strength of legal rights index (0-10): Hong Kong, China, Kenya, Kyrgyz Republic, Malaysia Private bureau coverage (% of adults): Argentina, Australia, Canada, Iceland, Ireland, Norway, Sweden, United Kingdom, United States 27 countries have the highest credit information index. 38 2. Historical data: Getting Credit in Kuwait Getting Credit data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 87 89 Strength of legal rights index (0-10) 4 4 4 4 Depth of credit information index (0-6) 4 4 4 4 Private bureau coverage (% of adults) 14.5 31.2 30.4 29.6 Public registry coverage (% of adults) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Getting Credit sub indicators in Kuwait over the past 4 years: 39 Getting Credit in Kuwait The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in Kuwait. Getting Credit Indicators (2010) Indicator Private credit Public credit Private bureau coverage (% of adults) 4 bureau registry Are data on both firms and individuals distributed? No No 0 Are both positive and negative data distributed? Yes No 1 Does the registry distribute credit information from retailers, trade Yes No 1 creditors or utility companies as well as financial institutions? Are more than 2 years of historical credit information distributed? Yes No 1 Is data on all loans below 1% of income per capita distributed? Yes No 1 Is it guaranteed by law that borrowers can inspect their data in the No No 0 largest credit registry? Coverage 29.6 0.0 Number of individuals 634,474 0 Number of firms 0 0 40 Strength of legal rights index (0-10) 4 Can any business use movable assets as collateral while keeping possession of the assets; and any financial Yes institution accept such assets as collateral ? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, No without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without Yes requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically to the products, No proceeds or replacements of the original assets ? Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations Yes and debts can be secured by stating a maximum amount rather than a specific amount between the parties ? Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the Yes grantor's name of a security right ? Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? No Do secured creditors have absolute priority to their collateral in bankruptcy procedures? No During reorganization, are secured creditors' claims exempt from an automatic stay on enforcement? No Does the law authorize parties to agree on out of court enforcement? No 41 42 1. Benchmarking Protecting Investors Regulations: Kuwait is ranked 28 overall for Protecting Investors. Ranking of Kuwait in Protecting Investors - Compared to good practice and selected economies: 43 The following table shows Protecting Investors data for Kuwait compared to good practice and comparator economies: Good Practice Strength of investor Economies protection index (0-10) New Zealand 9.7 Selected Economy Kuwait 6.3 Comparator Economies Bahrain 5.7 Iran, Islamic Rep. 3.0 Jordan 4.3 Oman 5.0 Qatar 5.0 Saudi Arabia 7.0 44 2. Historical data: Protecting Investors in Kuwait Protecting Investors data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 27 28 Strength of investor protection index (0-10) 6.3 6.3 6.3 6.3 3. The following graph illustrates the Protecting Investors index in Kuwait compared to best practice and selected Economies: 9.7 7.0 6.3 5.7 5.0 5.0 4.3 3.0 t ai n a nd an an ic ar ai bi uw ep m hr at ra m rd a K R sla al Q Ba O iA Jo Ze ,I . ud an ew Sa Ir N Note: The higher the score, the greater the investor protection. 45 Protecting Investors in Kuwait The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are calculated in Kuwait. Protecting Investors Data (2010) Indicator Extent of disclosure index (0-10) 7 1 What corporate body provides legally sufficient approval for the transaction? 2 Whether immediate disclosure of the transaction to the public and/or shareholders is required? 2 Whether disclosure of the transaction in published periodic filings (annual reports) is required? 2 Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? 0 Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) 7 2 Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes to the company? 0 Whether shareholders can hold the approving body (the CEO or board of directors) liable for the damage that the Buyer-Seller transaction causes to the company? 2 Whether a court can void the transaction upon a successful claim by a shareholder plaintiff? 1 Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff? 46 0 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? 1 Whether fines and imprisonment can be applied against Mr. James? 1 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company? Ease of shareholder suits index (0-10) 5 4 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? 0 Whether the plaintiff can directly question the defendant and witnesses during trial? 0 Whether the plaintiff can request categories of documents from the defendant without identifying specific ones? 0 Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the transaction? 1 Whether the level of proof required for civil suits is lower than that of criminal cases? 0 Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before filing suit? Strength of investor protection index (0-10) 6.3 47 48 1. Benchmarking Paying Taxes Regulations: Kuwait is ranked 9 overall for Paying Taxes. Ranking of Kuwait in Paying Taxes - Compared to good practice and selected economies: 49 The following table shows Paying Taxes data for Kuwait compared to good practice and comparator economies: Good Practice Payments Time (hours Total tax rate (number per per year) (% profit) Economies year) Maldives* 3 0 Timor-Leste 0.2 Selected Economy Kuwait 15 118 15.5 Comparator Economies Bahrain 25 36 15.0 Iran, Islamic Rep. 20 344 44.1 Jordan 26 101 31.2 Oman 14 62 21.6 Qatar 3 36 11.3 Saudi Arabia 14 79 14.5 * The following economies are also good practice economies for : Payments (number per year): Qatar 50 2. Historical data: Paying Taxes in Kuwait Paying Taxes data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 10 9 Total tax rate (% profit) 14.4 14.4 15.5 15.5 Payments (number per year) 14 14 15 15 Time (hours per year) 118 118 118 118 3. The following graphs illustrate the Paying Taxes sub indicators in Kuwait over the past 4 years: 51 Paying Taxes in Kuwait The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year in Kuwait, as well as measures of administrative burden in paying taxes. Tax or mandatory Payments Notes on Time Statutory tax Tax Totaltax rate Notes on contribution (number) Payments (hours) rate base (% profit) TTR Zakat 1 1.0% taxable profit 1.00 Contribution to the 1 48 1.0% taxable profit 1.00 Kuwait foundation for the advancement of sciences (KFAS) National Labor Support 1 2.5% taxable profit 2.60 tax Social security 12 70 11.0% gross salaries 10.70 contributions Totals 15 118 15.5 52 53 1. Benchmarking Trading Across Borders Regulations: Kuwait is ranked 113 overall for Trading Across Borders. Ranking of Kuwait in Trading Across Borders - Compared to good practice and selected economies: 54 The following table shows Trading Across Borders data for Kuwait compared to good practice and comparator economies: Good Practice Documents to Time to Cost to Documents to Time to Cost to export export (days) export (US$ import import (days) import (US$ Economies (number) per (number) per container) container) Denmark* 5 France 2 2 Malaysia 450 Singapore 4 439 Selected Economy Kuwait 8 17 1060 10 19 1217 Comparator Economies Bahrain 5 11 955 6 15 995 Iran, Islamic Rep. 7 25 1090 8 32 1735 Jordan 7 14 825 7 18 1335 Oman 9 14 766 9 17 890 Qatar 5 21 735 7 20 657 Saudi Arabia 5 13 580 5 17 686 * The following economies are also good practice economies for : Time to export (days): Estonia 55 2. Historical data: Trading Across Borders in Kuwait Trading Across Borders data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 112 113 Cost to export (US$ per container) 935 995 1060 1060 Cost to import (US$ per container) 935 1152 1217 1217 Documents to export (number) 8 8 8 8 Documents to import (number) 10 10 10 10 Time to export (days) 20 20 17 17 Time to import (days) 20 20 19 19 3. The following graphs illustrate the Trading Across Borders sub indicators in Kuwait over the past 4 years: 56 57 Trading Across Borders in Kuwait These tables list the procedures necessary to import and export a standardized cargo of goods in Kuwait. The documents required to export and import the goods are also shown. Nature of Export Procedures (2010) Duration (days) US$ Cost Documents preparation 8 520 Customs clearance and technical control 2 100 Ports and terminal handling 2 200 Inland transportation and handling 5 240 Totals 17 1060 Nature of Import Procedures (2010) Duration (days) US$ Cost Documents preparation 13 632 Customs clearance and technical control 2 145 Ports and terminal handling 3 200 Inland transportation and handling 1 240 Totals 19 1217 58 Documents for Export and Import Export Bill of lading Cargo release order Certificate of origin Commercial invoice Customs export declaration Export license Inspection report Packing list Import Bill of lading Cargo release order Certificate of origin Commercial invoice Consular invoice Customs import declaration Inspection report Packing list Technical standard/health certificate Terminal handling receipts 59 60 1. Benchmarking Enforcing Contracts Regulations: Kuwait is ranked 114 overall for Enforcing Contracts. Ranking of Kuwait in Enforcing Contracts - Compared to good practice and selected economies: 61 The following table shows Enforcing Contracts data for Kuwait compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) claim) Economies Bhutan 0.1 Ireland 20 Singapore 150 Selected Economy Kuwait 50 566 18.8 Comparator Economies Bahrain 48 635 14.7 Iran, Islamic Rep. 39 505 17.0 Jordan 38 689 31.2 Oman 51 598 13.5 Qatar 43 570 21.6 Saudi Arabia 43 635 27.5 62 2. Historical data: Enforcing Contracts in Kuwait Enforcing Contracts data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 113 114 Procedures (number) 50 50 50 50 Time (days) 566 566 566 566 Cost (% of claim) 18.8 18.8 18.8 18.8 3. The following graphs illustrate the Enforcing Contracts sub indicators in Kuwait over the past 4 years: 63 Enforcing Contracts in Kuwait This topic looks at the efficiency of contract enforcement in Kuwait. Nature of Procedure (2010) Indicator Procedures (number) 50 Time (days) 566 Filing and service 26.0 Trial and judgment 420.0 Enforcement of judgment 120.0 Cost (% of claim)* 18.80 Attorney cost (% of claim) 10.7 Court cost (% of claim) 2.6 Enforcement Cost (% of claim) 5.5 64 Court information: Kuwait City Court of First ("‫ الدائرة التجـارية‬- ‫)"المحكمة الكلية‬ Instance, Commercial Circuit * Claim assumed to be equivalent to 200% of income per capita. 65 66 1. Benchmarking Closing Business Regulations: Kuwait is ranked 61 overall for Closing a Business. Ranking of Kuwait in Closing Business - Compared to good practice and selected economies: 67 The following table shows Closing Business data for Kuwait compared to good practice and comparator economies: Good Practice Recovery rate Time (years) Cost (% of (cents on the estate) Economies dollar) Ireland 0.4 Japan 92.7 Singapore* 1 Selected Economy Kuwait 37.9 4.2 1 Comparator Economies Bahrain 64.2 2.5 10 Iran, Islamic Rep. 23.1 4.5 9 Jordan 26.9 4.3 9 Oman 34.9 4.0 4 Qatar 53.0 2.8 22 Saudi Arabia 36.8 1.5 22 * The following economies are also good practice economies for : Cost (% of estate): Colombia, Kuwait, Norway 68 2. Historical data: Closing Business in Kuwait Closing a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 70 61 Time (years) 4.2 4.2 4.2 4.2 Cost (% of estate) 1 1 1 1 Recovery rate (cents on the dollar) 33.6 34.5 34.5 37.9 3. The following graphs illustrate the Closing Business sub indicators in Kuwait over the past 4 years: 69 Since 2004 Doing Business has been tracking reforms aimed at simplifying business regulations, strengthening property rights, opening access to credit and enforcing contracts by measuring their impact on 10 indicator sets . * Nearly 1,000 reforms have had an impact on these indicators. Doing Business 2011, covering June 2009 to June 2010, reports that 117 economies implemented 216 reforms to make it easier to start a business. 64% of economies measured by Doing Business have reformed this year, focusing on easing business start-up, lightening the tax burden, simplifying import and export regulations and improving credit information systems. The top 10 most-improved in Doing Business 2011 Dealing with Construction Trading Across Borders Positive Change Registering Property Enforcing Contracts Protecting Investors Starting a Business Closing a Business Negative Change Getting Credit Paying Taxes Permits Economy Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam * For Doing Business 2011 the Employing Workers indicator is not included in the aggregate ease of doing business ranking. 70 Summary of changes to business regulation in top 10 most improved economies in Doing Business 2011 and selected comparator economies. Bahrain Bahrain made registering property more burdensome by increasing the fees at the Survey and Land Registration Bureau. Bahrain made it easier to trade by building a modern new port, improving the electronic data interchange system and introducing risk-based inspections. Brunei Darussalam Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. The introduction of an electronic customs system in Brunei Darussalam made trading easier. Cape Verde Cape Verde made start-up easier by eliminating the need for a municipal inspection before a business begins operations and computerizing the system for delivering the municipal license. Cape Verde eased property registration by switching from fees based on a percentage of the property value to lower fixed rates. Cape Verde abolished the stamp duties on sales and checks. Grenada Grenada eased business start-up by transferring responsibility for the commercial registry from the courts to the civil administration. The appointment of a registrar focusing only on property cut the time needed to transfer property in Grenada by almost half. Grenada’s customs administration made trading faster by simplifying procedures, reducing inspections, improving staff training and enhancing communication with users. Hungary Hungary implemented a time limit for the issuance of building permits. Hungary reduced the property registration fee by 6% of the property value. Hungary simplified taxes and tax bases. Amendments to Hungary’s bankruptcy law encourage insolvent companies to consider reaching agreements with creditors out of court so as to avoid bankruptcy. Iran, Islamic Rep. The Islamic Republic of Iran eased business start-up by installing a web portal allowing entrepreneurs to search for and reserve a unique company name. The establishment of a new private credit bureau improved access to credit information. The Islamic Republic of Iran made enforcing contracts easier and faster by introducing electronic filing of some documents, text message notification and an electronic case management system. Jordan Jordan improved its credit information system by setting up a regulatory framework for establishing a private credit bureau as well as lowering the threshold for loans to be reported to the public credit registry. Jordan abolished certain taxes and made it possible to file income and sales tax returns electronically. Kazakhstan Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized. Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities. Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports. Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation. Peru Peru eased business start-up by simplifying the requirements for operating licenses and creating an online one-stop shop for business registration. Peru streamlined construction permitting by implementing administrative reforms. Peru introduced fast-track procedures at the land registry, cutting by half the time needed to register property. Peru made trading easier by implementing a new web-based electronic data interchange system, risk-based inspections and payment deferrals. Qatar Qatar made starting a business more difficult by adding a procedure to register for taxes and obtain a company seal. Rwanda Rwanda made dealing with construction permits easier by passing new building regulations at the end of April 2010 and implementing new time limits for the issuance of various permits. Rwanda enhanced access to credit by allowing borrowers the right to inspect their own credit report and mandating that loans of all sizes be reported to the central bank’s public credit registry. Rwanda reduced the number of trade documents required and enhanced its joint border management procedures with Uganda and other neighbors, leading to an improvement in the trade logistics environment. 71 Saudi Arabia Saudi Arabia made dealing with construction permits easier for the second year in a row by introducing a new, streamlined process. An amendment to Saudi Arabia’s commercial lien law enhanced access to credit by making secured lending more flexible and allowing out-of-court enforcement in case of default. Saudi Arabia reduced the time to import by launching a new container terminal at the Jeddah Islamic Port. Saudi Arabia speeded up the insolvency process by providing earlier access to amicable settlements and putting time limits on the settlements to encourage creditors to participate. Tajikistan Tajikistan made starting a business easier by creating a one-stop shop that consolidates registration with the state and the tax authority. Tajikistan strengthened investor protections by requiring greater corporate disclosure in the annual report and greater access to corporate information for minority investors. Tajikistan lowered its corporate income tax rate. Vietnam Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors. Zambia Zambia eased business start-up by eliminating the minimum capital requirement. Zambia eased trade by implementing a one-stop border post with Zimbabwe, launching web-based submission of customs declarations and introducing scanning machines at border posts. Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. 72 73