47717 DOING BUSINESS 2009 A copublication of the World Bank, the International Finance Corporation, and Palgrave Macmillan © 2008 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail feedback@worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A publication of the World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank 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. 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ISBN: 978-0-8213-7609-6 E-ISBN: 978-0-8213-7610-2 DOI: 10.1596/978-0-8213-7609-6 ISSN: 1729-2638 Library of Congress Cataloging-in-Publication data has been applied for. Contents Doing Business 2009 is the sixth in a property, getting credit, protecting inves- About Doing Business v series of annual reports investigating tors, paying taxes, trading across bor- Overview 1 the regulations that enhance business ders, enforcing contracts and closing a Starting a business 9 activity and those that constrain it. Doing business. Data in Doing Business 2009 are Dealing with construction permits 14 Business presents quantitative indicators current as of June 1, 2008. The indicators on business regulations and the protec- are used to analyze economic outcomes Employing workers 19 tion of property rights that can be com- and identify what reforms have worked, Registering property 24 pared across 181 economies--from Af- where and why. Getting credit 29 ghanistan to Zimbabwe--and over time. The methodology for the legal rights Protecting investors 34 Regulations affecting 10 stages of of lenders and borrowers, part of the get- Paying taxes 39 the life of a business are measured: start- ting credit indicators, changed for Doing Trading across borders 44 ing a business, dealing with construction Business 2009. See Data notes for details. Enforcing contracts 49 permits, employing workers, registering Closing a business 54 Current features Downloads News on the Doing Business project Doing Business reports as well as subnational, References 58 http://www.doingbusiness.org country and regional reports and case studies Data notes 61 Rankings http://www.doingbusiness.org/downloads Ease of doing business 79 How economies rank--from 1 to 181 Subnational projects Country tables 85 http://www.doingbusiness.org/ Differences in business regulations at the economyrankings subnational level ILO core labor standards 147 Reformers http://www.doingbusiness.org/subnational Short summaries of DB2009 reforms, lists Law library of reformers since DB2004 and a ranking Online collection of business laws and Acknowledgments 151 simulation tool regulations http://www.doingbusiness.org/reformers http://www.doingbusiness.org/lawlibrary Data time series Local partners Customized data sets since DB2004 More than 6,700 specialists in 181 economies http://www.doingbusiness.org/customquery who participate in Doing Business Methodology and research http://www.doingbusiness.org/LocalPartners The methodologies and research papers Reformers'Club underlying Doing Business Celebrating the top 10 Doing Business http://www.doingbusiness.org/ reformers MethodologySurveys http://www.reformersclub.org Blog Business Planet Online journal focusing on business Interactive map on the ease of doing business regulation reform http://www.doingbusiness.org/map http://blog.doingbusiness.org STARTING A BUSINESS v About Doing surveys. Such surveys are useful gauges regulation, such as stricter disclosure re- Business of economic and policy conditions. But quirements in related-party transactions. their reliance on perceptions and their Some give a higher score for a simplified incomplete coverage of poor countries way of implementing existing regulation, limit their usefulness for analysis. such as completing business start-up TheDoingBusinessproject,launched formalities in a one-stop shop. 7 years ago, goes one step further. It looks The Doing Business project encom- at domestic small and medium-size com- passes 2 types of data. The first come panies and measures the regulations ap- from readings of laws and regulations. plying to them through their life cycle. The second are time and motion indi- Doing Business and the standard cost cators that measure the efficiency in model initially developed and applied in achieving a regulatory goal (such as the Netherlands are, for the present, the granting the legal identity of a business). only standard tools used across a broad Within the time and motion indicators, range of jurisdictions to measure the cost estimates are recorded from official impact of government rule-making on fee schedules where applicable. Here, In 1664 William Petty, an adviser to business activity.1 Doing Business builds on Hernando de England's Charles II, compiled the first The first Doing Business report, pub- Soto's pioneering work in applying the known national accounts. He made 4 lished in 2003, covered 5 indicator sets in time and motion approach first used entries. On the expense side, "food, hous- 133 economies. This year's report covers by Frederick Taylor to revolutionize the ing, clothes and all other necessaries" 10 indicator sets in 181 economies. The production of the Model T Ford. De Soto were estimated at £40 million. National project has benefited from feedback from used the approach in the 1980s to show income was split among 3 sources: £8 governments, academics, practitioners the obstacles to setting up a garment fac- million from land, £7 million from other and reviewers.2 The initial goal remains: tory on the outskirts of Lima.3 personal estates and £25 million from to provide an objective basis for under- labor income. standing and improving the regulatory What Doing Business In later centuries estimates of coun- environment for business. does not cover try income, expenditure and material inputs and outputs became more abun- What Doing Business covers Just as important as knowing what Doing dant. But it was not until the 1940s that Business does is to know what it does a systematic framework was developed Doing Business provides a quantitative not do--to understand what limitations for measuring national income and ex- measure of regulations for starting a must be kept in mind in interpreting penditure, under the direction of British business, dealing with construction the data. economist John Maynard Keynes. As the permits, employing workers, register- methodology became an international ing property, getting credit, protecting Limited in scope standard, comparisons of countries' fi- investors, paying taxes, trading across Doing Business focuses on 10 topics, with nancial positions became possible. Today borders, enforcing contracts and closing the specific aim of measuring the regula- the macroeconomic indicators in na- a business--as they apply to domestic tion and red tape relevant to the life cycle tional accounts are standard in every small and medium-size enterprises. of a domestic small to medium-size firm. country. A fundamental premise of Doing Accordingly: Governments committed to the eco- Business is that economic activity re- · Doing Business does not measure all nomic health of their country and op- quires good rules. These include rules aspects of the business environment portunities for its citizens now focus on that establish and clarify property rights that matter to firms or investors--or more than macroeconomic conditions. andreducethecostsofresolvingdisputes, all factors that affect competitiveness. They also pay attention to the laws, regu- rules that increase the predictability of It does not, for example, measure lations and institutional arrangements economic interactions and rules that security, macroeconomic stability, that shape daily economic activity. provide contractual partners with core corruption, the labor skills of the Until very recently, however, there protections against abuse. The objective: population, the underlying strength were no globally available indicator sets regulations designed to be efficient, to be of institutions or the quality of for monitoring these microeconomic accessible to all who need to use them infrastructure.4 Nor does it focus factors and analyzing their relevance. and to be simple in their implementa- on regulations specific to foreign The first efforts, in the 1980s, drew on tion. Accordingly, some Doing Business investment. perceptions data from expert or business indicators give a higher score for more vi DoING BUSINESS 2009 · Doing Business does not cover all Business: expanding opportunities for other major economic benchmarks. The regulations, or all regulatory goals, entrepreneurship. Investors are encour- indicator set closest to Doing Business in any economy. As economies and aged to venture into business when po- in what it measures is the Organisation technology advance, more areas tential losses are limited to their capital for Economic Co-operation and Devel- of economic activity are being participation. opment's indicators of product market regulated. For example, the European regulation; the correlation here is 0.80. Union's body of laws (acquis) has Focused on the FormaL sector The World Economic Forum's Global now grown to no fewer than 14,500 In constructing the indicators, Doing Competitiveness Index and IMD's World rule sets. Doing Business measures Business assumes that entrepreneurs are Competitiveness Yearbook are broader in regulation affecting just 10 phases knowledgeable about all regulations in scope, but these too are strongly corre- of a company's life cycle, through 10 place and comply with them. In practice, lated with Doing Business (0.80 and 0.76, specific sets of indicators. entrepreneurs may spend considerable respectively). These correlations suggest time finding out where to go and what that where peace and macroeconomic Based on standardized case documents to submit. Or they may avoid stability are present, domestic business scenarios legally required procedures altogether-- regulation makes an important differ- Doing Business indicators are built on the by not registering for social security, for ence in economic competitiveness. basis of standardized case scenarios with example. A bigger question is whether the specific assumptions, such as the busi- Where regulation is particularly issues on which Doing Business focuses ness being located in the largest business onerous, levels of informality are higher. matter for development and poverty re- city of the economy. Economic indicators Informality comes at a cost: firms in duction. The World Bank study Voices of commonly make limiting assumptions the informal sector typically grow more the Poor asked 60,000 poor people around of this kind. Inflation statistics, for ex- slowly, have poorer access to credit and the world how they thought they might ample, are often based on prices of con- employ fewer workers--and their work- escape poverty.9 The answers were un- sumer goods in a few urban areas. ers remain outside the protections of equivocal: women and men alike pin their Such assumptions allow global cov- labor law.7 Doing Business measures one hopes on income from their own business erage and enhance comparability. But set of factors that help explain the oc- or wages earned in employment. Enabling they come at the expense of generality. currence of informality and give policy growth--and ensuring that poor people Business regulation and its enforcement makers insights into potential areas of can participate in its benefits--requires differ across an economy, particularly in reform. Gaining a fuller understanding an environment where new entrants with federal states and large economies. And of the broader business environment, drive and good ideas, regardless of their of course the challenges and opportuni- and a broader perspective on policy chal- gender or ethnic origin, can get started in ties of the largest business city--whether lenges, requires combining insights from business and where firms can invest and Mumbai or São Paulo, Nuku'alofa or Doing Business with data from other grow, generating more jobs. Nassau--vary greatly across econo- sources, such as the World Bank Enter- Small and medium-size enterprises mies. Recognizing governments' interest prise Surveys.8 are key drivers of competition, growth in such variation, Doing Business has and job creation, particularly in develop- complemented its global indicators with Why this focus ing countries. But in these economies up subnational studies in such economies as to 80% of economic activity takes place Brazil, China, Mexico, Nigeria, the Philip- Doing Business functions as a kind of in the informal sector. Firms may be pre- pines and the Russian Federation.5 Doing cholesterol test for the regulatory envi- vented from entering the formal sector Business has also begun a work program ronment for domestic businesses. A cho- by excessive bureaucracy and regulation. focusing on small island states.6 lesterol test does not tell us everything Where regulation is burdensome In areas where regulation is complex about the state of our health. But it does and competition limited, success tends and highly differentiated, the standard- measure something important for our to depend more on whom you know ized case used to construct the Doing health. And it puts us on watch to change than on what you can do. But where Business indicator needs to be carefully behaviors in ways that will improve not regulation is transparent, efficient and defined. Where relevant, the standard- only our cholesterol rating but also our implemented in a simple way, it becomes ized case assumes a limited liability overall health. easier for any aspiring entrepreneurs, company. This choice is in part empiri- One way to test whether Doing Busi- regardless of their connections, to oper- cal: private, limited liability companies ness serves as a proxy for the broader ate within the rule of law and to benefit are the most prevalent business form in business environment and for competi- from the opportunities and protections most economies around the world. The tiveness is to look at correlations be- that the law provides. choice also reflects one focus of Doing tween the Doing Business rankings and In this sense Doing Business values ABoUT DoING BUSINESS vii good rules as a key to social inclusion. It cut outdated ones. One finding of Doing vising its own. Many economies in Africa also provides a basis for studying effects Business: dynamic and growing econo- look to Mauritius--the region's strongest of regulations and their application. For mies continually reform and update their performer on Doing Business indicators-- example, Doing Business 2004 found that regulations and their way of implement- as a source of good practices for reform. faster contract enforcement was associ- ing them, while many poor economies In the words of Dr. Mahmoud Mohieldin, ated with perceptions of greater judicial still work with regulatory systems dating Egypt's minister of investment: fairness--suggesting that justice delayed to the late 1800s. is justice denied.10 Other examples are What I like about Doing Business... provided in the chapters that follow. Doing Business-- is that it creates a forum for exchanging a user's guide knowledge. It's no exaggeration when I Doing Business as say I checked the top 10 in every indica- a benchmarking exercise Quantitative data and benchmark- tor and we just asked them, "What did ing can be useful in stimulating debate you do?" If there is any advantage to Doing Business, in capturing some key about policy, both by exposing poten- starting late in anything, it's that you can dimensions of regulatory regimes, has tial challenges and by identifying where learn from others. been found useful for benchmarking. policy makers might look for lessons Any benchmarking--for individuals, and good practices. These data also pro- Over the past 6 years there has been firms or states--is necessarily partial: vide a basis for analyzing how different much activity by governments in re- it is valid and useful if it helps sharpen policy approaches--and different policy forming the regulatory environment for judgment, less so if it substitutes for reforms--contribute to desired out- domestic businesses. Most reforms relat- judgment. comes such as competitiveness, growth ing to Doing Business topics were nested Doing Business provides 2 takes on and greater employment and incomes. in broader programs of reform aimed at the data it collects: it presents "absolute" Six years of Doing Business data enhancing economic competitiveness. In indicators for each economy for each of have enabled a growing body of research structuring their reform programs, gov- the 10 regulatory topics it addresses, and on how performance on Doing Busi- ernments use multiple data sources and it provides rankings of economies, both ness indicators--and reforms relevant indicators. And reformers respond to by indicator and in aggregate. Judgment to those indicators--relate to desired many stakeholders and interest groups, is required in interpreting these mea- social and economic outcomes. Some all of whom bring important issues and sures for any economy and in determin- 325 articles have been published in peer- concerns into the reform debate. ing a sensible and politically feasible path reviewed academic journals, and about World Bank Group support to these for reform. 742 working papers are available through reform processes is designed to encour- Reviewing the Doing Business rank- Google Scholar.11 Among the findings: age critical use of the data, sharpening ings in isolation may show unexpected · Lower barriers to start-up are judgment and avoiding a narrow focus results. Some economies may rank un- associated with a smaller informal on improving Doing Business rankings. expectedly high on some indicators. And sector.12 some that have had rapid growth or · Lower costs of entry can encourage methodology and data attracted a great deal of investment may entrepreneurship and reduce rank lower than others that appear to be corruption.13 Doing Business covers 181 economies-- less dynamic. · Simpler start-up can translate including small economies and some Still, a higher ranking in Doing Busi- into greater employment of the poorest ones, for which little or ness tends to be associated with better opportunities.14 no data are available in other data sets. outcomes over time. Economies that rank How do governments use Doing The Doing Business data are based on among the top 20 are those with high Business? A common first reaction is domestic laws and regulations as well as per capita income and productivity and to doubt the quality and relevance of administrative requirements. (For a de- highly developed regulatory systems. the Doing Business data. Yet the debate tailed explanation of the Doing Business But for reform-minded govern- typically proceeds to a deeper discussion methodology, see Data notes.) ments, how much their indicators im- exploring the relevance of the data to the prove matters more than their absolute economy and areas where reform might InformatIon sources for the data ranking. As economies develop, they make sense. Most of the indicators are based on laws strengthen and add to regulations to Most reformers start out by seeking and regulations. In addition, most of the protect investor and property rights. examples, and Doing Business helps in cost indicators are backed by official fee Meanwhile, they find more efficient ways this. For example, Saudi Arabia used the schedules. Doing Business contributors to implement existing regulations and company law of France as a model for re- both fill out written surveys and provide viii DoING BUSINESS 2009 references to the relevant laws, regu- deveLopment oF the All changes in methodology are lations and fee schedules, aiding data methodoLogy explained in the report as well as on checking and quality assurance. The methodology for calculating each the Doing Business website. In addition, For some indicators part of the indicator is transparent, objective and data time series for each indicator and cost component (where fee schedules easily replicable. Leading academics col- economy are available on the website, are lacking) and the time component laborate in the development of the indi- beginning with the first year the indi- are based on actual practice rather than cators, ensuring academic rigor. Six of cator or economy was included in the the law on the books. This introduces a the background papers underlying the report. To provide a comparable time degree of subjectivity. The Doing Busi- indicators have been published in lead- series for research, the data set is back- ness approach has therefore been to work ing economic journals. Another 2 are at calculated to adjust for changes in meth- with legal practitioners or professionals an advanced stage of publication in such odology and any revisions in data due who regularly undertake the transac- journals. to corrections. The website also makes tions involved. Following the standard Doing Business uses a simple aver- available all original data sets used for methodological approach for time and aging approach for weighting subindica- background papers. motion studies, Doing Business breaks tors and calculating rankings. Other ap- Information on data corrections is down each process or transaction, such proaches were explored, including using provided on the website (also see Data as starting and legally operating a busi- principal components and unobserved notes). A transparent complaint pro- ness, into separate steps to ensure a bet- components.15 The principal components cedure allows anyone to challenge the ter estimate of time. The time estimate and unobserved components approaches data. If errors are confirmed after a data for each step is given by practitioners turn out to yield results nearly identical to verification process, they are expedi- with significant and routine experience those of simple averaging. The tests show tiously corrected. in the transaction. that each set of indicators provides new Over the past 6 years more than information. The simple averaging ap- notes 10,000 professionals in 181 economies proach is therefore robust to such tests. have assisted in providing the data that 1. The standard cost model is a quantita- inform the Doing Business indicators. Improvements to the tive methodology for determining the This year's report draws on the inputs of methodology and data revIsIons administrative burdens that regulation more than 6,700 professionals. The Doing The methodology has undergone contin- imposes on businesses. The method can be used to measure the effect of a single Business website indicates the number ual improvement over the years. Changes law or of selected areas of legislation or of respondents per economy and per have been made mainly in response to perform a baseline measurement of indicator (see table 12.1 in Data notes for to suggestions from economies in the all legislation in a country. the number of respondents per indicator Doing Business sample. For enforcing 2. In the past year this has included a re- set). Because of the focus on legal and contracts, for example, the amount of view by the World Bank Group Indepen- dent Evaluation Group (2008). regulatory arrangements, most of the the disputed claim in the case scenario 3. De Soto (2000). respondents are lawyers. The credit in- was increased from 50% to 200% of 4. The indicators related to trading across formation survey is answered by officials income per capita after the first year, as borders and dealing with construc- of the credit registry or bureau. Freight it became clear that smaller claims were tion permits take into account limited forwarders, accountants, architects and unlikely to go to court. aspects of an economy's infrastructure, other professionals answer the surveys Another change relates to starting a including the inland transport of goods and utility connections for businesses. related to trading across borders, taxes business. The minimum capital require- 5. http://www.doingbusiness.org/ and construction permits. ment can be an obstacle for potential subnational. The Doing Business approach to entrepreneurs. Initially, Doing Business 6. http://www.doingbusiness.org. data collection contrasts with that of measured the required minimum capital 7. Schneider (2005). perception surveys, which capture often regardless of whether it had to be paid 8. http://www.enterprisesurveys.org. one-time perceptions and experiences of up front or not. In many economies only 9. Narayan and others (2000). businesses. A corporate lawyer register- part of the minimum capital has to be 10. World Bank (2003). ing 100­150 businesses a year will be paid up front. To reflect the actual po- more familiar with the process than an tential barrier to entry, the paid-in mini- 11. http://scholar.google.com. entrepreneur, who will register a business mum capital has been used since 2004. 12. For example, Masatlioglu and Rigolini (2008), Kaplan, Piedra and Seira (2008) only once or maybe twice. A bankruptcy This year's report includes one and Djankov, Ganser, McLiesh, Ramalho judge deciding dozens of cases a year will change in the core methodology, to the and Shleifer (2008). have more insight into bankruptcy than a strength of legal rights index, which is company that may undergo the process. part of the getting credit indicator set. ABoUT DoING BUSINESS ix 13. For example, Alesina and others (2005), Perotti and Volpin (2004), Klapper, Laeven and Rajan (2006), Fisman and Sarria-Allende (2004), Antunes and Cav- alcanti (2007), Barseghyan (2008) and Djankov, Ganser, McLiesh, Ramalho and Shleifer (2008). 14. For example, Freund and Bolaky (forth- coming), Chang, Kaltani and Loayza (forthcoming) and Helpman, Melitz and Rubinstein (2008). 15. See Djankov and others (2005). STARTING A BUSINESS 1 Overview FIGURE 1.1 Which regions have some of the most business-friendly regulations? DB2009 ranking on the ease of doing business (1­181) EACH LINE SHOWS AVERAGE THE RANK OF ONE 1 RANK ECONOMY IN THE REGION 181 OECD high income 27 Eastern Europe & Central Asia 76 East Asia & Paci c 81 Middle East & North Africa 90 Latin America & Caribbean 92 South Asia 111 Sub-Saharan Africa 138 Source: Doing Business database. For the fifth year in a row Eastern Europe economies--Georgia, Estonia, Lithuania in 2007/08. New this year: reforms in the and Central Asia led the world in Doing and Latvia--are among the top 30 in the region are moving eastward as 4 new- Business reforms. Twenty-six of the re- overall Doing Business ranking. comers join the top 10 list of reformers: gion's 28 economies implemented a total Rankings on the ease of doing busi- Azerbaijan, Albania, the Kyrgyz Republic of 69 reforms. Since 2004 Doing Business ness do not tell the whole story about an and Belarus (table 1.1). has been tracking reforms aimed at sim- economy's business environment. The Many others reformed as well. plifying business regulations, strength- indicator does not account for all fac- Worldwide, 113 economies implemented ening property rights, opening up access tors important for doing business--for 239 reforms making it easier to do busi- to credit and enforcing contracts by mea- example, macroeconomic conditions, in- ness between June 2007 and June 2008. suring their impact on 10 indicator sets.1 frastructure, workforce skills or security. That is the most reforms recorded in Nearly 1,000 reforms with an impact But improvement in an economy's rank- a single year since the Doing Business on these indicators have been captured. ing does indicate that its government is project started. In the past year reform- Eastern Europe and Central Asia has ac- creating a regulatory environment more ers focused on easing business start-up, counted for a third of them. conducive to operating a business. In lightening the tax burden, simplifying The region surpassed East Asia Eastern Europe and Central Asia many import and export regulation and im- and Pacific in the average ease of doing economies continue to do so--and econ- proving credit information systems. business in 2007--and maintained its omies in the region once again dominate Across regions, East Asia had the place this year (figure 1.1). Four of its the list of top Doing Business reformers biggest pickup in the pace of reform. Table 1.1 The top 10 reformers in 2007/08 Dealing with Trading Starting a construction Employing Registering Getting Protecting Paying across Enforcing Closing a Economy business permits workers property credit investors taxes borders contracts business Azerbaijan 4 4 4 4 4 4 4 Albania 4 4 4 4 Kyrgyz Republic 4 4 4 Belarus 4 4 4 4 4 4 Senegal 4 4 4 Burkina Faso 4 4 4 4 Botswana 4 4 4 Colombia 4 4 4 4 4 Dominican Republic 4 4 4 4 Egypt 4 4 4 4 4 4 Note: Economies are ranked on the number and impact of reforms. First, Doing Business selects the economies that implemented reforms making it easier to do business in 3 or more of the Doing Business topics. Second, it ranks these economies on the increase in rank on the ease of doing business from the previous year. The larger the improvement, the higher the ranking as a reformer. Source: Doing Business database. 2 DoING BUSINESS 2009 FIGURE 1.2 Eastern European and Two-thirds of its economies reformed, personal profits. Central Asian economies-- up from less than half last year (figure Taxpayers in Azerbaijan now take leaders in Doing Business reforms 1.2). The Middle East and North Af- advantage of online filing and payment Share of economies with at least 1 reform rica continued its upward trend, with of taxes, saving more than 500 hours a making it easier to do business in past 5 years (%) two-thirds of its economies reforming. year on average in dealing with paper- by Doing Business report year In a region once known for prohibitive work. And a new economic court in Baku Eastern Europe & Central Asia entry barriers, 2 countries--Tunisia and helped speed contract enforcement. With (28 economies) Yemen--eliminated the minimum capi- the number of judges looking at com- DB2005 82 DB2006 93 tal requirement for starting a business, mercial cases increasing from 5 to 9, the DB2007 89 while Jordan reduced it from 30,000 average time to resolve a case declined DB2008 82 Jordanian dinars to 1,000. by 30 days. DB2009 93 Sub-Saharan Africa continued its Albania is the runner-up, with re- East Asia & Paci c upward trend in reform too: 28 econ- forms in 4 of the areas measured by (24 economies) omies implemented 58 reforms, more Doing Business. A new company law DB2005 38 than in any year since Doing Business strengthened the protection of minority DB2006 46 began tracking reforms. Two West Afri- shareholder rights. The law tightened DB2007 33 DB2008 46 can countries led the way, Senegal and approval and disclosure requirements DB2009 63 Burkina Faso. In Latin America, Colom- for related-party transactions and, for bia and the Dominican Republic were the the first time, defined directors' duties. Middle East & North Africa most active. OECD high-income econo- It also introduced greater remedies to (19 economies) DB2005 47 mies saw a slowdown in reform. So did pursue if a related-party transaction is DB2006 47 South Asia. harmful to the company. Albania made DB2007 53 Azerbaijan is the top reformer for start-up easier by taking commercial reg- DB2008 53 2007/08. A one-stop shop for business istration out of the court and creating a DB2009 63 start-up began operating in January 2008, one-stop shop. Companies can now start Sub-Saharan Africa halving the time, cost and number of a business in 8 days--it used to take (46 economies) procedures to start a business. Business more than a month. The country's first DB2005 22 registrations increased by 40% in the credit registry opened for business. And DB2006 30 DB2007 65 first 6 months. Amendments to the labor tax reforms halved the corporate income DB2008 52 code made employment regulation more tax rate to 10%. DB2009 61 flexible by allowing the use of fixed-term contracts for permanent tasks, easing AfricA--more reform thAn Latin America & Caribbean ever before (32 economies) restrictions on working hours and elimi- DB2005 25 nating the need for reassignment in case DB2006 50 of redundancy dismissals. And property Economies in Africa implemented more DB2007 56 transfers can now be completed in 11 Doing Business reforms in 2007/08 than DB2008 38 DB2009 50 days--down from 61 before--thanks to in any previous year covered. And 3 a unified property registry for land and of the top 10 reformers are African: 181 OECD high income real estate transactions. Senegal, Burkina Faso and Botswana. gal (24 economies) 149 That's not all. Azerbaijan eliminated Three postconflict countries--Liberia, RMS DB2005 75 DB2006 71 the minimum loan cutoff of $1,100 at the Rwanda and Sierra Leone--are reform- a DB2007 79 credit registry, more than doubling the ing fast too (figure 1.3). Mauritius, the 157 RMS DB2008 63 number of borrowers covered. Minor- country with the region's most favor- DB2009 50 Faso ity shareholders enjoy greater protec- able business regulations, continues to S South Asia tion, thanks to amendments to the civil reform, and this year joins the top 25 on (8 economies) code and a new regulation on related- the ease of doing business. ne DB2005 50 party transactions. Such transactions This focus on reform comes after DB2006 63 now are subject to stricter requirements several years of record economic growth DB2007 25 DB2008 63 for disclosure to the supervisory board in Africa. Annual growth has averaged DB2009 50 and in annual reports. Moreover, inter- nearly 6% in the past decade, thanks to ested parties involved in a related-party better macroeconomic conditions and transaction harmful to the company greater peace on the continent. With Source: Doing Business database. must cover the damages and pay back more economic opportunities, regulatory Latin America & Caribbean (32 economies) DB2005 25 ovERvIEw 3 DB2006 50 FIGURE 1.3 DB2007 Who reformed the most in Africa in 2007/08? DB2008 reform continues 56 38 Among Improvement in the ranking on the ease of doing business, DB2008­DB2009 DB2009 best performers 50 1 10 20 30 40 50 130 140 150 160 170 181 Singapore continues to rank at the top on OECD high income Rwanda Senegal (24 economies) 148 TO 139 168 TO 149 the ease of doing business, followed by 4 REFORMS 3 REFORMS New Zealand, the United States and Hong DB2005 75 DB2006 71 Madagascar Liberia Kong (China) (table 1.3). And reform DB2007 79 151 TO 144 167 TO 157 4 REFORMS 4 REFORMS DB2008 Mauritius Botswana continues. Five of the top 1063economies 29 TO 24 52 TO 38 implemented reforms that had an im- DB2009 50 3 REFORMS 3 REFORMS Burkina Faso 164 TO 148 4 REFORMS pact on the Doing Business indicators South Asia in 2007/08. Singapore further simplified (8 economies) Sierra Leone 163 TO 156 its online business start-up service. New DB2005 50 4 REFORMS Zealand introduced a single63online pro- DB2006 DB2007 25 Source: Doing Business database. cedure for business start-up,63lowered the DB2008 corporate income tax and implemented a DB2009 50 constraints on businesses have become eAsing entry--once AgAin new insolvency act. Hong Kong (China) morepressing.Governmentsincreasingly the most populAr reform streamlined construction permitting as focus on reducing these constraints. And Source: Doing Business database. part of a broader reform of its licens- reformers recognize that bringing more Making it easier to start a business contin- ing regime. Denmark implemented tax economic activity to the formal sector ued to be the most popular Doing Business reforms. And entrepreneurs in Toronto, through business and job creation is the reform in 2007/08. Forty-nine economies Canada, can now start a business with most promising way to reduce poverty.2 simplified start-up and reduced the cost just one procedure. Rwanda is one example of the divi- (figure 1.4). These are among the 115 This continuing reform is not sur- dends of peace and good macroeco- economies--more than half the world's prising. Many high-income economies nomic policies. The country has been total--that have reformed in this area over have institutionalized regulatory reform, among the most active reformers of the past 5 years. The second most popular setting up programs to systematically business regulation worldwide this de- were reforms to simplify taxes and their target red tape. Examples include the cade. In 2001 it introduced a new labor administration. Third were reforms to "Be the Smart Regulator" program in law as part of the national reconstruc- ease trade. In all 3 areas much can be Hong Kong (China), Simplex in Por- tion program. In 2002 it started prop- achieved with administrative reforms. tugal, the Better Regulation Executive erty titling reform. In 2004 reformers Reformsinotherareascanbeharder, in the United Kingdom, Actal in the simplified customs, improved the credit particularly if they require legal changes Netherlands and Kafka in Belgium. To registry and undertook court reforms. In or involve difficult political tradeoffs. identify priorities, these governments 2007 Rwanda continued with property Only 12 economies reformed their judi- routinely ask businesses what needs re- registration and customs. Some reforms cial system. Seven amended collateral or form. Belgium reformed business regis- took longer to implement. For example, secured transactions laws. Six amended tration after 2,600 businesses identified judicial reforms were initiated in 2001, labor regulations to make them more it as a major problem in 2003. Starting a but it was not until 2008 that the neces- flexible; 9 opted for more rigidity. business there used to take 7 procedures sary laws were passed and new commer- The 3 boldest reforms driving the and nearly 2 months. Today it takes 3 cial courts started functioning.3 biggest improvements in the Doing Busi- Most African reformers focused on ness indicators (table 1.2): Table 1.2 easing start-up and reducing the cost of ·Albania'sincreaseininvestor Top reformers in 2007/08 by indicator set importing and exporting. There is room protections Starting a business Yemen to do more. Entrepreneurs in Africa still Dealing with construction Kyrgyz Republic face greater regulatory and administra- ·Yemen'seasingofbusinessstart-up permits tive burdens, and less protection of prop- ·TheDominicanRepublic'staxreform. Employing workers Burkina Faso erty and investor rights, than entrepre- Registering property Belarus neurs in any other region. The upside: Getting credit Cambodia Protecting investors Albania reform in such circumstances can send Paying taxes Dominican Republic a strong signal of governments' commit- Trading across borders Senegal ment to sound institutions and policies, Enforcing contracts Mozambique catalyzing investor interest. Closing a business Poland Source: Doing Business database. 4 DoING BUSINESS 2009 FIGURE 1.4 239 reforms in 2007/08 made it easier to do business--26 made it more di cult 49 Albania Angola Azerbaijan Bangladesh Belarus Botswana Reforms Bulgaria making it Canada easier to Colombia do business Costa Rica Czech Republic Dominican Republic Egypt El Salvador Georgia Ghana 32 Greece Hungary Albania Italy Azerbaijan Jordan Belarus Kenya Cambodia Kyrgyz Republic Cameroon Lebanon Central African Republic Lesotho 24 Chad Liberia China Macedonia, former Azerbaijan Congo, Rep. Yugoslav Republic of Bangladesh Egypt Madagascar Belarus Equatorial Guinea Malaysia Bosnia and Herzegovina Finland Mauritania Burkina Faso Gabon Mauritius 18 Congo, Rep. Georgia Moldova Dominican Republic Guatemala Namibia Angola Egypt Indonesia New Zealand Armenia Georgia Kazakhstan Oman Belarus Hungary Liberia Panama Bosnia and Herzegovina Jamaica Macedonia, former Saudi Arabia Burkina Faso Kazakhstan Yugoslav Republic of Senegal Colombia Latvia Mauritius Sierra Leone Croatia Lithuania Moldova Singapore Egypt Macedonia, former Montenegro Slovakia Hong Kong, China Yugoslav Republic of Morocco Slovenia Jamaica Madagascar Sri Lanka South Africa Kyrgyz Republic 6 Mauritius Taiwan, China Syria Liberia Rwanda Tunisia Tonga Mauritania Argentina Saudi Arabia Ukraine Tunisia Portugal Azerbaijan Senegal United Arab Emirates Uruguay Rwanda Burkina Faso Serbia Uzbekistan West Bank and Gaza Sierra Leone Czech Republic Sierra Leone Vanuatu Yemen Singapore Mozambique Thailand Vietnam Zambia Tonga Slovenia Zambia West Bank and Gaza Starting Dealing with Employing Registering Getting a business construction permits workers property credit Indonesia Benin Cape Verde Reforms Switzerland Bulgaria China making it Fiji Fiji more di cult Montenegro The Gambia to do business Serbia Italy Tajikistan Kazakhstan Ukraine Korea West Bank and Gaza Sweden Zimbabwe United Kingdom Source: Doing Business database. ovERvIEw 5 36 Albania 34 Antigua and Barbuda Azerbaijan Belarus Belarus Benin Bosnia and Herzegovina Botswana Bulgaria Brazil Burkina Faso Colombia Canada Croatia China Djibouti Colombia Dominican Republic Côte d'Ivoire Ecuador Czech Republic Egypt Denmark El Salvador Dominican Republic Eritrea France France Georgia Haiti Germany Honduras Greece India Honduras Kenya Italy Korea 16 Macedonia, former Liberia Yugoslav Republic of Macedonia, former Bosnia and Herzegovina Madagascar Yugoslav Republic of Bulgaria Madagascar 12 12 Malaysia Cambodia Mexico Mali Armenia Colombia Albania Mongolia Mongolia Austria Czech Republic Azerbaijan Morocco Morocco Azerbaijan Finland Botswana Mozambique Nigeria Belgium Germany Egypt New Zealand Palau Bhutan Greece Greece Samoa Philippines Bulgaria Hong Kong, China Kyrgyz Republic South Africa Rwanda China Latvia Saudi Arabia St. Vincent and the Grenadines Senegal Macedonia, former Mexico Slovenia Thailand Sierra Leone Yugoslav Republic of New Zealand Tajikistan Tunisia Syria Mozambique Poland Thailand Ukraine Thailand Portugal Portugal Tunisia Uruguay Ukraine Romania Saudi Arabia Turkey Zambia Uruguay Rwanda St. Vincent and the Grenadines Protecting Paying Trading Enforcing Closing investors taxes across borders contracts a business Botswana Equatorial Guinea Bolivia Venezuela Gabon Tunisia 6 DoING BUSINESS 2009 Table 1.3 Rankings on the ease of doing business 2009 2008 2009 2008 2009 2008 RANK rank EConoMY RANK rank EConoMY RANK rank EConoMY 1 1 Singapore 62 53 Peru 122 120 India 2 2 new Zealand 63 62 Jamaica 123 119 Lesotho 3 3 United States 64 56 Samoa 124 122 Bhutan 4 4 Hong Kong, China 65 59 Italy 125 126 Brazil 5 5 Denmark 66 61 St. Vincent and the Grenadines 126 121 Micronesia 6 6 United Kingdom 67 63 St. Kitts and nevis 127 124 Tanzania 7 7 Ireland 68 99 Kyrgyz Republic 128 129 Morocco 8 8 Canada 69 68 Maldives 129 127 Indonesia 9 10 Australia 70 80 Kazakhstan 130 128 Gambia, The 10 9 norway 71 79 Macedonia, former Yugoslav 131 132 West Bank and Gaza 11 11 Iceland Republic of 132 130 Algeria 12 12 Japan 72 77 El Salvador 133 134 Honduras 13 19 Thailand 73 81 Tunisia 134 131 Malawi 14 13 Finland 74 70 Dominica 135 150 Cambodia 15 21 Georgia 75 65 Czech Republic 136 133 Ecuador 16 24 Saudi Arabia 76 72 Poland 137 140 Syria 17 14 Sweden 77 74 Pakistan 138 145 Uzbekistan 18 17 Bahrain 78 69 Belize 139 148 Rwanda 19 16 Belgium 79 75 Kiribati 140 136 Philippines 20 25 Malaysia 80 71 Trinidad and Tobago 141 139 Mozambique 21 15 Switzerland 81 76 Panama 142 138 Iran 22 18 Estonia 82 78 Kenya 143 137 Cape Verde 23 22 Korea 83 90 China 144 151 Madagascar 24 29 Mauritius 84 73 Grenada 145 144 Ukraine 25 20 Germany 85 115 Belarus 146 141 Suriname 26 27 netherlands 86 135 Albania 147 142 Sudan 27 23 Austria 87 82 Ghana 148 164 Burkina Faso 28 28 Lithuania 88 83 Brunei 149 168 Senegal 29 26 Latvia 89 85 Solomon Islands 150 149 Bolivia 30 30 Israel 90 84 Montenegro 151 143 Gabon 31 32 France 91 88 Palau 152 146 Iraq 32 35 South Africa 92 87 Vietnam 153 153 Djibouti 33 97 Azerbaijan 93 86 Marshall Islands 154 147 Haiti 34 33 St. Lucia 94 91 Serbia 155 152 Comoros 35 31 Puerto Rico 95 89 Papua new Guinea 156 163 Sierra Leone 36 37 Slovakia 96 106 Greece 157 167 Liberia 37 38 Qatar 97 110 Dominican Republic 158 154 Zimbabwe 38 52 Botswana 98 123 Yemen 159 156 Tajikistan 39 34 Fiji 99 98 Lebanon 160 166 Mauritania 40 36 Chile 100 101 Zambia 161 155 Côte d'Ivoire 41 50 Hungary 101 94 Jordan 162 161 Afghanistan 42 40 Antigua and Barbuda 102 103 Sri Lanka 163 159 Togo 43 39 Tonga 103 92 Moldova 164 158 Cameroon 44 41 Armenia 104 93 Seychelles 165 162 Lao PDR 45 44 Bulgaria 105 95 Guyana 166 160 Mali 46 54 United Arab Emirates 106 107 Croatia 167 165 Equatorial Guinea 47 47 Romania 107 96 nicaragua 168 169 Angola 48 43 Portugal 108 100 Swaziland 169 157 Benin 49 46 Spain 109 113 Uruguay 170 170 Timor-Leste 50 45 Luxembourg 110 104 Bangladesh 171 172 Guinea 51 48 namibia 111 105 Uganda 172 171 niger 52 49 Kuwait 112 116 Guatemala 173 173 Eritrea 53 66 Colombia 113 102 Argentina 174 175 Venezuela 54 64 Slovenia 114 125 Egypt 175 176 Chad 55 51 Bahamas, The 115 108 Paraguay 176 177 São Tomé and Principe 56 42 Mexico 116 109 Ethiopia 177 174 Burundi 57 57 oman 117 118 Costa Rica 178 178 Congo, Rep. 58 55 Mongolia 118 114 nigeria 179 179 Guinea-Bissau 59 60 Turkey 119 117 Bosnia and Herzegovina 180 180 Central African Republic 60 67 Vanuatu 120 112 Russian Federation 181 181 Congo, Dem. Rep. 61 58 Taiwan, China 121 111 nepal Note: The rankings for all economies are benchmarked to June 2008 and reported in the country tables. Rankings on the ease of doing business are the average of the economy's rankings on the 10 topics covered in Doing Business 2009. Last year's rankings are presented in italics. These are adjusted for changes in the methodology, data corrections and the addition of 3 new economies. Source: Doing Business database. ovERvIEw 7 procedures and 4 days. New business after years of conflict (Rwanda). has focused on strengthening investor registrations increased by 30% in 2 years. Many of the reformers started by protections through a new securities law In Portugal 86 of the 257 initiatives of the learning from others. Egypt looked to while continually reducing bureaucracy Simplex program came from discussions India for information technology solu- at the state level. with businesses. tions. Colombia took Ireland as an ex- Simplifying regulation helps busi- ample. As the country's trade minister, regulAtory reform-- nesses and governments alike. In Portu- Luis Guillermo Plata, put it, "It's not like whAt Are the benefits? gal the "on the spot" registration reform baking a cake where you follow the rec- saved entrepreneurs 230,000 days a year ipe. No. We are all different. But we can Of Egypt's estimated 25 million urban in waiting time.4 And the government take certain things, certain key lessons, properties, only 7% were formally regis- saves money. The United Kingdom es- and apply those lessons and see how they tered in 2005. Six months after reforms timated an annual administrative bur- work in our environment." of its property registry, title registration den for businesses of £13.7 billion in Several now serve as examples to increased and revenue rose by 39%.5 2005. Easing such burdens would allow others. The Azerbaijan reformers vis- After reforms of the property registry businesses to expand faster and generate ited Georgia and Latvia. Angola has re- in Tegucigalpa, Honduras, the registry savings that governments could use to quested legal and technical assistance received 65% more registration applica- enhance public services. based on the Portuguese model of busi- tions between July and December of ness start-up. 2007 than in the same period of 2006. five yeArs of Doing Business reform The most active reformers did not Similarly, a reduction in the mini- shy away from broad reform programs. mum capital requirement was followed Since 2005 Georgia has introduced a new by an increase in new company registra- The key to regulatory reform? Commit- company law and customs code, a new tions of 55% in Georgia and 81% in Saudi ment. For many economies the reforms property registry that replaced a confus- Arabia. Georgia now has 15 registered captured in Doing Business reflect a ing system requiring duplicate approvals businesses per 100 people--comparable broader, sustained commitment to im- by multiple agencies, the country's first to numbers in such economies as Malay- proving their competitiveness. Among credit information bureau and large-scale sia and Singapore. these systematic reformers: Azerbaijan, judicial reforms. Egypt has implemented Initial results like these show that Georgia and the former Yugoslav Repub- one-stop shops for import and export and reforms are leading to change on the lic of Macedonia in Eastern Europe and business start-up, undertaken sweeping ground. Confirming this are the find- Central Asia. France and Portugal among tax reforms, continually improved its ings of an increasing number of studies theOECDhigh-incomeeconomies.Egypt credit information systems and modi- using the Doing Business data to analyze and Saudi Arabia in the Middle East and fied the listing rules of the Cairo Stock the effect of regulatory burdens on such North Africa. India in South Asia. China Exchange. Colombia has strengthened outcomes as informality, job creation, and Vietnam in East Asia. Colombia, investor protections through stricter dis- productivity, economic growth and pov- Guatemala and Mexico in Latin America. closure rules, amended insolvency laws erty reduction.6 And Burkina Faso, Ghana, Mauritius, and reformed customs. And its one-stop Research generally finds that coun- Mozambique and Rwanda in Africa. shop for business start-up has served as tries with burdensome regulation have Each of these countries has reformed in an inspiration to others in the region. larger informal sectors, higher unem- at least 5 of the areas covered by Doing Among emerging market reform- ployment rates and slower economic Business, implementing up to 22 reforms ers, India has focused on technology, growth. More recent research gives first in one country over the past 5 years. implementing electronic registration of insights into the impact of reforms. One Several reformers were motivated by new businesses, an electronic collateral study reports some of the payoffs of growing competitive pressure related to registry and online submission of cus- reforms in Mexico: the number of regis- joining common markets or trade agree- toms forms and payments. China has tered businesses rose by nearly 6%, em- ments, such as the European Union (the focused on easing access to credit. In ployment increased by 2.6%, and prices former Yugoslav Republic of Macedonia) 2006 a new credit registry allowed more fell by 1% thanks to competition from or the U.S.­Central America Free Trade than 340 million citizens to have credit new entrants.7 Another study finds that Agreement (Guatemala). Others saw a histories for the first time. A new com- increasing the flexibility of labor regula- need to facilitate local entrepreneurship pany law lowered the minimum capital tions in India would reduce job informal- (Azerbaijan, Colombia, Egypt) or diver- requirement and strengthened investor ity in the retail sector by a third.8 sify their economy (Mauritius, Saudi protections. And in 2007 a new prop- But nothing says more than the Arabia). And others faced the daunting erty law expanded the range of assets experience of the people affected. Janet, task of reconstructing their economy that can be used as collateral. Mexico who runs a business producing baskets 8 DoING BUSINESS 2009 in Kigali, Rwanda, says, "I have sur- vivors, I have widows, I have women whose husbands are in prison. To see them sitting under one roof weaving and doing business together is a huge achievement . . . these women are now together earning an income."9 notes 1. Doing Business records only reforms relevant to the 10 indicator sets. Legal changes are counted once the respective legislation and implementing decrees, if applicable, are effective. Administrative reforms such as the introduction of time limits must be fully implemented. 2. Narayan and others (2000). 3. Hertveldt (2008). 4. Ramos (2008). 5. Haidar (2008). 6. The data on the regulation of entry, for example, have been used in 168 articles published in refereed journals and more than 200 research working papers. The data on the efficiency of court proceed- ings have been used in 54 articles and 86 working papers. Altogether, the data generated by the Doing Business project have been used in 325 published articles and 742 working papers. 7. Bruhn (2008). 8. Amin (forthcoming). 9. This example is from the World Bank's Doing Business: Women in Africa (2008a), a collection of case studies of African entrepreneurs. South Asia (8 economies) 6 Note: A r Source: D Note: A reform is counted as 1 reform per reforming economy per year. FIGURE STARTING A BUSINESS 9 overview Source: Doing Business database. Startin Starting a gets fa FIGURE 2.1 Top 10 reformers in starting a business Time and business Average improvement 2004 2007 Time (d Dealing with construction permits 46% 65% 54% 28% 1. Yemen 122 Employing workers 2. Slovenia Registering property 3. Senegal 4. Albania Getting credit 2008 5. Liberia Protecting investors 6. Azerbaijan Paying taxes 7. Syria Trading across borders 8. Hungary Enforcing contracts 9. Oman 0 Closing a business 10. Sierra Leone Cost (% of inc Procedures Time Cost Paid-in minimum capital 14.4 Source: Doing Business database. Julian started out working for her broth- numbers, different licenses from differ- July 2007. By May 2008 entrepreneurs had ers. But she was saving to start her own ent authorities, a declaration that had to registered3,060newfirms,80%morethan business. She began trading, traveling be made before a commissioner of oaths, in the previous year. Studies in Mexico, from Uganda to neighboring Kenya to a company seal to get, inspections of India, Brazil and the Russian Federation buy goods for resale. "I would take the my premises from municipal and health all conclude that simpler entry regimes 0 overnight bus and stand up the whole authorities. I remember paying a lawyer are associated with more new firms being way to get the 50% discount," she recalls. what seemed to me a gigantic fee of registered. The study in Mexico analyzes Source: D "My aim was to start a juice processing USh 500,000 [$279]."1 the effect of making it simpler to get a business, a real factory." Entrepreneurs like Julian now have municipal license, 1 of several procedures Once she had saved enough money, it easier. Reforms in Uganda and in many required to start a business. The finding: Julian began production. Unable to af- other economies have streamlined busi- easing business entry increased new start- ford transport, she had to take her prod- ness start-up in the past 5 years. Look at ups by about 4%.2 ucts by foot to the government chemist Azerbaijan. In 2004 its government set a Easier start-up is also correlated for testing. "My only means of transport preliminary time limit for the registra- with higher productivity among existing was my wheelbarrow, and I was the tion process. In 2005 it introduced a firms. A recent study, in an analysis of 97 whole company." silence-is-consent rule for tax registra- countries, finds that reducing entry costs Julian also remembers how arduous tion. A year later it further tightened the by 80% of income per capita increases it was to register her business. "There time limit for business registration. In total factor productivity by an estimated was so much to do and so many dif- 2007 it abolished the need for a company 22%. Analyzing 157 countries, it finds ferent places I had to go--for business seal. And in 2007/08 it set up a one-stop that the same reduction in entry costs registration and taxpayer identification shop. Starting a business used to take 122 raises output per worker by an estimated days. Now it takes only 16 (figure 2.3). FIGURE 2.6 Table 2.1 One-stop shops--same name, di erent results Where is it easy to start a business--and Formal incorporation of companies FIGURE 2.2 Rankings on starting a business Time and procedures to start a business where not? has several benefits. Legal entities out- are based on 4 subindicators Easiest RAnK Most difficult RAnK liveOne-stopfounders. Resources are often their Paraguay As % of income per Preregistration, new Zealand 1 Cameroon 172 pooled asshop shareholders join forces to capita, no bribes included registration and Belarus Canada 2 Djibouti 173 start a company. And companies have ac- postregistration Australia 3 Equatorial Guinea 174 Burkina Faso cess to services and institutions ranging 25% 25% Georgia 4 Iraq 175 from courts to commercial banks. Time Cost Morocco Ireland 5 Haiti 176 But many economies make starting Required United States 6 Guinea 177 additional 25% 25% Turkey and legally running a business as mea- Mauritius 7 Eritrea 178 procedures Procedures Paid-in United Kingdom 0 8 Togo 10 179 sured by Doing Business so30cumbersome 20 minimum Puerto Rico 9 Chad Time to start a business (days) 180 that entrepreneurs opt out and operate in Procedure is capital Source: Doing Business database. completed when Singapore 10 Guinea-Bissau 181 the informal sector. nal document Simpler entry encourages the cre- is received Funds deposited in a bank FIGURE 2.4 Note: Rankings are the average of the economy rankings on the or with a notary before Eastern Europe & Central Asia leads reforms, Africa runner-up procedures, time, cost and paid-in minimum capital for starting a ation of new companies. Take Senegal, registration business. See Data notes for details. Note: See Data notes for details. Source: Doing Business database. Number of reforms easing business start-up which reformed business registration in by Doing Business report year DB2005 DB2006 DB2007 DB2008 DB2009 FIGURE 2.5 Top 5 reform features Eastern Europe & Central Asia 52 in starting a business 7% Cut or simpli ed postregistration procedures 10 Note: A reform may include several reform features. DoING BUSINESS 2009 Source: Doing Business database. FIGURE 2.3 Starting a business in Azerbaijan oping innovative solutions to ease the capita). This is now gone, reduced to gets faster and cheaper entry of new firms into the market. As zero. That's not all. Yemen also activated Time and cost to start a business one company registrar put it, "At the end its one-stop shop, making it possible to 2004 2005 2006 2007 2008 of the day, we all have the same goal." complete all steps--from reserving the Time (days) Yet as Doing Business shows, com- company name to obtaining a license for pany registration is often only one piece incorporation to announcing the com- 122 of the puzzle. In many economies en- pany's formation--in a single location. 114 trepreneurs have to visit at least 7 agen- It made it easier to obtain a license from cies before they can get down to busi- the municipality and to register with the Time cut by 87% ness. The most efficient economies focus chamber of commerce and the tax office. 52 on creating a single interface between And it publicized the fact that a company 30 government and entrepreneur to take seal is not mandatory. The reforms re- 16 care of all necessary registrations and duced the number of procedures to start 0 notifications, mainly commercial and a business by 5, and the time by 50 days. Cost (% of income per capita) tax registration. Entrepreneurs in New Slovenia was the runner-up in busi- Zealand, for example, have to file all nec- ness start-up reforms. It simplified busi- 14.4 essary information only once--because ness registration by introducing a single 12.3 Cost cut agencies are linked through a unified access point, making company infor- by 77% 9.3 database. There is no minimum capital mation available online and eliminating requirement. And no judge has to ap- court fees and the requirement to reg- 6.9 prove the creation of a company. ister at the statistical office. The changes 3.2 reduced the procedures by 4, the time by who reformed in 2007/08? 41 days and the cost by 8.4% of income 0 per capita. Source: Doing Business database. In 2007/08, 49 economies made it easier Senegal is among the 14 econo- 29%.3 One reason for these large ef- to start a business--more reforms than mies that made Africa the leading region fects may be that reducing entry costs in any previous year (table 2.2). One in start-up reforms. Senegal's one-stop increases entry pressure, pushing firms highlight of the reforms: entrepreneurs shop became fully operational, merging with lower productivity out of the mar- in Canada and New Zealand can now 7 start-up procedures into 1. Start-up ket. Indeed, a study on business entry start a business with a single online time fell from 58 days to 8. Liberia too in Mexico finds that competition from procedure. streamlined business registration, cut- new entrants lowered prices by 1% and Yemen reformed business start-up ting 3 months from the time. Businesses reduced the income of incumbent busi- the most. In 2007 it had the second larg- can now start in less than 1 month. Libe- nesses by 3.5%.4 est minimum capital requirement in the ria also made the process more afford- Simpler and faster business entry world at $15,225 (2,003% of income per able, making the use of lawyers optional. makes it easier for workers and capital Table 2.2 to move across sectors when economies Simplifying registration formalities--the most popular reform feature in 2007/08 experience economic shocks. A recent study of 28 sectors in 55 countries com- Simplified other registration formalities Bangladesh, Botswana, Bulgaria, Costa Rica, (seal, publication, notary, inspection, El Salvador, Georgia, Ghana, Hungary, Kenya, Kyrgyz pares sectoral employment reallocation other requirements) Republic, Liberia, former Yugoslav Republic of in the 1980s and 1990s. The finding: real- Macedonia, Moldova, namibia, Saudi Arabia, Syria, Yemen location is smoother in countries where it takes fewer days to start a business.5 This Created or improved one-stop shop Albania, Angola, Azerbaijan, Belarus, Bulgaria, Czech Republic, Italy, Lebanon, Lesotho, former Yugoslav finding is confirmed by many studies on Republic of Macedonia, oman, Senegal, Slovakia, the effect of entry regulation in economies Slovenia, Yemen, Zambia opening their product markets to trade.6 Introduced or improved online Bulgaria, Canada, Colombia, Dominican Republic, The explanation is simple: with high fixed registration procedures Hungary, Italy, former Yugoslav Republic of Macedonia, Malaysia, Mauritius, new Zealand, costs of entry, firms cannot easily move Panama, Senegal, Singapore into the industries benefiting the most Abolished or reduced minimum capital Belarus, Egypt, El Salvador, Georgia, Greece, from trade openness. This friction re- requirement Hungary, Jordan, Tunisia, Uruguay, Yemen duces the value of greater openness. Cut or simplified postregistration procedures Colombia, Madagascar, Mauritania, Sierra Leone, Recognizing such benefits, econo- South Africa, Tonga, West Bank and Gaza mies around the world have been devel- Source: Doing Business database. STARTING A BUSINESS 11 The cost is a fourth of what it used to be. Table 2.3 Madagascar also focused on cost, abol- Who regulates business start-up the least--and who the most? ishing the professional tax. Procedures (number) Sierra Leone and South Africa Fewest Most made the use of lawyers optional. South Canada 1 Greece 15 Africa also introduced electronic means new Zealand 1 Montenegro 15 of certifying and publishing company Australia 2 Philippines 15 documents. In Botswana and Namibia Belgium 3 Venezuela 16 entrepreneurs now benefit from com- Finland 3 Guinea-Bissau 17 puterized registration systems. Zambia Georgia 3 Brazil 18 revamped the company registry and Sweden 3 Brunei 18 created a one-stop shop. So did Leso- Bulgaria 4 Uganda 18 tho, reducing start-up time by 33 days. Denmark 4 Chad 19 Singapore 4 Equatorial Guinea 20 Burkina Faso continued reforms at its one-stop shop, CEFORE. Ghana officially Time (days) eliminated the requirement for a com- Fastest Slowest pany seal. Angola, Kenya, Mauritania new Zealand 1 Lao PDR 103 and Mauritius also reformed. Australia 2 Brunei 116 Eastern Europe and Central Asia Georgia 3 Equatorial Guinea 136 saw reform in 10 economies. Six reduced Belgium 4 Venezuela 141 the running-around time for entrepre- Singapore 4 São Tomé and Principe 144 neurs by creating one-stop shops. Alba- Canada 5 Brazil 152 nia took registration out of the courts Hungary 5 Congo, Dem. Rep. 155 and merged company, social security, Iceland 5 Haiti 195 Denmark 6 Guinea-Bissau 233 labor and tax registrations. Before, en- Mauritius 6 Suriname 694 trepreneurs had to wait more than a month to start doing business; now it's Cost (% of income per capita) just 8 days. Azerbaijan's one-stop shop Least Most reduced delays by 2 weeks, Slovenia's by Denmark 0.0 Benin 196.0 6. Bulgaria, the Kyrgyz Republic and the Slovenia 0.1 Angola 196.8 former Yugoslav Republic of Macedonia Ireland 0.3 Djibouti 200.2 undertook reforms similar to Azerbai- new Zealand 0.4 Burundi 215.0 jan's. And while Czech entrepreneurs still Canada 0.5 Central African Republic 232.3 have to obtain multiple documents, the Bahrain 0.6 Togo 251.3 new "Project Czech Point" allows them Sweden 0.6 Gambia, The 254.9 United States 0.7 Guinea-Bissau 257.7 to do so at one place. Singapore 0.7 Zimbabwe 432.7 Belarus activated a unified registra- United Kingdom 0.8 Congo, Dem. Rep. 435.4 tion database and cut the minimum capi- tal requirement by half. Georgia elimi- Paid-in minimum capital nated the minimum capital requirement % of income Most per capita US$ altogether. It also cut the requirement Burkina Faso 459 1,973 for a company seal and made the use of oman 461 51,282 notaries optional. Moldova introduced 2 Guinea 477 1,907 new laws, on limited liability companies Central African Republic 514 1,953 and company registration, and tight- Djibouti 514 5,602 ened time limits. In contrast, Bosnia and Togo 560 2,016 Herzegovina increased the time to start Ethiopia 694 1,526 a business by tightening notarization niger 702 1,966 Guinea-Bissau 1,015 2,030 requirements. Syria 4,354 76,627 The Middle East and North Africa made big strides in reform. Syria was the Note: Sixty-nine economies have no paid-in minimum capital requirement. second biggest reformer in the region, Source: Doing Business database. behind Yemen. A new company law and 25% 25% Turkey procedures Procedures Paid-in 0 10 20 30 minimum Procedure is capital 12 Time to start a business (days) Source: Doing Business database. DoING BUSINESS 2009 completed when nal document is received Funds deposited in a bank FIGURE 2.4 or with a notary before Eastern Europe & Central Asia leads reforms, Africa runner-up cut 17 days by computerizing tax reg- registration Note: See Data notes for details. Number of reforms easing business start-up istration. Panama simplified licensing by Doing Business report year procedures. The Dominican Republic DB2005 DB2006 DB2007 DB2008 DB2009 reduced start-up cost and introduced FIGURE 2.5 Top 5 reform features Eastern Europe online name verification. & Central Asia 52 in starting a business (28 economies) Reforms including feature since DB2005 (%) In East Asia, Malaysia cut the time Sub-Saharan by 11 days by introducing an online20% reg- Africa 42 istration system. Singapore merged the Created or improved one-stop shop (46 economies) name search with online business regis- OECD high income 29 tration. Tonga saved12%time and cost by on (24 economies) reforming business licensing. Indonesia Simpli ed other registration formalities Latin America reduced the time to start a business from & Caribbean 25 105 days to 76, but almost doubled the 11% (32 economies) minimum capital requirement. Abolished or reduced Middle East & minimum capital requirement North Africa 23 formed. It made11% In South Asia only Bangladesh re- FIGURE 2.6 (19 economies) Introduced or improved online procedures involving lawyers in FIGURE 2.2 One-stop shops--same name, di erent results East Asia company registration optional. Rankings on starting a business Time and procedures to start a business & Paci c 16 (24 economies) are based on 4 subindicators 7% Paraguay Cut or simpli ed postregistrationAsprocedures whAt Are the reform%trends? of income per South Asia One-stop shop Preregistration, capita, no bribes included (8 economies) registration and Belarus 6 Note: A reform may include several reform features. Inpostregistrationyears 115 economies around Source: Doing Business database. the past 5 Burkina Faso Note: A reform is counted as 1 reform per reforming economy per year. the world have simplified25% FIGURE 2.3 25% business start- Source: Doing Business database. up through 193 reforms (figure 2.4). Starting a business in Azerbaijan Time Cost Morocco Required gets faster and cheaper FIGURE 2.1 additional Many opted for low-cost administrative 25% Turkey commercial code took registration out of Top 10 reformers in starting a business within 5 days.procedures in New Zealand Those reforms requiring littlePaid-in change in Time and cost to start25% a business Procedures or no the court and introduced statutory time Average improvement 0 10 can now register for taxes30while incor- 20 regulation.2005 2004 Others2006minimum went further, intro- 2007 2008 Procedure is capital limits. Using lawyers became optional. Time to start a business (days) porating their company online. Greece ducing or amending legislation. Here Time (days) Source: Doing Business database. 2007 completed when But along with65% reforms making it 46% the 54% 28% and1. Hungary reduced minimum capital Yemen arenalsome of the mostFunds is122document prevalent reforms received deposited in a bank FIGURE 2.4 easier to start a business came a reform requirements by about 80%. Hungary 2. Slovenia along with114 some of theorlessons learned with a notary before Eastern Europe & Central Asia leads reforms, Africa runner-up making it more difficult--a 33% increase also introduced online filing and pub- 3. Senegal on the way (figure 2.5). registration Note: See Data notes for details. in2008Lebanon paid-in minimum capital. Number of reforms easing business start-up lication and made the use of notaries 4. Albania Time cut and Oman improved bythe Doing Business report year optional. Italy reformed its electronic 5. Liberia by 87% DB2005 DB2006 DB2007 FIGURE 2.5 6. Azerbaijan DB2008 DB2009 Top 5 reform features 52 Eastern Europe efficiency of their one-stop shops. What registration system, enabling businesses 7. Syria & Central Asia to complete all procedures at once. Slova- 52 in starting a business (28 economies) used to take 46 days in Lebanon now 8. Hungary Reforms including feature since DB30 2005 (%) takes 11. Tunisia, having already reduced kia's one-stop shop merged 4 procedures 16 9. Oman 0 Sub-Saharan 20% Africa its minimum capital requirement, abol- into 1 and reduced costs. Entrepreneurs 10. Sierra Leone 42 Created or improved one-stop shop Cost (46 economies) ishedProcedures it altogether. Jordan reduced its Time Cost Paid-in in Switzerland were less fortunate: they (% of income per capita) OECD minimum capital requirementminimum by more now must deposit twice as much capital 14.4 high income Source: Doing Business database. 12% 29 (24 economies) than 96%. Following on the previous capital in the bank (nearly $20,000) before reg- Simpli ed other registration formalities 12.3 istering a company. Cost cut Latin America year's reforms, Egypt further reduced by 77% & Caribbean registration costs and paid-in minimum 11%9.3 25 El Salvador led reform efforts in (32 economies) capital. Saudi Arabia continued to sim- Latin America and the Caribbean, re- Abolished or reduced 6.9 Middle East & plify commercial registration formalities forming for the third year in a row. minimum capital requirement North Africa (19 economies) and reduced fees by 80%. Computeriza- 23 A new commercial code reduced the 11% 3.2 Introduced or improved online procedures 0 East Asia tion of the registry in West Bank and minimum capital requirement, simpli- & Paci c Gaza reduced the time to register. 16 fied the legalization of accounting books Source: Doing Business database. (24 economies) Among OECD high-income econo- and eased publication requirements. 7% South Asia mies there were 6 reformers. Canada Uruguay abolished the minimum capi- Cut or simpli ed postregistration procedures (8 economies) and New Zealand made it possible to 6 tal requirement. Colombia focused on Note: A reform may include several reform features. Source: Doing Business database. Note: A reform is counted as 1 reform per reforming economy per year. start a business with a single procedure. administrative changes, substantially FIGURE 2.3 Source: Doing Business database. Entrepreneurs in Toronto, Canada, can reducing costs and simplifying require- Starting a business in Azerbaijan incorporate their company online and ments for accounting books. Comput- gets faster and cheaper FIGURE 2.1 Top 10 reformers in starting a business automatically receive a business number erization was another trend: Costa Rica Time and cost to start a business Average improvement 2004 2005 2006 2007 2008 2007 Time (days) 1. Yemen STARTING A BUSINESS 13 Creating a one-stop shop FIGURE 2.6 FIGUR Thirty-nine economies have created or One-stop shops--same name, di erent results Rank Time and procedures to start a business improved a one-stop shop in the past 5 are b years: 16 in Eastern Europe and Central Paraguay One-stop shop Prereg Asia, 7 in Africa, 6 in the OECD high- regist Belarus postre income group, 5 in Latin America and 5 in the Middle East and North Africa. Burkina Faso One-stop shops can be a quick way to Morocco Required build momentum for reform. Azerbaijan, additional procedures El Salvador, Guatemala and Morocco Turkey created theirs in less than 6 months. 0 10 20 30 Proced And introducing a one-stop shop has Time to start a business (days) Source: Doing Business database. comp had promising results. In Oman business nal d is rece registrations increased from an average FIGURE 2.4 minimum capital requirement by more rate managers have to get a fiscal code 733 a month in 2006 to 1,306 a month Eastern Europe & Central Asia leads reforms, Africa runner-up than 80% in 2006, the rateNumber reg- of newof reforms easing business start-up before using the online tax system and Note: S in 2007. In Azerbaijan registrations grew istrations jumped from 13% to 26%. by Doing Business report year obtaining a tax identification number. by 40% between January 1 and May After Tunisia reduced its requirement, DB2005 DB2006 DB2007 Countries also have to make sure that DB2008 DB2009 FIGURE Top 5 2008. Croatia saw company formation in Eastern Europe & Central Asia new registrations increased by 30% be- the legislation needed to allow electronic 52 in sta Zagreb and Split increase by more than (28 economies) tween 2002 and 2006.7 That encouraged transactions is in place. Reform 300% over 3 years. the country to abolish it altogether in Sub-Saharan But much can be gained already-- But creating a one-stop shop is no 2007/08. Africa in time and cost and also in safety--by 42 Create magic bullet. Often entrepreneurs must (46 economies) computerizing files at the registry or still deal with formalities elsewhere as OECD high income using teChnology offering29some online services such as well (figure 2.6). In Guatemala, for ex- (24 economies) Making registration electronic is among name checking. And everyone has to Simpli ample, the one-stop shop can organize Latin America the most effective ways to speed com- start somewhere. It was only 13 years ago commercial, tax and social security reg- & Caribbean 25 (32 economies) pany formation. Seven of the economies that one of the company registries in the istration in 2­3 days. But before the reg- United States stored all files in a ware- Abolish Middle East & with the fastest business start-up offer minim istrar can finalize the registration, a no- North Africa electronic registration--Australia, Can- 23 house so big that employees were using tice must be published for 8 days during (19 economies) ada, Denmark, Estonia, New Zealand, roller skates to get to the documents. Ob- Introdu which third parties can raise objections. East Asia Portugal and Singapore. More than 20 taining documents took about a month. Despite the one-stop shop, 11 procedures & Paci c 16 (24 economies) economies have introduced electronic Thankfully there was no fire. and 26 days are still required. Reformers registration in the past 5 years. Custom- Cut or also run the risk of creating "one-more- South Asia (8 economies) ers are not the only ones saving on time 6 notes Note: A stop shops" or "mailboxes" that merely and cost. When Belgium implemented Source: D receive applications and forward them to its paperless registration and filing sys- Note: A reform is counted as 1 reform per reforming economy per year. 1. This example is from the World Bank's FIGURE ministries for approval. Delays continue. tem, it reduced annual administrative Source: Doing Business database. Doing Business: Women in Africa (2008a), Starti costs by 1.7 billion. a collection of case studies of African en- gets f FIGURE 2.1 trepreneurs. abolishing the minimum Capital Top 10 reformers in starting a business Electronic registration is possible Time an requirement 2. Kaplan, Piedra and Seira (2008) on Mex- in more than 80% of rich economies but Average improvement ico, Chari (2008) on India, Monteiro and 2004 Sixty-nine economies allow entrepre- only about 30% of developing ones. That 2007 Assunção (2008) on Brazil and Yakovlev Time (d neurs to start a company without put- is not surprising,65%course, given the dif- 46% of 54% 28% 1. Yemen and Zhuravskaya (2008) on the Russian 122 ting up a fixed amount of capital before ferences in internet access and costs.8 2. Slovenia Federation. registration. They allow entrepreneurs And electronic registration is more 3. Barseghyan (2008). 3. Senegal to determine what is appropriate for the complicated than it looks. In Sweden 4. 4. Albania Bruhn (2008). 2008 5. Ciccone and Papaioannou (2007). 5. Liberia business based on its type and capital applications for company, tax and labor 6. Freund and Bolaky (forthcoming), Chang, 6. Azerbaijan structure. Twenty-two economies have registrations can be completed online. 7. Syria reduced or abolished their minimum But most forms still must be printed Kaltani and Loayza (forthcoming), Cunat 8. Hungary and Melitz (2007), Helpman and Itskhoki capital requirement in the past 5 years, out and signed by hand. The Philippines 9. Oman (2007) and Helpman, Melitz and Rubin- 0 including Egypt, Finland, France, Geor- allows entrepreneurs to reserve the com- 10. Sierra Leone stein (2008). Cost gia, Hungary, Japan, Jordan, Uruguay panyProcedures name andTime register Cost online,Paid-instill but 7. Klapper and others (2008). (% of in and Yemen. This group has seen some of requires payment in person. Belgium al- minimum 8. World Bank Group Entrepreneurship 14.4 the biggest spikes in new company reg- lows electronic filing--but only capital through Source: Doing Business database. Database, 2008. istrations. After Madagascar reduced its a notary or lawyer. In Argentina corpo- overview 14 FIGURE 3.1 FIGURE 3.5 Starting a business Top 10DoINGreformers BUSINESS 2009 Private and risk-based inspections-- Dealing with in dealing with construction permits greater e ciency Average improvement FIGURE 3.1 Average delay for inspections (days) FIGURE 3.5 construction Top 10 reformers Private and ri 2007 in dealing with construction permits 254 greater e cie 15% 21% 21% Average improvement 1. Kyrgyz Republic Average delay fo permits 2008 20072. Burkina Faso 3. Hong Kong, China 15% 1. Kyrgyz Republic 20084. Rwanda 21% 21% Employing workers 5. Armenia 2. Burkina Faso 3. Hong Kong, China Registering property 6. Belarus 4. Rwanda Getting credit 7. Jamaica 5.214 Armenia 218 Protecting investors 8. Croatia 9. Bosnia and Herzegovina 6. Belarus Paying taxes 10. Angola 7. Jamaica 214 Trading across borders 8. Croatia 9. Bosnia and Herzegovina Enforcing contracts Procedures Time Cost 10. Private Angola Risk-based Random Closing a business Source: Doing Business database. inspections inspections inspections Procedures Time Cost by building by building authorities authorities Private Source: Doing Business database. inspections Source: Doing Business database. In 2007 the municipality of Niamey, buildings in the center of Niamey. 3.1). Speed matters. A recent study in Source: Doing Busine Niger, issued only 300 building permits. In Almaty, Kazakhstan, builders the United States shows that accelerat- But you wouldn't know it by looking suffer the burden of overregulation. Un- FIGURE 3.4 ing permit approvals by 3 months in a around the city, where buildings are Top 5 reform features in dealing with FIGURE 3.3 dertaking the construction of a simple construction permits 22-month project cycle could increase sprouting fast. "Building permit? Who Reforms in Sub-Saharan Africa picking up warehouse requires navigating a laby- Reforms including feature since DB2006 (%) property tax revenue by 16.15% and con- FIGURE 3.4 needs that? Just hire a contractor, tell him Number of reforms making it easier to deal with construction permits Top 5 reform FIGURE 3.3 rinth of 38 procedures and 18 agencies-- struction spending for local governments what you want, and out of the groundbyitDoing and spending 231 days DB2009process. Business report year construction Streamlined project clearances by 5.7%.2 Yet in 80 of the 181 economies 33% DB2006 DB2007 Reforms in Sub-Saharan Africa picking up DB2008 in the Reforms includi comes," says a local developer. Eastern Europe Striking theNumberbalance ismaking it easier to dealinwith construction permits right of reforms a chal- studied Doing Business, compliance & Central Asia lenge when it comes to construction 20by Doing Business report year with construction formalities takes lon- (28 economies) This approach to building has re- 28% sulted in a city at odds with the original Eastern Europe regulations. GoodDB2006 regulations ensureDB2007 ger than the standardized 30-week con- DB2008 DB2009 the Streamlined pro Introduced statutory time limits zoning plans: water pipes zigzag in every Sub-Saharan & Central Asia safety standards that protect the public struction project itself. 20 direction, and houses extend beyond Africa (28 economies) 13 (46 economies) while making the permitting process Singapore's Building and Construc- 13% Introduced stat their assigned land parcels. The reason: OECD Sub-Saharan Changed inspection regime tion Authority provides easy access to 9(46 Africa efficient, transparent and affordable for obtaining all building-related approvals high income both building authorities and the private 13 economies) the information needed for obtaining a 1 and connecting to utilities can take en- (24 economies) OECD professionals who use it. If procedures construction13% permit. Its website lists all Changed inspec trepreneurs almost 9 months, at a cost of East Asia 9Introduced new building code & Paci c 8 high income are overly complicated or costly, builders the forms that must be filled out, pro- 2,694% of income per capita. (24 economies) (24 economies) build without a permit. vides downloadable copies and enables 1 Latin America The situation may soon change. East Asia In an effort to achieve this bal- 8 users to8%submit all paperwork electroni- Introduced new Niger adopted a new building law in & Caribbean 6 & Paci c Computerized permitting process (24 economies) ance between safety and cost, Bavaria cally. Developers in Austria, Denmark, March 2008, following the collapse of 2 (32 economies) Note: A reform may include several reform features. 8% Latin America introduced a differentiated permitting Source: Doing Business database. Iceland, Malaysia and the United States Middle East & Computerized p 4 & Caribbean approach in 1994. Low-risk projects re- 6 also complete their applications online. Table 3.1 North Africa (32 economies) Note: A reform may Where is dealing with construction (19 economies) quire that the designing architects show Source: Doing Busine permits easy--and where not? Middle East & FIGURE 3.2 South Asia North Africa proof of their qualifications4and assume 0 Rankings on dealing with construction Easiest (8 economies) RAnK Most difficult RAnK (19 economies) liability for the construction. Medium- permits are based on 3 subindicators FIGURE 3.2 St. Vincent and risk ones require that an independent Note: A reform is counted as 1 reform per reforming economy per year. 1 Tanzania 172 South Asia 0 Days to build As % of income per capita, Rankings on the Grenadines Source: Doing Business database. (8 economies) certified appraiser approve the plans. a warehouse no bribes included permits are Singapore 2 Burundi 173 Only high-risk, complex projects are in main city new Zealand 3 Zimbabwe 174 Note: A reform is counted as 1 reform per reforming economy per year. Days to build Source: Doing Business database. fully reviewed by building authorities.1 33.3% 33.3% a warehouse Belize 4 Kazakhstan 175 By 2002 builders had saved an estimated Time Cost in main city Marshall Islands 5 China 176 154 million in building permit fees, St. Kitts and nevis 6 Liberia 177 Denmark 7 Tajikistan 178 and building authorities had 270 fewer 33.3% Maldives 8 Ukraine 179 employees on their payroll. The approach Procedures Kenya 9 Russian Federation 180 has spread to the rest of Germany. Georgia 10 Eritrea 181 Economies that score well on the Procedure is completed when nal document is received; construction permits, inspections Note: Rankings are the average of the economy rankings on the ease of dealing with construction permits procedures, time and cost to comply with formalities to build a and utility connections included warehouse. See Data notes for details. tend to have rigorous yet expeditious and Note: See Data notes for details. Procedure is co Source: Doing Business database. transparent permitting processes (table is received; con and utility conn Note: See Data no DEALING wITH CoNSTRUCTIoN PERMITS 15 Twenty-seven economies, including Table 3.2 France and Hong Kong (China), ensure Streamlining permitting procedures--a popular reform feature in 2007/08 timely approvals for building permits Streamlined construction permit procedures Angola, Colombia, Croatia, Hong Kong (China), through silence-is-consent rules, with Jamaica, Kyrgyz Republic, Rwanda, Tonga time limits ranging from 2 to 4 weeks. Reduced permit processing times Belarus, Bosnia and Herzegovina, Colombia, Finland and Singapore--both Jamaica, Liberia, Singapore among the 10 fastest in dealing with con- Adopted new building regulations Croatia, Egypt, Mauritania, Portugal, Tonga struction permits--hold the architect or Reduced fees Armenia, Bosnia and Herzegovina, Burkina Faso, another qualified professional account- Hong Kong (China), Liberia able for supervising the construction and Improved inspection regime Burkina Faso, Hong Kong (China), Sierra Leone ensuring its quality. for construction projects Source: Doing Business database. who reformed in 2007/08? company. The mayor's office no longer It also eliminated the need for the min- Eighteen economies made it easier for handles occupancy permits either. "It ister's signature on building permits for businesses to comply with construction- took me 6 months before the reforms, simpler projects by delegating approval related formalities in 2007/08 (table 3.2). and I still could not obtain the mayor's to mid-level staff. Africa had the most reforms, with 6 econ- signature. After the reforms, it took me Liberia's deputy minister of public omies--Angola, Burkina Faso, Liberia, just over a week to get my occupancy works cut building permit fees in half, Mauritania, Rwanda and Sierra Leone-- permit signed and sealed." from $1,400 to $700, to encourage more making it easier to deal with construc- After cutting 9 procedures and 173 legal building in Monrovia. "I thought tion permits. Eastern Europe and Central days, the government is now focusing people were going underground because Asia followed, with reforms in Armenia, on reducing the cost--still high at more costs were too high, so I decided to cut Belarus, Bosnia and Herzegovina, Croatia than 405% of income per capita. fees." In a country where obtaining a and the Kyrgyz Republic. Burkina Faso, once among the bot- building permit used to cost 10 times In East Asia and Pacific, Hong Kong tom 10 on the ease of dealing with con- income per capita and other costs of (China), Singapore and Tonga stream- struction permits, was the second fastest construction permitting remain high, lined procedures. In Latin America and reformer. A multifaceted reform pro- this makes sense (table 3.3). the Caribbean, Colombia and Jamaica gram cut 12 days and reduced the cost by Sierra Leone revamped its inspec- reduced the time to process building 25%. To start, a government decree lim- tion regime. Existing regulations pro- permit applications. Among OECD high- ited the number of on-site inspections vided for inspections after each stage of income economies, Portugal was the only by the National Laboratory for Buildings construction. But inspectors would come reformer. In the Middle East and North and Public Works. That eliminated the at random once or even twice a week. Africa, Egypt was the only one. South biweekly random inspections that used Starting in 2007, the Ministry of Lands, Asia recorded no major reforms. to plague builders in Ouagadougou. "We Housing, Country Planning and Envi- The Kyrgyz Republic was the top can still expect inspections at certain ronment recruited a new cadre of profes- reformer in dealing with construction critical stages, but this is a far cry from sional inspectors and began enforcing permits in 2007/08. A new one-stop shop the up to 15 or so we could receive be- the regulations. was launched for issuing architectural fore," says one architect. In May 2008 the Rwanda streamlined project clear- planning terms and construction per- government launched a one-stop shop. ances for the second year in a row by mits. Regulations left over from Soviet This has already shown results. It cut combining the applications for a location times had required builders to obtain fees for soil exams in half and reduced clearance and building permit in a single separate preapprovals from each utility those for municipal approvals and fire form. And businesses now need to sub- authority. Now all approvals are handled safety studies. And it allows applicants mit only one application form for water, in the one-stop shop. for building permits to make all pay- sewerage and electricity connections. Kyrgyz reformers didn't stop there. ments at a single place. Angola incorporated the applications for A presidential decree eliminated the lo- Reformers were active in Africa. electricity and water connections into cation permit, which had required the In Liberia the Ministry of Public Works the building permit process, cutting pro- signature of Bishkek's mayor and took committed to delivering building per- cedures from 14 to 12. 60 days to obtain. "It used to be a night- mits in just 30 days, down from 90. The Mauritania introduced its first mare. You never knew what additional ministry advertised the 30-day statutory building code. This simplifies the re- papers would be required," says Bekbo- time limit and designed a user-friendly quirements for small construction proj- lot, owner of a medium-size construction checklist of all the documents required. ects and lays the groundwork for a one- 16 DoING BUSINESS 2009 Table 3.3 torate and sanitary authority--cutting 5 Who regulates construction permits the least--and who the most? procedures. Procedures (number) In Bosnia and Herzegovina admin- Fewest Most istrative improvements made it easier Denmark 6 Azerbaijan 31 to obtain cadastre excerpts, required for new Zealand 7 Hungary 31 building permits, and to register new Vanuatu 7 Brunei 32 buildings in the cadastre and land book Sweden 8 Guinea 32 registry. That cut the time from 467 days Chad 9 Tajikistan 32 to 296. In Belarus new statutory time Maldives 9 El Salvador 34 limits for pre-permitting procedures and St. Lucia 9 Czech Republic 36 Grenada 10 China 37 building permits reduced the time by Jamaica 10 Kazakhstan 38 140 days. In Armenia companies no Kenya 10 Russian Federation 54 longer have to pay "charitable contribu- Time (days) tion" fees to obtain the designing right. That cut the cost by 383.3% of income Fastest Slowest per capita. Korea 34 Cameroon 426 Several economies went the other Finland 38 Suriname 431 way. In Serbia the wait for building per- Singapore 38 Ukraine 471 United States 40 Lesotho 601 mits increased by an average 75 days. In Vanuatu 51 Côte d'Ivoire 628 Ukraine a regulation introduced in 2007 Marshall Islands 55 Iran 670 requires businesses to pay a "contribu- Bahrain 56 Russian Federation 704 tion" to infrastructure development that Solomon Islands 62 Cambodia 709 amounts to 15% of construction costs. new Zealand 65 Haiti 1,179 Now builders in Kiev can expect to pay Belize 66 Zimbabwe 1,426 1,902% of income per capita to deal with Cost (% of income per capita) construction-related formalities. Least Most In East Asia, Hong Kong (China) Qatar 0.8 Ukraine 1,902 pursued a broad program that elimi- United Arab Emirates 1.5 Tanzania 2,087 nated 8 procedures and cut the time for St. Kitts and nevis 5.1 Serbia 2,178 construction permits by more than 5 Brunei 5.3 Russian Federation 2,613 weeks, ranking it among the top reform- Trinidad and Tobago 5.5 Guinea-Bissau 2,629 ers globally. In 2006 the government, Palau 5.9 niger 2,694 working with the private sector, cre- Malaysia 7.9 Burundi 8,516 St. Vincent and the Grenadines 8.4 Afghanistan 14,919 ated a cross-sector consultation team Thailand 9.4 Zimbabwe 16,369 to identify ways to improve permitting Hungary 10.3 Liberia 60,989 procedures. Working groups started with agencies and companies operating in Source: Doing Business database. the construction sector found redundant procedures, improved communication stop shop for building permits. sets statutory time limits of 120 days for and coordination schemes and identi- In Zimbabwe and Benin, obtaining building permits. But these time limits fied regulatory "easy fixes" that could building permits became more difficult. have yet to be enforced. improve efficiency. "This is a very clever In Zimbabwe's capital, Harare, employ- Eastern Europe and Central Asia and pragmatic approach--something ees have been leaving the construction saw many reforms, though only half very much in touch with our culture," administration. With fewer trained pro- of them easing the regulatory burden. comments the owner of a local construc- fessionals to review applications, getting In Croatia a new building code elimi- tion company. a building plan approved by the city nated the need for a building permit Singapore reduced the time for council can now take a year. for smaller projects and eased the re- dealing with construction permits by In Cotonou, Benin, it now takes quirements for larger ones. Now mid- two-thirds in 2007/08--more than any about 180 days to obtain a building size commercial construction projects other economy in the world. The agen- permit--3 months longer than it used no longer need clearances from the fire cies responsible for approvals cut their to--because of administrative backlogs. department, water and sewerage authori- internal time limits by half. To save more A new regulation released in June 2007 ties, telephone company, labor inspec- time, the Building and Construction Au- DEALING wITH CoNSTRUCTIoN PERMITS 17 FIGURE Top 5 thority's new data management system FIGURE 3.3 constr makes processing smarter and more user Reforms in Sub-Saharan Africa picking up Reform friendly. Today builders regularly receive Number of reforms making it easier to deal with construction permits by Doing Business report year updates on the status of their permit ap- DB2006 DB2007 DB2008 DB2009 Stream plications by e-mail and text messaging. Eastern Europe & Central Asia Latin America and the Caribbean 20 (28 economies) also saw important reforms. In Colombia Introdu Sub-Saharan the magistrates responsible for issuing Africa 13 building permits started using a single (46 economies) form. Builders no longer need to obtain OECD Change 9 the names and contact information of high income (24 economies) all neighbors before submitting a permit East Asia Introdu application. A decree implementing a & Paci c 8 decade-old silence-is-consent rule kicked (24 economies) in, reducing the time to obtain a building Latin America & Caribbean 6 Compu permit from 3 months to 2. In Jamaica FIGURE 3.1 FIGURE 3.5 Top 10 reformers (32 economies) Private and risk-based inspections-- Note: A re the government began implementing a in dealing with construction permits Source: Do Middle East & greater e ciency 90-day statutory time limit. That cut the Average improvement North Africa 4 Average delay for inspections (days) time to obtain a building permit from 2007 (19 economies) 254 210 days15% 130--much better, though FIGUR to 21% 21% South Asia 1. Kyrgyz Republic still short of the target. 2008 0 (8 economies) Rank 2. Burkina Faso perm 3. Hong Kong, China Elsewhere, economies continued Note: A reform is counted as 1 reform per reforming economy per year. 4. Rwanda Days t to revamp their building codes. Tonga Source: Doing Business database. 5. Armenia a ware in mai implemented its 2005 building code in 6. Belarus late 2007. The new code incorporates 257.administrative. Legal reforms deal Jamaica administrative reforms have cut super- 218 8. Croatia 214 zoning and health and fire safety ap- with new building codes, regulations and 9. Bosnia and Herzegovina fluous procedures and inspections. But provals into the building permit process, bylawsAngola change the standards and 10. that builders in Africa still face outdated con- cutting 3 procedures and reducing the organization of construction permitting. struction codes or new ones not yet fully time by 12 days. Portugal's new build- Procedures Time Cost Administrative reforms include stream- Private Risk-based Kenya overhauled all its Random ing regulations introduced electronic lining project clearances and introduc- Source: Doing Business database. implemented.inspections building regulations. Todayinspectionsonly inspections by building by building it is the processing of documents. Egypt's new ing time limits and online processes. African economy to rank among the top authorities authorities Proce is rece building code aims to reduce the time to Reforming building codes can be a long, 10 on the ease of dealing with construc- Source: Doing Business database. and u obtain a building permit by establishing complex exercise, requiring input from tion permits. Note: S a single window and enforcing a 30-day many stakeholders. A new building code statutory time limit. The new code also enacted in 2007 in the Czech Republic introduces a single certificate for obtain- was 18 years in the making. FIGURE 3.4 ing all utility connections. Before, each Top 5 reform features in dealing with FIGURE 3.3 The focus in Eastern Europe and construction permits utility connection required 3 separate Reforms in Sub-Saharan Africa picking up Central Asia, while initially on legal Reforms including feature since DB2006 (%) letters from the Number municipality. of reforms making it easier to deal with construction permits by Doing Business report year reforms, is shifting to administrative 33% DB2006 DB2007 changes. Georgia is aDB2009 example. DB2008 good Streamlined project clearances Eastern Europe whAt Are the reform trends? After 3 years of reform it claimed a place & Central Asia (28 economies) in the top 10 on the ease of dealing20with 28% In the past 4 years, with 20 reforms, construction permits. But long delays re- Introduced statutory time limits Eastern Europe and Central Asia has Sub-Saharan Africa main in the rest of the region--where the 13 had the most reforms making it easier (46 economies) process takes 260 days on average, over 13% to deal with construction permits (figure OECD 100 days more than the average of 154 in Changed inspection regime 3.3). Africa follows, with 13. OECD high- high income 9 (24 economies) OECD high-income economies. income economies have had 9, East Asia Reformers in Africa started with 13% and Pacific 8, Latin America and the East Asia Introduced new building code & Paci c 8 administrative reforms. They began in Caribbean 6, the Middle East and North (24 economies) earnest in 2006, cutting 4 procedures 8% Africa 4 and South Asia 0. Latin America and reducing delays by 15 days on aver- & Caribbean Computerized permitting process (32 economies) Of the 60 reforms easing construc- 6 age. Meanwhile, delays in the rest of the Note: A reform may include several reform features. tion permitting, 35 have been legal and region increased by 26 days. In Nigeria Source: Doing Business database. Middle East & North Africa 4 (19 economies) FIGURE 3.2 South Asia 0 Rankings on dealing with construction 18 DoING BUSINESS 2009 streamlining projeCt ClearanCes rationalizing inspeCtions Most EU economies have shifted The most popular reform feature globally The third most popular reform feature at least part of inspections to the pri- has been to streamline project clear- has been to shift from random inspec- vate domain. Their experience shows ances (figure 3.4). Because building ap- tions toward a more risk-based approach, that private inspections work best when provals require the technical oversight with inspections only at critical stages of supported by strong professional asso- of multiple agencies, an obvious choice construction. Building authorities have ciations with well-regulated accredita- has been to set up a one-stop shop. But traditionally relied on random inspec- tion mechanisms. A mature insurance this is no easy fix. One-stop shops are tions to ensure compliance. Today only industry also helps. In 2007 the Czech designed to integrate services through a 41 economies--most in Africa, Latin Republic introduced a new profession of single point of contact between building America and the Caribbean and the authorized inspectors. Two professional authorities and entrepreneurs. Their suc- Middle East and North Africa--still use chambers of architects and engineers cess depends on coordination between them. Building authorities have learned and technicians provide a strong base.3 these authorities and on sound overarch- that random inspections strain their lim- ing legislation. ited resources and are an inefficient way Take the experience of Bangladesh. to ensure building safety (figure 3.5). notes In August 2007 Dhaka's municipal build- Eleven of the top 15 economies on ing authority introduced a one-stop shop the ease of dealing with construction 1. Bayerisches Staatsministerium des Innern for building permits. Almost a year later permits have gone beyond risk-based (2002). builders still had to visit each agency inspections. Instead, they allow certified 2. PricewaterhouseCoopers (2005). responsible for approvals, mainly because professionals or independent agencies 3. Geginat and Malinska (2008). of inconsistent fire safety regulations. By to perform inspections during construc- law, only buildings with more than 10 tion. Building authorities usually inspect floors should require fire safety clearance. buildings only after they are complete. The fire department insists that the cutoff Singapore, one of the top performers, should be 6 floors, as in the old regula- delegates control and supervision of the tions. Builders can spend 6 months shut- entire construction process to licensed tling between agencies, trying to make engineers and architects. In Japan more sense of the inconsistent rules. flexible licensing regulations for private inspection companies have increased setting time limits their numbers and made contracting with The second most popular reform fea- them faster and cheaper for builders. ture has been to introduce statutory time limits or silence-is-consent rules. Many FIGURE 3.5 Private and risk-based inspections-- economies write time limits into the law greater e ciency in the hope of ending administrative de- Average delay for inspections (days) lays. Algeria put a 2-month time limit 254 on1.issuing building permits in 2006. But Kyrgyz Republic obtaining a building permit still takes an 2. Burkina Faso average 150 days because of lack of ad- 3. Hong Kong, China 4. Rwanda ministrative resources. Builders wait, out 5. Armenia of fear that their buildings will be demol- 6. Belarus ished if they proceed without a permit. 7. Jamaica 218 8. Croatia 214 9. Bosnia and Herzegovina In Colombia a law introduced a si- lence-is-consent rule in 1997. Ten years 10. Angola later an implementing regulation and a far-reaching public awareness campaign Private Risk-based Random finally made it possible for builders to Source: Doing Business database. inspections inspections inspections take control of the process. "Now we by building by building authorities authorities can begin construction after 45 working Source: Doing Business database. days without any fear. As long as every requirement is complied with, we know the law protects us," says one Colom- bian architect. FIGURE 3.4 Top 5 reform features in dealing with construction permits king up Reforms including feature since DB2006 (%) aking it easier to deal with construction permits by Doing Business report year 33% North Africa 1 (19 economies) FIGURE 4.3 Rigid labor regulations are associated with high informality and high unemployment Note: A reform is counted as 1 reform per reforming economy per year. Size of informal sector (% of GDP) Source: Doing Business database. 19 overview Female unemployment (%) 30 Starting a business 12 FIGURE 4.1 FIGUR Rank Dealing with construction permits Economies with rigid labor regulations have fewer business start-ups Employing Rigidity of employment are b 20 Average entry rate, 2000­04 (%) 8 index in DB2005 Fixed- workers 15 45 minim regula 10 4 Registering property 10 30 Getting credit 0 0 Least rigid Most rigid Least rigid Most rigid Protecting investors Economies ranked by Economies ranked by Payingrigidity taxes of employment index, quintiles 5 rigidity of employment index, quintiles 15 Note: Relationships are signi cant at the 1% level for size of the informal sector and at the 10% level for female unemployment, and remain Trading across borders signi cant when controlling for income per capita. Manda Source: Doing Business database; WEF (2007); World Bank, World Development Indicators database. Enforcing contracts require Closing a business 0 0 for eco New Zealand Slovakia Sweden Norway Georgia Germany Bolivia Peru Note: Se FIGURE 4.4 Source: Doing Business database; Djankov, Ganser, McLiesh, Ramalho and Shleifer (2008). FIGURE 4.5 Most reforms in Eastern Europe & Central Asia Top 4 reform features in Aissa, a successful designer, owns a busi- Number of reforms increasing exibility of labor regulations which workers to dismiss; she would employing workers measures flexibility in the regulation of ness exporting traditional Senegalese by Doing Business report year have to follow a particular order of se- Reforms including feature since DB2005 (%) hiring, working hours and dismissal in a Eastern Europe handwoven fabrics to upscale interna- DB2005 DB2006 niority.DB she would have to prove that And2007 DB2008 DB2009 manner consistent with the conventions 36% & Central Asia her industry is suffering a slowdown. 19 Made working hours more exible of the International Labour Organization (28 economies) tional brands like Hermès and Christian Lacroix. Demand is growing, so much This is nearly impossible, since Senegal (ILO). An economy can have the most OECD high income so that Aissa would have to quadruple lacks reliable statistics on industrywide flexible labor regulations as 29% measured by Eased restrictions on xed-term contracts (24 economies) production to meet it. But that would trends. Besides, there are no16formal crite- Doing Business while ratifying and com- Sub-Saharan mean hiring more workers--and that ria on what constitutes a slowdown. The plying with all conventions directly rel- Africa seems too risky.1 What if demand should 4 labor inspector decides. Reduced dismissal costs evant to the15% factors measured by Doing (46 economies) decline? It would be difficult to downsize Senegal's restrictive labor laws make Business4 and with the ILO core labor Latin America & Caribbean again. "People can sue you and say you 3 it difficult to adjust to demand. Besides standards. No economy can achieve a 11% (32 economies) have fired them illegally," Aissa explains. the burdensome dismissal requirements, Removed requirements for dismissals better score by failing to comply with East Asia "You have to give them a letter and then employers face tight restrictions on these conventions. & Paci c a long process begins."2 working hours and a ban on using fixed- Note: A reform may include several reform features. Doing Business supports the ILO (24 economies) That process would involve multiple term contracts for permanent tasks. All Source: Doing Business database. core labor standards--the 8 conventions South Asia letters to the labor inspector, all requir- this leads to another problem for Aissa: covering the right to collective bargain- (8 economies) 2 ing a formal response. Aissa would have many of her competitors circumvent ing, the elimination of forced labor, the Middle East & to give specific reasons for dismissing labor regulations altogether by operating abolition of child labor and equitable North Africa workers and prove that she had tried 1 in the informal sector. treatment in employment practices. Re- (19 economies) other solutions. She could not choose Aissa is not alone. A study of 1,948 spect for these standards helps create Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. retail stores in large Indian cities finds an environment in which business can Table 4.1 that 27% see labor regulations as a prob- FIGURE 4.1 Where is it easy to employ workers-- FIGURE 4.2 Economies with rigid labor regulations have fewer business start-ups and where not? lem.2 The study also finds that making labor laws more flexible could increase Rankings on employing workers are based on 4 subindicators Average entry rate, 2000­04 (%) Easiest RAnK Most difficult RAnK Rigidity of employment employment in stores by 22% on aver- index in DB2005 United States 1 Panama 172 Fixed-term contracts, Nonstandard work schedules, 15 Singapore 2 Sierra Leone 173 age. This is substantial: the retail sector 45 minimum wage paid vacation days regulations Marshall Islands 3 Angola 174 is India's second largest employer, pro- 25% 25% Maldives 4 Congo, Dem. Rep. 175 viding jobs to 9.4% of workers. Similarly, Di culty Rigidity 10 Georgia 5 Guinea-Bissau 176 a study in Brazil finds that enforcement 30 of hiring of hours index index Brunei 6 Paraguay 177 of rigid labor regulations limits firm size Tonga 7 Equatorial Guinea 178 and reduces employment.3 25% 25% Di culty Firing Australia 5 8 São Tomé and 179 of ring cost Principe Employment regulations are needed 15 index Palau 9 Bolivia 180 to allow efficient contracting between Mandatory legal As weeks of salary; Denmark 10 Venezuela 181 employers and workers and to protect requirements for dismissals includes notice period 0 for economic reasons and severance payments Note: Rankings are the average of the economy rankings on the workers from discriminatory or unfair 0 difficulty of hiring, rigidity of hours, difficulty of firing and firing New Zealand Slovakia Sweden Norway Georgia treatmentGermany by employers. In itsPeru Bolivia indicators cost indices. See Data notes for details. Note: See Data notes for details. Source: Doing Business database; Djankov, Ganser, McLiesh, Ramalho and Shleifer (2008). Source: Doing Business database. on employing workers, Doing Business 20 DoING BUSINESS 2009 FIGURE 4.3 Rigid labor regulations are associated with high informality and high unemployment courage entrepreneurship. Two recent studies suggest that flexible regulations Size of informal sector (% of GDP) Female unemployment (%) increase the probability of start-ups by 30 12 about 30%.11 The researchers offer 2 ex- planations. For employees, lower job se- 20 8 curity makes starting their own business attractive. For entrepreneurs, the greater 10 flexibility in running a business makes 4 business ownership more attractive. Reforms making labor regula- 0 0 Least rigid Most rigid Least rigid Most rigid tions more flexible also may increase Economies ranked by Economies ranked by industrial production and reduce urban rigidity of employment index, quintiles rigidity of employment index, quintiles unemployment. In the Indian states of Note: Relationships are signi cant at the 1% level for size of the informal sector and at the 10% level for female unemployment, and remain Andhra Pradesh and Tamil Nadu such signi cant when controlling for income per capita. Source: Doing Business database; WEF (2007); World Bank, World Development Indicators database. reforms increased manufacturing output by 15%. In West Bengal, by contrast, develop. Doing Business does not mea- tions are associated with a larger infor- reforms making labor regulations more sure compliance with them, however, and mal sector7 (figure 4.3). This pattern is rigid cut output by 20%.12 The estimated FIGURE 4.4 FIGURE 4.5 Most reforms in Eastern Europe & Central Asia these 8 conventions are not reflected in evident in Venezuela and Bolivia. Both Top 4 reform features in result: 1.8 million more urban poor in the employing workers indicators. This Number of reforms increasing exibility of labor regulations have laws that ban dismissing workers employing workers West Bengal.13 year's report shows which of the 8 con- by Doing Business report year on economic grounds and are among the Reforms including feature since DB2005 (%) Eastern Europe ventions have been ratified by each ofDBthe DB2005 2006 economies with the most rigid employ- DB2007 DB2008 DB2009 who reformed in 2007/08? 36% & Central Asia 181 economies it includes (see table on ment regulations (table 4.1). And both 19 Made working hours more exible (28 economies) ratification status of the 8 ILO conven- are among the 5 economies with the Fifteen economies made significant OECD largest informal sectors (41% of GDP in changes to their labor regulations in 29% high income tions regarding core labor standards, page Eased restrictions on xed-term contracts (24 economies) 147). Ratification of the core labor stan- Venezuela, 43% in Bolivia).168 2007/08. Six economies increased flex- Sub-Saharan dards is not necessarily a good indicator In the end, workers in the infor- ibility; 9 reduced it. Eastern Europe and Africa of compliance. A measure of4compliance mal sector lose out the most. They are Reduced dismissal costs Central Asia15% introduced the most re- (46 economies) is being developed under the Doing Busi- generally paid lower wages and enjoy forms increasing flexibility, followed by Latin America & Caribbean ness project for future inclusion in the 3 no legal protections or social benefits. Africa and Latin America and the Carib- 11% (32 economies) employing workers indicators. The most vulnerable groups, women and Removed requirements for dismissals bean (table 4.2). East Asia Governments all over the world face young workers, are often at the greatest Burkina Faso was the most active & Paci c the challenge of finding the right balance 2 disadvantage. A study in Indonesia finds Note: A reform may include several reform features. reformer, adopting a new labor code that (24 economies) between worker protection and labor that if it had enjoyed the same flexibil- Source: Doing Business database. replaced its 2004 code. Employees and South Asia market flexibility. Denmark, for example, ity in labor regulations as Finland, for employers can now determine the weekly (8 economies) seeks to reconcile job flexibility with em- 2 example, its unemployment rate might rest day without having to seek the ap- Middle East & ployment security through "flexicurity." have been 2.1 percentage points lower proval of the authorities. And employ- North Africa Employers face no regulations against 1 and, among young people, 5.8 percent- ers may be encouraged to take greater (19 economies) laying off workers for economic reasons. age points lower.9 risks in hiring new workers thanks to Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. They only provide advance notice. More Finding the right balance can be dif- increased flexibility in using fixed-term than 80% of workers belong to a volun- ficult, but the quest is worth it. Another contracts and less rigid dismissal proce- FIGURE 4.1 tary unemployment insurance scheme.5 recent study looks at the effects of labor dures. For example, strict priority rules, FIGURE 4.2 Economies with rigid labor regulations have fewer business start-ups Workers benefit from the flexible regula- regulation in Latin America, using survey Rankings on employing workers Average entry rate, 2000­04 (%) Rigidity of employment including seniority, no longer apply in are based on 4 subindicators tions, which give them the opportunity data for 10,396 firms in 14 index countries.10 in DB2005 dismissing workersNonstandard for redundancy. Fixed-term contracts, work schedules, 15 for a job in the formal sector and easy Firms were asked how many permanent 45 minimum wage Azerbaijan was the second most paid vacation days transitions from one job to another. In- workers they would hire and how many active reformer.25% regulations Working hours became deed, more than 70% of Danes think it is they would dismiss if labor regulations more flexible, with restrictions on night 25% Di culty Rigidity 10 good to change jobs frequently.6 were made more flexible. The analysis 30 work now applying only where labor of hiring of hours But in developing countries espe- suggests that the result would be an av- conditions areindex orindex hard hazardous. Before cially, regulators often err to one ex- erage net increase of 2.1% in total jobs. the reform,Dianculty 25% 25% employer could dismiss Firing treme--pushing employers and workers 5 Firms with fewer than 20 employees ben- 15 into the informal sector. Across develop- efit the most, with average gains of 4.2%. a worker forofindex economic reasons only if ring cost the worker could not be reassigned to ing economies, overly rigid labor regula- Flexible labor regulations also en- another position. That includes Mandatory legal As weeks of salary; requirements for dismissals requirement is notice period 0 0 for economic reasons and severance payments New Zealand Slovakia Sweden Norway Georgia Germany Bolivia Peru Note: See Data notes for details. Source: Doing Business database; Djankov, Ganser, McLiesh, Ramalho and Shleifer (2008). EMPLoyING woRkERS 21 Table 4.2 Easing restrictions on fixed-term contracts--a popular reform feature in 2007/08 rules for group redundancy dismissals, making it more difficult for employers to Eased restrictions on fixed-term contracts Azerbaijan, Burkina Faso, Mozambique, Slovenia adjust during economic downturns. In Made working hours more flexible Azerbaijan, Burkina Faso, Czech Republic Fiji new legislation strengthened protec- tions against discrimination in employ- Reduced dismissal costs Argentina, Mozambique, Slovenia ment and shifted dispute resolution from Removed requirements for dismissal Azerbaijan, Burkina Faso litigation to mediation. But it also intro- Made dismissal more difficult Cape Verde, China, Fiji, The Gambia, Italy, duced new notification requirements for Kazakhstan dismissals and reduced the flexibility of Increased restrictions on fixed-term employment Korea, Sweden working hours by imposing a limit of 48 Increased paid annual leave United Kingdom hours in a 6-day workweek. Source: Doing Business database. Among OECD high-income econo- mies, Korea introduced important pro- gone. Specific notification and approval eliminate restrictions on weekend work visions on equality of opportunity and requirements for redundancy were also and ease constraints on the dismissal of nondiscrimination in hiring and promo- eased. And as in Burkina Faso, fixed- redundant workers. tion. It also limited fixed-term contracts term contracts can now be used for any In Latin America, Argentina reduced to 24 months. task. On the basis of the new labor code, the severance payment for a worker with Several economies made employ- Azerbaijan now ranks among the 10 20 years of seniority from 30 months to ment regulations more rigid. Kazakhstan economies with the least rigid employ- 20. After its unemployment rate fell below now requires employers to first transfer ment regulations as measured by Doing 10%, a 2007 decree abolished the 50% an employee to another job when consid- Business (table 4.3). increase in severance payments that had ering redundancy. Italy increased the no- Mozambique's new labor law also been part of the 2002 "emergency laws." tice period for dismissal of workers from increased flexibility in the use of fixed- ReformsinEastAsiaandPacificwere 2 weeks to 75 days, The Gambia from 2 term contracts. It reduced the notice a mix, both increasing flexibility and re- months to 6 and Cape Verde from 30 days period for dismissals, from 90 days to ducing it. China introduced new priority to 45. Sweden reduced the maximum 30. And it introduced phased reductions Table 4.3 in severance pay. Who makes employing workers easy--and who does not? In Eastern Europe, Slovenia and Rigidity of employment index (0­100) the Czech Republic provided for greater flexibility in using employment con- Least Most tracts. Slovenia now permits employers Hong Kong, China 0 São Tomé and Principe 63 to extend fixed-term contracts from the United States 0 Angola 66 statutory 24 months to the duration of a Singapore 0 Equatorial Guinea 66 project. It also reduced the notice period Maldives 0 Guinea-Bissau 66 Marshall Islands 0 Panama 66 for dismissals from 75 days to 60. The Australia 3 Congo, Rep. 69 Czech Republic introduced flexibility in Azerbaijan 3 niger 70 overtime hours, probationary periods Uganda 3 Congo, Dem. Rep. 74 and length of the workweek. In addition, Canada 4 Bolivia 79 its amended labor code simplified the Jamaica 4 Venezuela 79 working hours account, allowing choice Firing cost (weeks of salary) in the distribution of working hours over Least Most a 4-week period. Denmark 0 Equatorial Guinea 133 Continuing the trend toward greater new Zealand 0 Mozambique 134 flexibility in Eastern Europe, the former United States 0 Ecuador 135 Yugoslav Republic of Macedonia is in Puerto Rico 0 Sri Lanka 169 the final stages of passing a new labor Afghanistan 0 Ghana 178 relations law that will increase flexibility Iraq 0 Zambia 178 in working hours and reduce dismissal Marshall Islands 0 Sierra Leone 189 costs for redundancies. The new provi- Micronesia 0 Zimbabwe 446 Palau 0 Bolivia noT PoSSIBLE sions will allow flexible use of fixed-term Tonga 0 Venezuela noT PoSSIBLE contracts, increasing their maximum Note: The rigidity of employment index is the average of the difficulty of hiring index, rigidity of hours index and difficulty of firing index. duration from 4 years to 5. It will also Source: Doing Business database. 22 DoING BUSINESS 2009 duration of fixed-term contracts from 3 high-income economies follow with 16, Reform was widespread: 8 of the 10 years to 2. The United Kingdom increased with Australia, Germany and Switzer- countries in the region that have joined the paid annual leave to which workers land all reforming more than once. the European Union have reformed their are entitled from 20 working days to 24. In Africa, Uganda (in 2006), Mo- labor laws. Several, including Lithuania zambique (in 2007) and Burkina Faso (in and Romania, did so to harmonize their whAt Are the reform trends? 2008) enacted new labor laws, introduc- laws with EU legislation. ing worker protections while increas- In South Asia 2 economies have re- Across the world, Doing Business has re- ing the flexibility of labor regulations. formed. Bhutan went far, implementing corded only 77 reforms affecting the em- Namibia (in 2004) eased restrictions on its first labor code in 2007. The new labor ploying workers indicators since 2004. Of working hours. Yet among regions, Af- code established protective measures for the 77 reforms, 47 made labor regulations rica continues to have the most rigid workers without imposing heavy burdens more flexible; 30 made them more rigid. labor regulations. Dismissal costs for on employers. The protections created Labor reforms are rare. This is unsurpris- a worker with 20 years of employment incentives for workers to join the private FIGURE 4.3 Rigid labor regulations are associated with high informality and high unemployment ing. Governments work on such reforms amount to more than 3 years of salary sector--and employers now have a larger Size of informal sector (% of GDP) for years, and there are many stakehold- Female unemployment (%) in Sierra Leone and more than 8 years pool of candidates to choose from. The 30 ers involved. Labor reforms normally in Zimbabwe. Africa is also home to better working conditions have led to imply a tripartite consultation--between 12 the countries with the largest numbers higher productivity.14 government, employers' representatives of mandatory paid annual leave days: In Latin America, Colombia and 20 and workers' representatives. Finding the Eritrea with 34, Ethiopia with 33 and 8 Argentina made labor regulations more right balance of interests is a challenging Cameroon with 32. flexible. Both made redundancy dismiss- 10 and important exercise. 4 Three reformers stand out in East- als easier--Colombia in 2004 and Ar- ern Europe and Central Asia. Slovakia gentina in 2005. Argentina also reduced moving toward more flexible (in 2004) and Azerbaijan (in 2008) in- dismissal costs in 2007. In East Asia regulations 0 Least rigid Most rigid troduced flexibility in the use ofMost 0 Least rigid fixed- rigid and Pacific, Vietnam eased restrictions GovernmentsEconomies rankedEurope and in Eastern by term contracts, in work schedules and Economies ranked by on fixed-term contracts, and Taiwan Central Asia have been the most active rigidity of employment index, quintiles in redundancy requirements. Georgia rigidity of employment index, quintiles (China) on working hours. Except for Note: Relationships are signi cant at the 1% level for size of the informal sector and at the 10% level for female unemployment, and remain signi cant when controlling for income per capita. reformers in the past 5 years, introduc- made big changes in those areas in 2005 Israel, no economies in the Middle East Source: Doing Business database; WEF (2007); World Bank, World Development Indicators database. ing 19 reforms increasing the flexibility and 2006 and also introduced changes in and North Africa made labor regulations of labor regulations (figure 4.4). OECD notice periods and severance payments. more flexible. FIGURE 4.4 FIGURE 4.5 Most reforms in Eastern Europe & Central Asia Top 4 reform features in Number of reforms increasing exibility of labor regulations employing workers by Doing Business report year Reforms including feature since DB2005 (%) DB2005 DB2006 DB2007 DB2008 DB2009 Eastern Europe 36% & Central Asia 19 Made working hours more exible (28 economies) OECD 29% high income 16 Eased restrictions on xed-term contracts (24 economies) Sub-Saharan 15% Africa 4 (46 economies) Reduced dismissal costs Latin America & Caribbean 3 11% (32 economies) Removed requirements for dismissals East Asia & Paci c 2 Note: A reform may include several reform features. (24 economies) Source: Doing Business database. South Asia (8 economies) 2 Middle East & North Africa 1 (19 economies) Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. FIGURE 4.1 FIGURE 4.2 Economies with rigid labor regulations have fewer business start-ups Rankings on employing workers Rigidity of employment are based on 4 subindicators EMPLoyING woRkERS 23 inCreasing flexibility in setting reduCing dismissal Costs notes hours and using ContraCts Ten economies granted businesses more Over the past 5 years 36 reforms have flexibility in dismissals during economic 1. This example is from the World Bank's been aimed at increasing flexibility in downturns. But 15 economies (including Doing Business: Women in Africa working hours and the use of fixed-term Bolivia, Fiji, Kazakhstan and Zimbabwe) (2008a), a collection of case studies of African entrepreneurs. contracts (figure 4.5). Five reforms have made such dismissals costlier or more 2. Amin (forthcoming). made scheduling working hours more difficult. In Bolivia and Venezuela an 3. Almeida and Carneiro (forthcoming). difficult. Nine have restricted the use of employer cannot let workers go for eco- 4. ILO Convention 14 on weekly rest (in- fixed-term contracts. nomic reasons without their consent. dustry), ILO Convention 171 on night Most of the reforms aimed at in- Under these circumstances employers work, ILO Convention 132 on holidays creasing flexibility in working hours took might think twice before hiring a new with pay and ILO Convention 158 on place in Eastern Europe and Central worker. termination of employment. Asia. These reforms, concentrated in High dismissal costs can deter em- 5. Data on the share of the labor force 2004 and 2005, allowed more flexible ar- ployers from creating jobs in the formal covered by unemployment insurance, from Clasen and Viebrock (2008), are for rangements for overtime and permitted sector. That argues for reducing dismissal 2002. businesses to shift working hours from burdens. But excessive flexibility leads to 6. Eurobarometer (2006). the low to the high season. In Latvia and another problem: concern among exist- 7. Djankov and Ramalho (2008). A 10- Poland working hours must balance out ing employees about losing their jobs point increase in the rigidity of em- within 4 months; in Hungary, within a and being left without a safety net. ployment index is associated with an year. Overtime hours have become more One solution is to offer unemploy- increase of 0.9% of GDP in the size of the informal sector. predictable for employees, and employ- ment insurance rather than severance 8. Djankov and Ramalho (2008). ers can more easily adjust to cyclical de- pay. In Austria employers contribute to 9. Feldmann (2008). mand. Elsewhere in the world, Pakistan a fund from which they may withdraw eased limits on overtime, while Uganda if a worker is made redundant after 3 10. Kaplan (forthcoming). The study uses data from the World Bank Enterprise allowed employers and employees to years of employment. In St. Kitts and Surveys, available at freely set the legally required rest day. Nevis severance payments are made http://www.enterprisesurveys.org. Bhutan eased restrictions on night work. from a government-administered fund 11. Van Stel, Storey and Thurik (2007) and Sixteen economies allowed greater that employers pay into over time. In Ardagna and Lusardi (2008). flexibility in the use of fixed-term con- Italy employers deposit a portion of each 12. Aghion and others (forthcoming). tracts. In Azerbaijan and Burkina Faso, employee's salary into a designated fund 13. Besley and Burgess (2004). for example, fixed-term contracts can over the course of the employment rela- 14. Wangda (forthcoming). now be used for permanent tasks. Lat- tionship. In Korea employers adopting via and Togo extended their maximum the new defined contribution plan will duration. That makes it easier for both contribute 1 month's salary annually to employers and employees to adapt work each employee's private pension account. arrangements to their needs. Chile adopted a successful unem- ployment insurance system in 2002. The reform introduced individual savings ac- counts to which both employee and em- ployer contribute. It also reduced sever- ance pay from 30 working days to 24 for each year worked. Unemployed Chilean workers receive benefits from their indi- vidual savings accounts for 5 months. 24 DoING BUSINESS 2009 overview Starting a business FIGURE 5.1 Top 10 reformers in registering property FIGURE 5.3 Dealing with construction permits Easing property registration in Rwanda Employing workers Average improvement Registering Reduction in time and cost, 2007­08 2007 NO 21% 26% 1. Belarus property Time per procedure (days) CHANGE 2. Rwanda 2008 46% 240 3. Azerbaijan Total time 4. Kazakhstan cut from 5. Hungary 180 Getting credit371 days to 315 Protecting investors 6. Zambia Paying taxes 7. Mauritius 120 8. Burkina Faso Trading across borders Time cut 35-day from 60 days 9. Madagascar 60 Enforcing contracts procedure to 10 10. Egypt NO Closing a business eliminated CHANGE NO CHANGE Procedures Time Cost 1 2 3 4 5 Procedures Source: Doing Business database. Cost (% of property value) Ida, a Gambian entrepreneur, wants to used to be another. But in 2005 it elimi- dures and 2 days. In Georgia and Lithu- 8sell her plot of land to expand her manu- nated the requirement for approval by ania, which recently simplified proce- facturing business. She has found an Cost cut from 6.1% to 0.3% Total cost the Ministry of Urban Planning. That FIGURE 5.1 dures, it takes 3 days to register property. 6interested buyer. But she has also learned cut from slashed the time required to register Top 10 reformers in registering property FIGURE 5.3 9.4% to 0.6% InFIGURE Zealand, number 3 on the ease of New5.2 that transferring property in The Gambia Easing property registration in Rwanda Procedure 2007 Average improvement property from 397 days to 62--and the registering property, online registration Rankings on registering property 4requires the consent of the Department Reduction in time and cost, 2007­08 and cost 2007 isarestraightforward. In Slovakia, which based on 3 subindicators eliminated number of property transfers in Abidjan of Lands and Surveys--and gettingNOthat almost quadrupled, from 500 in 2005 to 21% 26% replaced a percentage-based fee with a Days to transfer property 1. Belarus As % of property value, between 2 companies 2. Rwanda no bribes included 2takes about a year. There is another op- Time per procedure (days) CHANGE 1,968 in 2007.1 2008 46% fixed fee, the cost to register property is in main city tion: hire a lawyer2008 connections at 240 3. Azerbaijan Total time with Formal property titles help promote only 0.05% of the property value. 4. Kazakhstan the department and obtain4the consent cut from 33.3% 33.3% in a day. But371IdaProcedures afford the cost, the transfer of land, encourage invest- 5. Hungary 180 1 2 days to3315 5 cannot ment and give entrepreneurs access to who reformed inCost 6. Zambia Time 2007/08? Source: Doing Business database. about 3% of the value of her property. formal credit markets.2 But a large share 7. Mauritius Ida decides to wait for theTime 120 department's cut of property in developing countries is Twenty-four economies made it easier to 8. Burkina Faso 33.3% consent, putting on hold her plans to 35-day from 60 days not formally registered. Informal titles register propertyProcedures 9. Madagascar in 2007/08 (table 5.2). expand herprocedure 60 to 10 10. Egypt NO eliminated business. cannot be used as security in obtaining The most popular reform feature: lower- CHANGE Besides The Gambia, 11 other econ- NO CHANGE loans,Procedures which limits financing opportuni- Time Cost ing the cost of registration by reducing Steps for encumbrance checking, deed and title transfer omies1still require a 3ministerial consent 2 4 5 ties for businesses. Many governments theuntilproperty transfer tax, registration property can be sold again or used as collateral to transfer property: Lesotho, Madagas- Procedures have recognized this and started ex- fees or stamp duty. Five economies-- Source: Doing Business database. Note: See Data notes for details. car, Malawi, Nigeria, Papua New Guinea, Cost tensive property titling programs. But Burkina Faso, the Dominican Republic, Senegal, Solomon Islands, Tanzania, (% of property value) bringing assets into the formal sector Jamaica, Serbia and Thailand--reduced FIGURE 5.4 Tonga, UgandaCost Zambia. CôteTotal 8 FIGURE 5.5 Africa has reformed the most andcut from d'Ivoire is only part of the story. The more dif- Top 5 reform features the transfer tax. The Republic of Congo 6.1% to 0.3% cost Table 5.1 cut from ficult and costly it is to formally transfer in registering property 6 Number of reforms easing property registration Where is registering property easy--and 9.4% to 0.6% by Doing Business report year property, the greater the chances that Reforms including feature since DB2006 (%) FIGURE 5.2 4 formalized titles will quickly become in- DB2008 DB2009 Rankings on registering property Sub-Saharan whereandProcedure not? DB20062007 DB2007 cost are based on 3 subindicators 47% Africaeliminated Easiest RAnK Most difficult RAnK formal again. Eliminating unnecessary 31 Reduced taxes or fees Days to transfer property As % of property value, (46 economies) Saudi Arabia 1 Liberia 172 obstacles to registering and transferring between 2 companies no bribes included 2 in main city Eastern Europe Georgia 2 Angola 173 property is therefore important for eco- 19% &new Zealand Central Asia 3 2008 Afghanistan 174 nomic development.23 Computerized procedures (28 economies) Lithuania 33.3% 33.3% 1 2 4 3Bangladesh4 5 175 Economies that score well on the Latin America Armenia 5 Procedures nigeria 176 Cost &Thailand ease of registering property tend to have 19%Time Source: Doing Business database. Caribbean 13 (32 economies) 6 Brunei 177 Increased administrative e ciency Slovakia 7 Maldives 178 simple procedures, low transfer taxes, 33.3% Middle East & fixed registration fees, online registries Procedures North Africa norway 8 Marshall Islands 9 179 16% (19 economies) Azerbaijan 9 Micronesia 180 and time limits for administrative proce- Combined and reduced procedures OECD Sweden 10 Timor-Leste 181 dures. They also make the use of notaries Steps for encumbrance checking, deed and title transfer high income Note: Rankings are the average of the economy rankings on the 8 and lawyers optional. Saudi Arabia com- until12% property can be sold again or used as collateral (24 economies) procedures, time and cost to register property. See Data notes puterized procedures in 2007, making it for details. Introduced fast-track procedures or time limits Note: See Data notes for details. South Asia Source: Doing Business database. possible to register property in 2 proce- (8 economies) 5 Note: A reform may include several reform features. Source: Doing Business database. East Asia FIGURE 5.4 FIGURE 5.5 & Paci c Africa has reformed2the most Top 5 reform features REGISTERING PRoPERTy 25 Table 5.2 had the most reforms in property regis- Reducing the cost to register property--the most popular reform feature in 2007/08 tration. Azerbaijan introduced a one-stop Reduced taxes or fees Burkina Faso, Republic of Congo, Dominican shop and gave the State Registry of Real Republic, Jamaica, Madagascar, Rwanda, Serbia, Estate sole responsibility for all property Thailand registrations in the country. That re- Combined and reduced procedures Azerbaijan, Belarus, Georgia, Kazakhstan, Latvia, quired amending the civil code in April Lithuania, Mauritius 2006. Before, entrepreneurs had to reg- Computerized procedures Belarus, Bosnia and Herzegovina, Georgia, ister land and buildings separately. This Madagascar, Saudi Arabia, Zambia meant going through 7 lengthy proce- Sped procedures in the registry Bangladesh, Egypt, former Yugoslav Republic of dures, including getting clearances from Macedonia, Madagascar, Sierra Leone 2 agencies and an updated inventory file Introduced time limits Belarus, Egypt, Senegal from the Bureau of Technical Inventory Introduced fast-track procedures Azerbaijan, Hungary listing the property's boundaries and Allowed private valuers to complete valuations Republic of Congo technical features. Those requirements are gone. With the new option of expe- Source: Doing Business database. diting 2 of the 4 remaining procedures, and Rwanda reduced registration fees. back and today is like night and day. it is now possible to register property in Madagascar eliminated the stamp duty. From waiting in long lines taking up only 11 days. Belarus was the top reformer in to a few months, we went to a modern, Kazakhstan followed a similar path. property registration. The government efficient one-stop shop. They even have By launching public service centers-- had initiated the creation of a one-stop a webcam in the one-stop shop to check local one-stop shops--Kazakhstan sim- shop in March 2004. In early 2006 the the waiting line," says Alexander, a sea- plified property registration in its major legal changes necessary for the one-stop soned entrepreneur in Minsk. cities. Georgia, a repeat reformer for 4 shop to become operational took ef- Rwandawastherunner-upreformer. years in a row, launched an electronic fect. To complete its implementation A presidential decree in January 2008 re- database. Registrars can now obtain a and to address remaining bottlenecks placed a 6% registration fee with a flat business registry extract, nonencum- at the Land Registry, the government rate of 20,000 Rwanda francs (about $34), brance certificate and cadastral sketch launched a broad administrative simpli- regardless of the property value. Before, online. Before, these documents could fication program in November 2007. The the 6% registration fee applied to every be obtained only by visiting several dif- program introduced strict time limits, property transaction, and the Rwanda ferent agencies. computerized the registry and digitized Revenue Authority had to value the prop- Bosnia and Herzegovina was an- property records. The government's am- erty, which took 35 days on average. Reg- other notable reformer. The time needed bitious reform agenda paid off: the time istering property in Kigali now requires to register a title in Sarajevo fell by 203 to register property in Minsk fell from only 4 procedures and less than 1% of the days, from 331 to 128. Once the registry 231 days to 21. Belarus now ranks among property value (figure 5.3). Yet with the is fully computerized (80% of its files the top 25 economies on the ease of reg- process still taking almost a year on aver- were as of mid-2008), the time is ex- istering property. age, there is room for improvement. pected to drop even more. The former "Comparing the registry a few years Eastern Europe and Central Asia Yugoslav Republic of Macedonia sped Table 5.3 Who regulates property registration the least--and who the most? Procedures (number) Time (days) Cost (% of property value) Fewest Most Fastest Slowest Least Most norway 1 Greece 11 new Zealand 2 Bangladesh 245 Saudi Arabia 0.00 Congo, Rep. 16.48 Sweden 1 Swaziland 11 Saudi Arabia 2 Afghanistan 250 Bhutan 0.01 Cameroon 17.79 Bahrain 2 Eritrea 12 Sweden 2 Togo 295 Georgia 0.03 Central African Republic 18.55 Georgia 2 Uzbekistan 12 Thailand 2 Solomon Islands 297 Belarus 0.04 Mali 20.31 Lithuania 2 Ethiopia 13 Georgia 3 Rwanda 315 Slovakia 0.05 Senegal 20.61 netherlands 2 Liberia 13 Lithuania 3 Angola 334 Kiribati 0.06 Comoros 20.82 new Zealand 2 Uganda 13 norway 3 Gambia, The 371 Kazakhstan 0.08 nigeria 21.93 oman 2 Algeria 14 Armenia 4 Slovenia 391 new Zealand 0.09 Chad 22.72 Saudi Arabia 2 Brazil 14 Iceland 4 Haiti 405 Russian Federation 0.20 Zimbabwe 25.01 Thailand 2 nigeria 14 Australia 5 Kiribati 513 Qatar 0.25 Syria 28.05 Source: Doing Business database. 26 DoING BUSINESS 2009 FIGURE 5.1 Top 10 reformers in registering property FIGURE 5.3 Easing property registration in Rwanda Average improvement Madagascarwasanotherreformerin bean, Jamaica introduced a new law in Reduction in time and cost, 2007­08 2007 the region. A new financial law abolished May 2008 reducing the transfer tax from NO the mandatory stamp duty and 2 taxes, 21% 26% 7.5%Belarus property value to 6%, and 1. of the Time per procedure (days) CHANGE the2.stamp duty from 5.5% to 4.5%. The Rwanda 2008 reducing the cost of transferring prop- 46% 240 cost to transfer property dropped from 3. Azerbaijan Total time erty from 11.6% of the property value to 13.5% of the property value to 11%. The 4. Kazakhstan cut from 7.5%. Madagascar did not stop there. It Dominican Republic reduced the trans- 5. Hungary 180 371 days to 315 reorganized its registry by expanding the fer6.tax from 4.3% to 3%. Transferring Zambia number of offices, purchasing new com- 7. Mauritius 120 Time cut puters and hiring more staff. Transfer- property now costs 3.8% of the property 8. Burkina Faso 35-day from 60 days ring property in Antananarivo now takes value, down from 5.1%. 9. Madagascar 60 procedure to 10 10. In East Asia and Pacific, Thailand Egypt NO 8 weeks less than it did a year before. eliminated CHANGE NO Burkina Faso abolished the requirement reduced the transfer fee from 2% to CHANGE to obtain the municipality's approval for Procedures Time Cost 0.01% and the specific business tax from 1 2 3 4 5 Procedures property transactions, cutting the time Source: Doing Business database. 3.3% to 0.11%, cutting the overall cost Cost by 46 days, from 182 to 136. to transfer property from 6.3% of the (% of property value) In the Middle East and North Africa, property value to 1.13%. Thailand now 8 Egypt and Saudi Arabia reformed. Egypt ranks among the top 10 economies on Cost cut from 6.1% to 0.3% Total cost simplified administrative procedures and the ease of registering property. The cost cut from 6 9.4% to 0.6% introduced time limits. That cut the time reductions are provisional and valid for FIGURE 5.2 Procedure 2007 to register property by 4 months, from one year from March 2008, to allow the Rankings on registering property 4 and cost Thai government to assess the results of are based on 3 subindicators eliminated 193 days to 72. Saudi Arabia introduced a comprehensive electronic system to the reform in April 2009.As Days to transfer property % of property value, between 2 companies no bribes included 2 register title deeds at the First Notary in main city 2008 Public Department in Riyadh, making it what are the reform trends? 33.3% 33.3% 1 2 3 4 5 possible to transfer property in 2 proce- Procedures dures and 2 days. Almost 60% ofTime property registration all Cost Source: Doing Business database. Here is how the process works: A reforms recorded by Doing Business in notary public at the First Notary Pub- the past 4 years took place in 2 regions: 33.3% the process at the cadastre by adding lic Department, in the presence of the Africa and Eastern Europe and Central Procedures staff. Lithuania cut a procedure by in- legal representatives of the buyer and Asia (figure 5.4). In 2005 Eastern Europe troducing special software that allows seller, first verifies that all documents are and Central Asia had the most reforms. Steps for encumbrance checking, deed and title transfer notaries to obtain the real estate transac- complete. The notary public then trans- Inuntil 2006 and 2007 Africa took the lead. property can be sold again or used as collateral tion certificate from their office. Before, fers them electronically to the Records InNote: 2007/08 Eastern Europe and Central See Data notes for details. the buyer had to pick up this certificate Department, which prepares a new title Asia led with 9 reforms, closely followed at the registry. deed showing the buyer as the owner of by Africa with 8. FIGURE 5.4 FIGURE 5.5 Africa has reformed the most Africa saw the second largest num- the property. The new title deed is imme- Top 5 reform features ber of reforms. The Republic of Congo Number of reforms easing property registration diately added to the electronic records of in registering property lowering Costs adopted a new law on May 11, 2007, that by Doing Business report year all title deeds in Riyadh. After a few hours Reforms including feature since DB2006 (%) Across regions, the most popular re- Sub-Saharan cut the registration fee byDB percentage DB2006 102007 the representatives of the buyer and seller DB2008 DB2009 form feature has been reducing property 47% Africa points. Transferring property used to take appear a second time before the notary 31 Reduced taxes or fees transfer taxes and fees--registration fees, (46 economies) 137 days and cost 27% of the property public, who prints a copy of the new title notary fees and stamp duties (figure 5.5). Eastern Europe value. Now it takes 116 days and costs deed and asks the representatives and In 2005 and19% 2006 such reductions were & Central Asia Computerized procedures (28 economies) about 17% of the property value. Senegal 2 witnesses to sign23the sale agreement, made by 7 of 10 reforming economies. Latin America introduced time limits at the Land Reg- which is a standard form. The signed sale Big cuts were made in Africa. In 2004 the & Caribbean istry to speed the delivery of certificates 13 agreement is scanned and saved in the region had19% highest average cost for the (32 economies) and the registration of property transac- electronic records, while the original is Increased administrative e ciency property transfer, at around 13% of the Middle East & tions. That reduced the time to register kept in the notary public's files. property 16% value. Today the average cost North Africa 9 (19 economies) property from 145 days to 124. In South Asia, Bangladesh halved Combined and reduced procedures is 10.5% of the property value--much OECD Zambia computerized its land reg- the time to apply for registration at the lower, though still higher than the 6% high income istry and set up a customer8service Municipal Deed Registry Office, from in Latin America, the region with the 12% (24 economies) center to eliminate the backlog of reg- 360 days to 180. The total time to register Introduced fast-track procedures or time limits second highest cost. South Asia istration requests. The time to register property dropped from 425 days to 245. Many economies have reduced the (8 economies) property fell from 70 days5to 39. In Latin America and the Carib- Note: A reform may include several reform features. cost of property registration by estab- Source: Doing Business database. East Asia & Paci c 2 (24 economies) Steps for encumbrance checking, deed and title transfer until property can be sold again or used as collateral Note: See Data notes for details. REGISTERING PRoPERTy 27 FIGURE 5.4 FIGURE 5.5 Africa has reformed the most Top 5 reform features Number of reforms easing property registration in registering property by Doing Business report year Reforms including feature since DB2006 (%) DB2006 DB2007 DB2008 DB2009 Sub-Saharan 47% Africa 31 Reduced taxes or fees (46 economies) Eastern Europe 19% & Central Asia 23 Computerized procedures (28 economies) Latin America & Caribbean 13 19% (32 economies) Increased administrative e ciency Middle East & North Africa 9 16% (19 economies) Combined and reduced procedures OECD high income 8 12% (24 economies) Introduced fast-track procedures or time limits South Asia (8 economies) 5 Note: A reform may include several reform features. Source: Doing Business database. East Asia & Paci c 2 (24 economies) Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. lishing a low fixed registration fee rather time to register property drop by 45% how to reform than charging entrepreneurs a percent- on average. In El Salvador, which com- Some reforms to ease property regis- age of their property value. In 2005 puterized its registry in 2006, the time to tration, such as eliminating unneces- Slovakia abolished its 3% real estate register property fell from 52 days to 33. sary procedures or reducing the num- transfer tax and set a low fixed fee for Portugal computerized the Lisbon real ber of approvals required, can be done expedited registration at 8,000 koruny estate registries in 2007, reducing the quickly--once everyone is convinced ($286). In 2007 Egypt and Poland ad- time from 81 days to 42. Computerizing of the benefits. Such reforms usually opted similar reforms. And in 2007/08 records not only facilitates registration require no drastic changes in the legis- Rwanda followed suit. This reform tends but also improves the preservation of lation and can be executed administra- to reduce fraud in reporting the market the records and, as a result, the security tively. In previous years such economies value of property and increase tax rev- of titles. as Côte d'Ivoire, Georgia and Ghana have enue. Six months after Egypt replaced Digitizing the property registry's re- reduced the time required to register its 3% registration fee with a fixed fee of cords and facilitating electronic access property by eliminating long and unnec- 2,000 Egyptian pounds ($323), revenues can improve things, but this alone is often essary procedures. rose by 39%.3 not enough. In 2005 Honduras launched Inspiration can sometimes be found a reform aimed at allowing every entre- at home. Doing Business subnational Computerizing the registry preneur online access to the registry's studies have shown that local authori- One of the most popular reform features information. But online access did not ties, federal and municipal, learn from has been computerizing the registry and resolve the many inconsistencies in in- one another to improve registration pro- introducing online procedures that aid formation between the registry and the cesses, even if they share the same legal interaction between the notary and the cadastre. To do this, the 2 agencies must and regulatory framework. This process registry. Computerization can be costly, be coordinated, and the cadastre updated was at work in Mexico, where Aguas- so it is not surprising that more than regularly.4 Comayagua, 80 kilometers calientes followed Yucatán's experience half of such reforms have been in East- northwest of Tegucigalpa, is the only city in simplifying the registration process ern Europe and Central Asia and OECD in Honduras that has completely digitized and reducing fees at the land registry. In high-income economies. its property registry's records, thanks to 2007/08 San Luis Potosí and Chiapas fol- Computerizing registries has proved an updated digital cadastre. lowed Aguascalientes's example of intro- to be highly effective. The economies that ducing a bar code to allow computerized have done so since 2005 have seen the tracking of property records.5 28 DoING BUSINESS 2009 Other reforms, such as overhauls of notes the entire property registration system, can take years. Consider the top reformer 1. Data on property transfers in Abidjan in property registration for 2007/08. Be- are from Côte d'Ivoire, Direction du Do- larus passed the law establishing its one- maine, de la Conservation Foncière, de l'Enregistrement et du Timbre. stop shop in March 2004. Making the 2. Miceli and Kieyah (2003). one-stop shop operational took another 3. Haidar (2008). 3.5 years and several presidential de- 4. Coma-Cunill and Delion (2008). crees. The previous year's top reformer, Ghana, has been working for more than 5. Cruz-Osorio and Enrigue (2008). 4 years to complete the transition from a 6. Hacibeyoglu (2008). deeds registration to a title registration system. Entrepreneurs in Accra can now register a title in 34 days. In other parts of the country the same process still takes months.6 Shifting from a deeds system to a title system is also taking time in Hong Kong (China), which launched this re- form in July 2004. The reform is still under way as the government continues to work on such legal issues as how it will indemnify users for errors and how the system will deal with third-party claims. FIGURE 6.1 Cambodia leads in legal rights reform, Albania and the United Arab Emirates top reform GET TING CREDIT 29 in credit information overview Strength of legal rights index (0­10) Starting a business Depth of credit information index (0­6) FIGURE 6.1 10 Dealing with construction permits Cambodia leads in legal rights reform, Albania and the United Arab Emirates top reform in credit information Employing workers 2008 Strength of legal rights index (0­10) Depth of credit information index (0­6) Registering property 8 10 Getting credit 2008 6 +3 68 +9 Protecting investors +3 +2 4 46 6 Paying taxes +3 +9 +3 Trading across borders +3 2 24 +4 +2 4 Enforcing contracts +3 +3 +3 Closing a business 0 2007 02 2 +4 Cambodia Guatemala Vanuatu China Albania United Ukraine Uzbekistan +3 +3 Arab Emirates Source: Doing Business database. 0 2007 0 Cambodia Guatemala Vanuatu China Albania United Ukraine Uzbekistan Arab Emirates Source: Doing Business database. FIGURE 6.4 FIGURE 6.5 Collateral reform--East Asia & Paci c rapidly moving forward Top 5 reform features in legal rights Sibongile was meant to fly. "I grew up Number of reforms strengthening legal rights Russian Federation. "I remember wait- Reforms including feature since DB2006 (%) ity and accessibility of credit informa- near an Air Force base and always had a by Doing Business report year FIGURE 6.4 FIGURE so Eastern Europe love for planes," she says, remembering a DB2006 Collateral reform--East AsiaDB Paci c rapidly moving forward ing for days at the airport for&2009ofplane the tion available through public and private to arrive, panickingDBthat after payingreforms credit registries (figure 6.2). DB2007 2008 Number 53% Top 5 strengthening legal rights Reform Business report year Allowed out-of-court enforcement of collateral & Central Asia childhood spent waving at jets at South much money and risking people's savings Both creditor protection through (28 economies) Africa's Hoedspruit base. it may not arrive." But all went well in the DB2006 12by Doing the legal system andDBcredit registries are DB2007 2008 DB47% 2009 Eastern Europe associated with higher ratios of private Allowed East AsiaAfter a successful 7-year career in & Central Asia end, and Sibongile's business took off.1 Expanded range of revolving movable assets12 & Paci c Where collateral laws are effective 8 that can be used as collateral credit to GDP. For example, an increase (24 economies) human resources, Sibongile seized the (28 economies) opportunity presented by the passage of East Asia and credit registries are present, banks of 1 in the creditors' 35% rights index is as- OECD Expand high income South Africa's Black Economic Empow- & Paci c Created a uni ed 8registry for movable property sociated with a 6.5 percentage point in- that can (24 economies) are more7 likely to extend loans. Hong (24 economies) erment Act in 2003: she started her own Kong (China), Singapore and Kenya fa- crease in the average annual growth rate Latin America business, SRS Aviation. Opportunities for OECD 21% high income cilitate access to credit through laws that of the private-credit-to-GDP ratio in the Created & Caribbean 7 3 (24 economies) Gave priority to secured creditors'claims (32 economies) government contracts came quickly, but allow all types of assets to be used as outside and inside bankruptcy procedures 3 years after the reform relative to the 3 getting financing was difficult. "I took Latin America collateral and do not require a specific years before.2 South Asia & Caribbean 3 9% Gave pr (8 economies) the government tender to the bankers," 3 (32 economies) description of the collateral or obligation. Exempted secured creditors'claims Research shows that introducing a says Sibongile. "Forget it, they said. Be- They also have unified collateral regis- outside from an automatic stay in reorganization credit registry is associated with an in- 9% Sub-Saharan cause the amount of money was too large South Asia tries and allow out-of-court enforcement 3 Note: A reform may include several reform features. crease of 4.2 percentage points in firms' Africa Exempt (46 economies) and the collateral too1small." (8 economies) of security rights. Source: Doing Business database. reliance on credit.3 This is in part be- from an Middle East & Sibongile ended up using her fam- Sub-Saharan In Canada, El Salvador, Georgia, cause introducing registries increases the Note: A re North Africa ily's savings, 0along with her mother's Africa 1 (46 economies) Korea, Peru, Saudi Arabia and the United repayment rate: borrowers become less Source: Do (19 economies) and aunt's retirement funds, to finance Middle East & States credit registries record and make willing to default, since defaults can pre- Note: A reform is counted as 1 reform per reforming economy per year. the first deal: leasing a plane from the North Africa available historical credit information on 0 vent future loans. In developing econo- Source: Doing Business database. (19 economies) all bank loans--as well as credit from Table 6.1 Where is getting credit easy-- Note: A reform is counted as 1 reform per reforming economy per year. utilities and retailers--for both individu- FIGURE 6.2 Source: Doing Business database. FIGURE 6.3 and where not? als and companies. The registries also Rankings on getting credit are based Private credit bureaus provide more comprehensive services to lenders Easiest RAnK Most difficult RAnK make available both positive information on 2 subindicators FIGUR Regulations on Malaysia 1 Bhutan 172% Rank credit bureaus ofFIGURE private (such6.3 loan amounts and on-time pay- as % of public registries nonpossessory 33%62.5% 33% on 2 Service provided Hong Kong, China 2 Djibouti 0 173 25 Private credit bureauscredit75 ment patterns) and negative information 50 provide more comprehensive services to lendersStrength 100 security interests of legal Lists both individuals 34and rms South Africa Eritrea 174 (such as late payments and defaults).% of private in movable % of public rights index (0­10) Regul nonpo United Kingdom Madagascar 175 And they allow borrowers to0inspect andcreditproperty bureaus credit registries 25 50 75 37.5% 100 securi Distributes both positive Australia 5 Tajikistan 176 Service provided in mo and negative information Depth33%credit of Lists both individuals and rms dispute their information. Bulgaria 6 Yemen 177 Doing Business measures the legal information index prope Distributes data on all7loans Afghanistan Israel 178 (0­6) below 1% of income per capita Distributes both positive new Zealand 8 Syria 179 and negative information rights of borrowers and lenders and the Scope, quality and accessibility Guarantees that borrowers Timor-Leste Singapore 9 180 Distributes data on all loans scope and quality of credit information can inspect data of credit information through public United States 10 Palau 181 below 1% of income per capita systems. The first set of indicators de- and private credit registries Distributes more than Scope Guarantees that borrowers scribes how well collateral and bank- 2sum Note: Rankings on the ease of getting credit are based on the years of historical data of cre of the strength of legal rights index and the depth of credit can inspect data ruptcy laws facilitate lending. The second Note: Private bureau coverage and public registry coverage do not count for the rankings. See Data notes for details. and p Distributes data from retailers, information index. See Data notes for details. trade creditors or utilities Source: Doing Business database. Distributes more than set measures the coverage, scope, qual- 2 years of historical data Note: P do not Source: Doing Business database. Distributes data from retailers, trade creditors or utilities 30 DoING BUSINESS 2009 mies the repayment rate can increase who reformed in 2007/08? collateral. Vanuatu passed a new secured by up to 80% when a credit registry transactions law, the Personal Property starts operation. Small firms benefit the Cambodia's new secured transactions law Securities Act. China revised its property most: in transition economies that intro- made it the top reformer in getting credit law to allow borrowers to use a variety duced new credit registries, their access in 2007/08. Albania was the runner-up of revolving assets and a combined set to credit grew twice as fast as that of reformer. It created a new public credit of assets (such as raw material, produc- large firms.4 registry with full information on loans of tion equipment and finished goods) as Strengthening the legal rights of all sizes, for individuals and for firms. collateral. The new law is expected to borrowers and lenders allows businesses Before the new law took effect in put into circulation more than $2 trillion to invest more in new technologies. One Cambodia, business owners could use worth of movable assets.7 Taiwan (China) recent study finds that economies that only immovable property as collateral. amended its civil code to allow parties score higher on creditor protections have With little land under private owner- to a pledge agreement to set the loan newer airplanes.5 Beyond that, their air- ship, getting a loan was an unreachable amount as a maximum line of credit. lines invest in better safety and commu- dream for most small to medium-size In South Asia, Sri Lanka exempted nication technologies. Why? Part of the businesses. The new law changed that. secured creditors from automatic sus- reason is that where strong protections Cambodian entrepreneurs can now use a pension of enforcement procedures in are lacking, creditors offer only leasing, broad range of movable assets to secure court during bankruptcy. not loans. So in economies with weak a loan. That includes revolving assets Georgia amended its civil code in creditor protections, most planes are such as inventory and accounts receiv- June 2007 to allow parties to agree that leased, and airline owners have less in- able. A general description of collateral collateral can be sold without court in- centive to upgrade their safety features. suffices in loan agreements, permitting tervention. Guatemala passed a law in New evidence suggests that estab- such wording as "all assets" or "all mov- October 2007 establishing a special re- lishing strong legal rights and new credit able property" of the borrower. Thanks gime for registering security interests registries may also reduce income in- to these and other provisions of the law, in movable property. The law went into equality.6 One possible explanation is Cambodia's score on the strength of legal effect in January 2008. that these changes allow more entrepre- rights index shot up from 0 to 9. Twenty-seven economies reformed neurs to expand their business. Borrow- Three other economies in East Asia their credit information systems in ing money from the bank becomes more and Pacific--Vanuatu, China and Tai- 2007/08, improving the quality and scope about their creditworthiness--and less wan (China)--also made it easier for of information collected and distributed about whom they know. businesses to use movable property as by credit registries and bureaus (table 6.2). Uzbekistan created both a public Table 6.2 credit registry and a private credit bu- More credit information, more access--popular reform features in 2007/08 reau. Albania, Liberia and Montenegro Provided online access to credit registry Cameroon, Central African Republic, Chad, Republic launched new public credit registries-- of Congo, Equatorial Guinea, Gabon, Sri Lanka, and in Montenegro the coverage of bor- West Bank and Gaza rowers went from 0 to 26% of the adult Expanded set of information collected in Azerbaijan, Belarus, Georgia, Kazakhstan, Mauritius, population. Ukraine and the United Arab credit registry Sri Lanka, Tunisia, Vietnam Emirates each set up a private credit bu- Introduced regulations guaranteeing Belarus, Egypt, Georgia, Indonesia, former Yugoslav reau. Zambia is doing so. that borrowers can inspect data in credit registry Republic of Macedonia, Morocco, Tunisia Six more economies in Eastern Eu- Established new credit registry or bureau Albania, Liberia, Montenegro, Ukraine, United Arab rope and Central Asia introduced credit Emirates, Uzbekistan information reforms, bringing the total Expanded range of revolving movable assets Cambodia, China, Guatemala, Vanuatu that can be used as collateral to 10, the most of any region. Georgia now distributes a full range of infor- Allowed out-of-court enforcement of collateral Georgia, Guatemala, Vanuatu mation, including on-time repayment Allowed maximum rather than specific amounts Cambodia, Taiwan (China) patterns and outstanding loan amounts. in debt agreements Coverage has increased 20 times. Ka- Gave priority to secured creditors' claims Cambodia, Vanuatu zakhstan's private credit bureau is adding outside and inside bankruptcy procedures new suppliers of information at a rate of Exempted secured creditors' claims from Cambodia, Sri Lanka 2 a month. Prominent among them are an automatic stay in reorganization nonbank institutions such as retailers Created a unified registry for movable property Cambodia and utility companies. Coverage has shot Source: Doing Business database. up by 80%. Moldova passed a new law to (19 economies) Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. GET TING CREDIT 31 FIGURE 6.2 FIGURE 6.3 guaranteeing borrowers access to their Rankings on getting credit are based Private credit bureaus provide more comprehensive services to lenders on 2 subindicators credit information. Egypt issued such % of private % of public Regulations on credit bureaus credit registries regulations for the private credit bureau. nonpossessory 33%62.5% 33% Service provided 0 25 50 75 100 Georgia amended its civil code with the security interests Strength of legal in movable index (0­10) Lists both individuals and rms same purpose. In therights property former Yugoslav 37.5% Distributes both positive Republic of Macedonia a new law on and negative information personal data protectionDepth33% guarantees that of credit information index Distributes data on all loans borrowers can review their data in the (0­6) below 1% of income per capita new public credit registry. In Belarus and Tunisia new laws allow individuals Scope, quality and accessibility Guarantees that borrowers can inspect data of credit information through public and firms to inspect their credit data in and private credit registries Distributes more than 2 years of historical data allNote: centralbureau bank offices. Morocco pub- coverage and public registry coverage do not count for the rankings. See Data notes for details. Distributes data from retailers, lishedPrivate new circulars guaranteeing that trade creditors or utilities borrowers can review their data in credit Source: Doing Business database. registries--and laying the groundwork for new private bureaus. facilitate the creation of a private credit cessible to banks online. That led to Other economies eliminated the bureau. Azerbaijan, Belarus and the for- exponential growth in coverage in Cam- minimum threshold for loans recorded mer Yugoslav Republic of Macedonia eroon, Chad, the Republic of Congo and in credit registries. Sri Lanka's private also reformed. Gabon. Sri Lanka's credit bureau and bureau started using a new online system The most popular credit informa- West Bank and Gaza's public credit reg- to collect data on all loans, regardless tion reform feature was providing online istry set up systems allowing banks to of value. Coverage grew threefold, to access to members. The regional public update information and obtain credit around 1.3 million individuals and firms. credit registry of the Central African reports online. Azerbaijan saw coverage more than dou- Monetary Union made information ac- Many economies issued regulations ble after eliminating its minimum loan cutoff of $1,100. So did Belarus, after Table 6.3 Who has the most credit information and the most legal rights for borrowers and abolishing its $10,000 cutoff. Mauritius lenders--and who the least? too eliminated its cutoff, of $3,000. Legal rights for borrowers and lenders (strength of legal rights index, 0­10) Tunisia now collects and distrib- Most Least utes more detailed information--both Hong Kong, China 10 Burundi 2 positive and negative--on borrowers. Kenya 10 Madagascar 2 Sri Lanka extended the length of time Malaysia 10 Rwanda 2 information is recorded from 1 year to Singapore 10 Afghanistan 1 2--and distributes positive information Australia 9 Bolivia 1 for 5 years. Indonesia now distributes 2 Bahamas, The 9 Djibouti 1 Cambodia 9 Syria 1 years of historical information. Vietnam Denmark 9 Timor-Leste 1 extended the period that data are distrib- new Zealand 9 Palau 0 uted from 2 years to 5. That helps explain United Kingdom 9 West Bank and Gaza 0 its 49% increase in coverage, to more Borrowers covered by credit registries (% of adults) than 8 million individuals and firms. Most Least Finland passed a new credit information Argentina 100 nepal 0.24 law that regulates the use of corporate Australia 100 Algeria 0.20 credit data. Canada 100 Djibouti 0.18 Two economies saw developments Iceland 100 Mauritania 0.17 that reduced the efficacy of their credit Ireland 100 Ethiopia 0.13 information systems. Indonesia's private new Zealand 100 Madagascar 0.07 norway 100 Yemen 0.07 credit bureau closed, unable to compete Sweden 100 nigeria 0.06 with the public registry (figure 6.3). And United Kingdom 100 Zambia 0.05 Burundi was forced to double the mini- United States 100 Guinea 0.02 mum cutoff for loans registered in the Note: The rankings on borrower coverage reflected in the table include only economies with public or private credit registries (129 in total). database to around $900, to cope with Another 52 economies have no credit registry and therefore no coverage. See Data notes for details. technical limitations and a sudden in- Source: Doing Business database. crease in loan transactions. 0 2007 0 Cambodia Guatemala Vanuatu China Albania United Ukraine Uzbekistan Arab Emirates Source: Doing Business database. 32 DoING BUSINESS 2009 FIGURE 6.4 FIGURE 6.5 Collateral reform--East Asia & Paci c rapidly moving forward Top 5 reform features in legal rights Number of reforms strengthening legal rights Reforms including feature since DB2006 (%) by Doing Business report year DB2006 DB2007 DB2008 DB2009 53% Eastern Europe Allowed out-of-court enforcement of collateral & Central Asia 12 (28 economies) 47% East Asia Expanded range of revolving movable assets & Paci c 8 that can be used as collateral (24 economies) 35% OECD high income 7 Created a uni ed registry for movable property (24 economies) Latin America 21% & Caribbean 3 Gave priority to secured creditors'claims (32 economies) outside and inside bankruptcy procedures South Asia 9% (8 economies) 3 Exempted secured creditors'claims from an automatic stay in reorganization Sub-Saharan Africa 1 Note: A reform may include several reform features. (46 economies) Source: Doing Business database. Middle East & North Africa 0 (19 economies) Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. FIGURE 6.2 FIGURE 6.3 whAt Are the reform trends? collateral and by allowing out-of-court year's top reformers--Cambodia, Gua- Rankings on getting credit are based Private credit bureaus provide more comprehensive services to lenders enforcement. temala and Vanuatu--did just that. Peru on 2 subindicators In the past 4 years 34 reforms have% of private Allowing parties to agree to pursue % of public introducedanewbillonguaranteesbased Regulations on on movable property in 2006. Now al- nonpossessory Strength of legal 33%62.5% 33% Service provided strengthened the legal rights0 of borrow-creditout-of-courtenforcementifthedebtorde- bureaus credit registries 25 50 100 security interests ers and lenders in 27 economies around faults has been the most75popular reform most any type of movable asset--tangible in movable rights index (0­10) Lists both individuals and rms the world--while 88 reforms have im- feature strengthening the legal rights of orproperty intangible, present or future--can Distributes both positive proved credit information systems in 61 borrowers and lenders (figure 6.5). The secure a loan, and assetsDepth33% no37.5% have longer and negative information of credit economies. ability to make such an agreement can to be described specifically. More than 20 information index Distributes data on all loans (0­6) below 1% of income per capita Eastern Europe and Central Asia persuade lenders wary of long court pro- different types of pledges were consoli- cedures to make a loan in the first place. dated into 1. The country's 17 collateral Scope, quality and accessibility Guarantees that borrowers has had the most reforms strengthening can inspect data the legal rights of borrowers and lend- Beyond India and Vietnam, economies registries have been combined as well.8 of credit information through public and private credit registries Distributes more than ers in the past 4 years, with a total of that have allowed such agreements in- The 88 reforms improving credit 2 years of historical data 12 (figure 6.4). Large emerging market clude Croatia, France, Ghana, Honduras, information in the past 4 years have Note: Private bureau coverage and public registry coverage do not count for the rankings. See Data notes for details. Distributes data from retailers, economies, with the exception of the the Kyrgyz Republic and Peru. shown clear results: worldwide, coverage trade creditors or utilities Russian Federation, also figure promi- Establishing a geographically uni- by credit registries more than doubled, to Source: Doing Business database. nently on the list of reformers. China fied collateral registry that covers sub- around 1.8 billion individuals and firms. was a repeat reformer in the past 2 stantially all movable property has been The fastest reforming region was Eastern years, broadening the range of movable another popular reform feature. Such a Europe and Central Asia (figure 6.6). Its assets that can be used as collateral. registry allows potential lenders to find average score on the depth of credit in- India reformed in 2 successive years out easily and with certainty whether formation index has more than doubled starting in 2006, establishing an online there are competing claims on the col- in the past 4 years--from 2.1 points collateral registry and expanding the lateral. India stands out among those to 4.4 out of a maximum of 6--and its availability of out-of-court enforcement. that have taken such a step. Its huge geo- coverage of borrowers has increased by Ukraine improved the standing of se- graphic area and large population make a factor of almost 5. That propelled the cured creditors in bankruptcy by giving its creation of an online, unified national region past Latin America and the Carib- their claims priority over labor and state database of security rights in movable bean, and it now ranks behind only the tax claims. Vietnam made it easier for assets a notable achievement. OECD high-income economies. entrepreneurs to get a loan by expanding Many economies passed new se- More than a quarter of the reforms the range of assets that can be used as cured transactions laws. Three of this in credit information involved setting up income income Source: Doing Business database. GET TING CREDIT 33 FIGURE 6.6 FIGURE 6.7 A third of credit information reforms in Eastern Europe & Central Asia Top 5 reform features in credit Number of reforms easing credit information sharing information by Doing Business report year Reforms including feature since DB2006 (%) DB2006 DB2007 DB2008 DB2009 Eastern Europe 31% & Central Asia 30 Established new credit registry or bureau (28 economies) Middle East & 16% North Africa 16 Lowered minimum amount to register loans (19 economies) Sub-Saharan 16% Africa 15 (46 economies) Adopted regulations that guarantee borrowers the right to access their data Latin America & Caribbean 10 9% (32 economies) Started distributing data from retailers, East Asia trade creditors or utility companies & Paci c 7 5% (24 economies) Started distributing both positive South Asia and negative credit information (8 economies) 6 Note: A reform may include several reform features. Source: Doing Business database. OECD high income 4 (24 economies) Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. new registries: 19 economies saw the cre- reform possible in many cases was de- notes ation of private credit bureaus; 8 others veloping the information infrastructure set up new public credit registries (figure and shifting from a paper-based to an 1. This example is from the World Bank's 6.7). The biggest gains were in Eastern online system. Doing Business: Women in Africa (2008a), Europe and Central Asia, where nearly In the 8 economies private credit a collection of case studies on African entrepreneurs. half the economies established either a bureaus expanded the sources of credit 2. Djankov, McLeish and Shleifer (2007). public credit registry or a private credit information to nonfinancial institutions 3. Brown, Jappelli and Pagano (2008). bureau, followed by the Middle East and such as utilities (like mobile phone com- 4. Brown and Zehnder (2007). North Africa. panies) or retailers (like supermarkets In 20 economies reforms expanded and furniture stores). Such changes took 5. Benmelech and Bergman (2008). the range of credit information collected place in Bulgaria, Georgia, Kazakhstan, 6. Claessens and Perotti (2007). and distributed by public or private credit Kenya, Kuwait, Nicaragua, Saudi Arabia 7. World Bank (2007c). registries. In 13 of these, the public reg- and Trinidad and Tobago. Now people 8. Marechal and Shahid-Saless (2008). istry eliminated the minimum cutoff for with a cell phone but no bank loans can recording loans, more than quadrupling still build a credit history--particularly coverage on average. What made this important in poor economies. FIGURE 7.1 More investor protections associated with greater access for rms to equity markets and faster stock turnover Perceived di culty in access to equity 34 DoING BUSINESS 2009 overview Turnover of stocks traded (%) Most 75 di cult Starting a business FIGURE 7.1 Dealing with construction permits More investor protections associated with greater access for rms to equity markets 50 Employing workers and faster stock turnover Turnover of stocks traded (%) Registering property Perceived di culty in access to equity 25 Most 75 Getting credit di cult Protecting Least di cult 0 50 investors Least Most Least Most protection protection protection protection Economies ranked by Economies ranked by 25 strength of investor protection index, quintiles Least strength of investor protection index, quintiles Note: Relationships remain signi cant at the 5% level when controlling for income per capita. Economies are ranked on the perceived di culty Paying taxes di cult 0 in access to equity, with 131 being the most di cult. See Data notes for details. Trading across borders Least Most Least Most Source: Doing Business database; WEF (2007); World Bank, World Development Indicators database. Enforcing contracts protection protection protection protection Economies ranked by Economies ranked by Closing a business strength of investor protection index, quintiles strength of investor protection index, quintiles FIGURE 7.3 Note: Relationships remain signi cant at the 5% level when controlling for income per capita. Economies are ranked on the perceived di culty FIGURE 7.4 Accelerating reforms in Eastern Europe & Central Asia in access to equity, with 131 being the most di cult. See Data notes for details. Source: Doing Business database; WEF (2007); World Bank, World Development Indicators database. Top 4 reform features Number of reforms strengthening investor protections in protecting investors by Doing Business report year Investing in Costa Rica can be a risky Reforms including feature since DB2006 (%) DB2006 DB2007 DB2008 protections for investors explains up to DB2009 rankings on the index with 29 and 28 of Eastern Europe business. Diego, a Costa Rican entrepre- 73% of the decision to invest. In con- FIGURE 7.3 30 possible points, both require immedi- 47% FIGURE 7.4 & Central Asia Accelerating reforms in Eastern Europe & Central Asia 12 Increased disclosure requirements ate disclosure of a related-party transac- Top 4 reform (28 economies) neur, is well aware of that: "Why would I buy shares in a company if I know its trast, company characteristicsof explain only between 4% andNumberThus both 22%.1 reforms strengthening investor protections tion and of the conflict of interest (table in protectin OECD by Doing Business report year Reforms includ high income management can approve large transac- governmentsDB2006 DB2007have anDBin- and businesses 12 2008 De ned duties for directors 7.1). They require prior33% DB2009 approval of the (24 economies) tions between interested parties without terest in reforms strengthening investor Eastern Europe transaction by the other shareholders. protections. & Central Asia Increased discl East Asia ever disclosing them to its shareholders?" 12 (28 economies) They enable the shareholders to hold the & Paci c 10 22% (24 economies) In Costa Rica, as in many other countries OECD Without investor protections, eq- Regulated approval of related-party transactions directors liable and to have the transac- uity markets fail to develop and banks tion voided if it damages the company. Latin America around the world, minority investors are high income 12 De ned duties & Caribbean not protected against self-dealing--the become the only source of finance. The (24 economies) 6 And in13% New Zealand shareholders can (32 economies) use by company insiders of corporate as- result: businesses fail to reach efficient East Asia Allowed shareholder access inspect all internal documents before size for lack of financing, and economic & Paci c to corporate documents 10 Middle East & sets for personal gain. (24 economies) deciding whether to sue. Regulated app North Africa 6 Note: A reform may include several reform features. (19 economies) Companies grow by raising capital growth is held back. Research in 22 Latin America Vietnam shows the benefits of re- emerging market economies shows that Source: Doing Business database. & Caribbean forms to strengthen investor protections. 6 13% Sub-Saharan --either through a bank loan or by at- Africa tracting equity investors. Selling shares Allowed shareh 3 where investors have little recourse (32 economies) In 2005, before Vietnam adopted clear to corporate do (46 economies) allows companies to expand without the against actions that damage the com- Middle East & North Africa legislation, its unregulated stock market Note: A reform may South Asia need to provide collateral and repay bank pany, they invest in a few companies (19 economies) saw660­100 daily trades with a value of Source: Doing Busin (8 economies) loans. But investors worry2 about getting in which they take majority stakes.2 In Sub-Saharan $10,000­16,000. That was 3­6 times the Africa 3 Note: A reform is counted as 1 reform per reforming economy per year. their money back--and look for laws contrast, good protections for minority trading volume of the regulated Ho Chi (46 economies) Source: Doing Business database. that protect them. A recent study finds shareholders are associated with larger Minh Stock Exchange.4 After reform of that the presence of legal and regulatory South Asia and more active stock markets. (8 economies) 2 the Law on Securities and the Law on FIGURE 7.5 Vibrant stock markets are not the Top reformers in 2005­08 Table 7.1 only reason to introduce stronger inves- FIGURE 7.2 Note: A reform is counted as 1 reform per reforming economy per year. in protecting investors Where are investors protected--and tor protections. Tanzania started reforms Source: Doing Business database. Rankings on protecting investors Average improvement (index 0­10) where not? are based on 3 subindicators Most protected of investor protections as part of a larger 2008 RAnK Least protected RAnK Requirements initiative to reduce corruption and create Liability of CEO FIGURE 7.5 on approval and disclosure and board of directors new Zealand 1 Micronesia +1.4 172 an environment that inspires the trust Top reformers in 2005­08 of related-party in related-party FIGURE 7.2 Singapore +2.4 2 Palau 173 transactions 33.3% transactions Rankings on needed to do business.3 Such an environ- in protecting investors 33.3% Extent Hong Kong, China 3 Rwanda 174 Average improvement (index 0­10) are based o Extent of of director Malaysia 2005 +2.7 4 Venezuela 175 ment strengthens investor confidence in 2008 disclosure liability Requirements Canada 5 Vietnam 176 local businesses and government alike. index index on approval an +1.4 of related-part Ireland 6 Djibouti 177 Economies that rank high on the +2.4 33.3% transactions Israel 7 Suriname 178 strength of investor protection index Ease of shareholder United States 8 Swaziland 179 have extensive disclosure requirements 2005 suits index +2.7 South Africa 9 Lao PDR 180 and give shareholders broad access to United Kingdom 10 Afghanistan 181 Type of evidence that can be collected Extent of Extent of Ease of information both before and during tri- before and during the trial Note: disclosurebaseddirector Rankings are on the strengthshareholder of investor protection index. Seeindexnotesliability index als to determine director liability. New Data for details. suits index Zealand and Singapore, which top the Note: See Data notes for details. Source: Doing Business database. Source: Doing Business database. Type of Extent of Extent of Ease of b disclosure director shareholder index liability index suits index Note: See Data n PRoTECTING INvESToRS 35 Enterprises, the number of listed firms Table 7.2 climbed from 41 in 2005 to 193 today-- Greater disclosure--the most popular reform feature in 2007/08 and 107 of these are listed on the Ho Chi Increased disclosure requirements Albania, Azerbaijan, Egypt, Saudi Arabia, Minh Stock Exchange. Despite the recent Tajikistan difficulties in the Vietnamese securities Made it easier to sue directors Albania, Botswana, Kyrgyz Republic, Thailand markets, market capitalization increased Allowed derivative or direct suits Greece, Kyrgyz Republic, Slovenia from less than $1 billion in 2005 to more than $13 billion today. Regulated approval of related-party transactions Albania, Azerbaijan, Tajikistan Across regions, Latin America regu- Passed a new company law Albania, Botswana, Tajikistan lates related-party transactions the least, Required an external body to review related-party Egypt, Turkey imposing the weakest requirements for transactions before they take place disclosure and approval. Many Latin Allowed rescission of prejudicial related-party Tunisia American economies have commercial transactions laws that have not been reformed since Source: Doing Business database. the 1920s. Economies in Eastern Europe and Central Asia have stronger require- the area of director liability. Directors both to the market regulator and through ments for disclosure and approval. But damaging the company's interests can the company's annual reports. As in Al- once a transaction is approved and dis- no longer rely on having obtained share- bania, minority shareholders can now closed, the company directors are not holder approval of a transaction to avoid request compensation for damages to the liable for any damage resulting from it. liability. If they are held liable, sanctions company resulting from related-party Economies in the Middle East and will be harsh. They will have to compen- transactions. North Africa, such as Djibouti and Oman, sate the company for all damages, pay The Kyrgyz Republic reformed its limit access to information. That makes it back all profits made from the transac- joint stock companies act. From now on, difficult for minority shareholders to ob- tion and pay fines to the state. They even shareholders can sue in their own name tain the evidence needed to prove their risk jail time. the directors who damaged sharehold- case in court. Central Asian economies also ers' interests and request compensation strengthened minority shareholder from them. who reformed in 2007/08? rights. Tajikistan, Azerbaijan and the Botswana defined related-party Kyrgyz Republic brought their company transactions and clarified disclosure pro- Twelve economies strengthened inves- laws into line with modern regulations visions in its Companies Act of 2004, tor protections in 2007/08 (table 7.2). and corporate governance principles. which came into force in July 2007. Es- Albania was the top reformer. It adopted Tajikistan adopted a new joint stock tablishing the liability of directors is now the Law on Entrepreneurs and Commer- companies act. The law defines "inter- easier: shareholders can file suit against cial Companies, which regulates con- ested parties" and requires shareholder them if the transaction proves prejudicial flicts of interest by requiring shareholder approval of transactions between such to the company. If directors are held liable, approval of related-party transactions parties. It also requires interested parties they not only have to cover damages but involving more than 5% of company as- to immediately disclose conflicts of inter- also have to pay back all profits made--a sets. The law also provides for extensive est to the board of directors. In addition, good reason to think twice before at- disclosure requirements and makes it derivative suits are now possible: share- tempting to misuse company assets. easier for minority investors to sue direc- holders with at least 10% of shares can The Egyptian Capital Market Au- tors. And minority shareholders can now file a lawsuit on behalf of the company thority made improving disclosure re- request compensation from directors against company directors. quirements a priority when it amended for harm resulting from a related-party Azerbaijan reformed its civil code, the listing rules of the Cairo Stock Ex- transaction, including repayment of all and its State Securities Commission ad- change. The amendments are aimed at profits from the transaction. With the opted new rules regulating related-party increasing transparency both before and new law, Albanian company directors transactions. The new law defines what is after related-party transactions are con- have strong incentives to be responsive meant by "related transactions between cluded. Such transactions now have to to investor interests. interested parties" and requires share- be assessed by an independent financial The runner-up reformer was Thai- holder approval when such transactions adviser before they take place, ensuring land. After being the top reformer in exceed 5% of company assets. However, that shareholders will be better informed. protecting investors 3 years ago, Thailand interested parties are allowed to vote The amendments also clarify require- made new efforts to strengthen minor- at the shareholders meeting. The law ments for disclosure through companies' ity shareholder rights, particularly in also includes requirements for disclosure annual reports. In March 2008 Turkey 36 DoING BUSINESS 2009 Table 7.3 prejudicial related-party transactions. Where are investor protections strong--and where not? Reforms of corporate governance Extent of disclosure index (0­10) and, in particular, of company laws took Most Least place worldwide--from Syria to Sri Bulgaria 10 Ukraine 1 Lanka, from Indonesia to Vietnam. Ar- China 10 Afghanistan 0 gentina further strengthened corporate France 10 Lao PDR 0 governance principles by introducing a Hong Kong, China 10 Maldives 0 comprehensive set of "comply or explain" Ireland 10 Micronesia 0 rules for listed companies. Malaysia 10 Palau 0 Ongoing reforms to implement new Zealand 10 Sudan 0 Singapore 10 Swaziland 0 the European Union Transparency Di- Thailand 10 Switzerland 0 rectives are taking place in several EU United Kingdom 10 Tunisia 0 member countries, such as Austria and Extent of director liability index (0­10) Luxembourg, and in candidate member countries, such as Croatia. Implement- Most Least ing these EU directives often requires Albania 9 Tajikistan 1 amending the company and securities Cambodia 9 Togo 1 laws. Bulgaria and Romania amended Canada 9 Zimbabwe 1 Israel 9 Afghanistan 0 their company laws in the past 2 years, Malaysia 9 Dominican Republic 0 and both countries are now implement- new Zealand 9 Marshall Islands 0 ing these amendments. Singapore 9 Micronesia 0 Slovenia 9 Palau 0 whAt Are the reform trends? Trinidad and Tobago 9 Suriname 0 United States 9 Vietnam 0 Experience over the past 4 years shows Ease of shareholder suits index (0­10) that economies can successfully enhance Easiest Most difficult the protections they provide to minority Kenya 10 Lao PDR 2 shareholders. It often takes time, even new Zealand 10 Syria 2 when the necessary political will exists. Colombia 9 United Arab Emirates 2 But economies like Albania, Azerbaijan Hong Kong, China 9 Venezuela 2 and the Kyrgyz Republic demonstrate Ireland 9 Yemen 2 that it can be done in months, not years. Israel 9 Guinea 1 Sometimes the private sector op- Mauritius 9 Morocco 1 Poland 9 Rwanda 1 poses reforms that are designed to pro- Singapore 9 Djibouti 0 tect minority investors, especially in United States 9 Iran 0 economies with a high concentration of ownership. One possible reason is Source: Doing Business database. that complying with extensive disclosure undertook similar reforms. The listing that lowers the threshold for derivative requirements can represent a financial rules of the Istanbul Stock Exchange now suits. Now shareholders need to have burden for companies, particularly in require an independent body to assess only 10% of the company's shares, down developing economies. In Mexico, for all related-party transactions before they from 33% before. Slovenia changed its example, the most vocal opponent of re- are approved. laws to allow minority investors with at form was one of the country's wealthiest Saudi Arabia amended provisions least 10% of shares to bring derivative businessmen.5 In Georgia it was one of of its company law. Interested directors suits before the court. the largest commercial banks. may no longer vote at a shareholders Tunisia adopted a law giving share- Such opposition has not prevented meeting to approve related-party trans- holders the right to directly access in- reform: Doing Business has recorded actions. And just as in Albania, Botswana ternal company documents and to ask more than 50 reforms to strengthen in- and Thailand, directors found liable for for the appointment of an independent vestor protections in 41 economies over damage to a company due to a related- inspector. That will make it easier to the past 4 years. Eastern Europe and party transaction will have to repay all gather evidence to support a court claim. Central Asia and the OECD high-income profits made from it. The new law also gives 10% shareholders economies have had the most reforms, Greece adopted a new company law the right to request a judge to rescind with 12 each (figure 7.3). Note: Relationships remain signi cant at the 5% level when controlling for income per capita. Economies are ranked on the perceived di culty in access to equity, with 131 being the most di cult. See Data notes for details. Source: Doing Business database; WEF (2007); World Bank, World Development Indicators database. PRoTECTING INvESToRS 37 FIGURE 7.3 FIGURE 7.4 Accelerating reforms in Eastern Europe & Central Asia Top 4 reform features Number of reforms strengthening investor protections in protecting investors by Doing Business report year Reforms including feature since DB2006 (%) DB2006 DB2007 DB2008 DB2009 Eastern Europe 47% & Central Asia 12 Increased disclosure requirements (28 economies) OECD 33% high income 12 De ned duties for directors (24 economies) East Asia & Paci c 10 22% (24 economies) Regulated approval of related-party transactions Latin America & Caribbean 6 13% (32 economies) Allowed shareholder access to corporate documents Middle East & North Africa 6 Note: A reform may include several reform features. (19 economies) Source: Doing Business database. Sub-Saharan Africa 3 (46 economies) South Asia (8 economies) 2 Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. FIGURE 7.5 In Eastern Europe and Central Asia and South Asia. In 2007/08 only one re- lawyers and accountants to comply with FIGURE 7.2 the main driver of the reforms was acces- Top reformers in 2005­08 form was recorded in these regions--in the standards. Many poor countries lack Rankings on protecting investors sion to the European Union. Economies in protecting investors Average improvement (index 0­10) Botswana. But in previous years reforms both. They may have stock exchanges-- are based on 3 subindicators such as Poland, Romania and Slovenia 2008 strengthened investor protections in but no website to post theLiability Requirements informa- of CEO updated company and securities laws to such economies as Colombia and Mexico tion on. And they mayandhave certified on approval and disclosure board of directors of related-party in related-party EU standards. These reforms focused on +2.4 +1.4 in Latin America and Mozambique and accountants--but in such small numbers transactions 33.3% transactions developing regulations requiring more Tanzania in Africa. that complying33.3% disclosure require- Extent Extent of with of director transparency in the day-to-day manage- 2005 +2.7 ments is virtually impossible. Take Viet- disclosure liability ment of companies. The reforms raised going for more disClosure nam. Its securities law has significant index index the region's average score on the extent Across regions, the most popular re- disclosure and reporting requirements, 33.3% of disclosure index from 4.7 in 2005 to form feature has been to require greater but the country still lacks the systems Ease of shareholder 5.8 today. disclosure of related-party transactions to store and monitor the information suits index OECD high-income economies pro- (figure 7.4). The results of a 2002 global electronically.7 Type of evidence that can be collected tect disclosure investors theshareholder Extent of minority Extent of Ease of most. Why survey on corporate governance provide before and during the trial wouldindex continually reform? There is they director liability index suits index one explanation: around 90% of the in- finding inspiration for reform Note: See Data notes for details. aSource: logical reason: sophisticated and active Doing Business database. vestors surveyed want more transpar- Crisis can be an important engine of financial markets must respond rapidly ency in the day-to-day management of reform. The East Asian financial crisis to challenges that are constantly evolv- companies.6 What do they mean by more and corporate scandals such as those in- ing, such as fraud. Among the repeat transparency? Unified accounting stan- volving Enron, Parmalat and WorldCom reformers are Hong Kong (China) and dards, immediate disclosure of major triggered regulatory reforms around the the United Kingdom--both in the top transactions and more involvement of world. These crises exposed weaknesses 10 on the strength of investor protection minority investors in major decisions in markets previously considered models index. Both economies reformed twice and transactions. of sound regulation. Countries affected during the past 3 years, by strengthening Requirements for greater disclosure, by the crises reformed their laws. So did disclosure requirements and expanding while popular, are unlikely to succeed ev- other countries, using the experiences to shareholder access to internal corporate erywhere. Extensive disclosure standards avoid the same mistakes. Mexico, for ex- documents. require the necessary infrastructure to ample, used the U.S. experience to create Fewer reforms have taken place in communicate the information effectively impetus for its regulatory reforms. Latin America and the Caribbean, Africa and, more importantly, people such as Countries that want to reform can (8 economies) 2 Note: A reform is counted as 1 reform per reforming economy per year. 38 Source: Doing Business database. DoING BUSINESS 2009 FIGURE 7.5 notes Top reformers in 2005­08 Reformers often find inspiration in FIGURE 7.2 in protecting investors economies with a similar legal origin Rankings on protecting investors Average improvement (index 0­10) or in their main commercial partners. 1.are basedKarolyisubindicators Doidge, on 3 and Stulz (2007). 2008 Mexico's securities law reform took into 2.Requirements Dahya, Dimitrov and McConnell (2008). Liability of CEO account aspects of a U.S. law--the Public 3.onSitta (2005). approval and disclosure and board of directors of related-party in related-party +2.4 +1.4 Company Accounting Reform and Inves- 4.transactions World Bank (2006c). 33.3% transactions Extent 2005 tor Protection Act of 2002, commonly 5. See Johns and33.3% (2007). Extent of Lobet of director +2.7 known as the Sarbanes-Oxley Act. Bo- 6. McKinsey & Companyliability p. 8). disclosure index index (2002, tswana and Mozambique followed the 7. Lobet (2008). South African model. As a reformer 33.3% from Mozambique explains, "Our previ- Ease of shareholder suits index ous code was inherited from Portugal. Today our main commercial partner is Type of evidence that can be collected Extent of Extent of Ease of before and during the trial disclosure director shareholder South Africa, and we are surrounded by index liability index suits index countries that have the same model. We Note: See Data notes for details. Source: Doing Business database. prefer to adopt legislation that would en- able us to attract more investment from choose to amend existing regulations or South Africa and make life easier for our start from scratch, depending on how main investors." up-to-date their current legislation is. In Even the best regulations will make 2007 Georgia amended its securities leg- little difference if the court system is islation by adding provisions regulating weak. Bangladesh and Montenegro have disclosure and approval of transactions laws setting out strong disclosure re- between interested parties. Belarus, Co- quirements and extensive obligations for lombia and Thailand did the same. Other directors. But with the most basic com- countries, such as Mozambique and Slo- mercial disputes taking more than 1,000 venia, started from scratch. Adopting an days to resolve in Bangladesh and more entirely new law offers an opportunity than 500 in Montenegro, these laws may to reform other areas--such as business not have the desired effect. registration, directors' duties, disclosure rules and issuance of shares. PAyING TAXES 39 overview Starting a business FIGURE 8.1 Dealing with construction permits Top 10 reformers in paying taxes Employing workers Average improvement Registering property 2007 48% 16% 4% Getting credit 1. Dominican Republic 2. Malaysia Protecting investors Paying taxes 3. Azerbaijan 4. South Africa 2008 5. China Trading across borders 6. Greece Enforcing contracts 7. Colombia Closing a business 8. France 9. Honduras 10. Thailand Payments Time Total tax rate Source: Doing Business database. For Kah, the owner of a Cameroon-based enterprises headed by women perceive often higher revenue for governments. management consulting business, having a greater regulatory burden--and more In Mauritius in 2007/08, the govern- a simple tax system with standardized FIGURE 8.3 harassment from public officials--than ment collected 4 billion Mauritian ru- rates and payment channels is funda- FIGURE 8.1 Top 10 reformers in paying taxes Pro t taxes lowest, but overall tax burden still high in Eastern Europe & Central Asia those headed by men.2 pees ($150 million) more in revenue FIGURE mental to the ease of doing business. Yet Average improvement Total tax rate (% of pro t) Taxes are essential. Without them than had been projected. Reforming the Rank in Cameroon, which ranks among the 3 sub 60 there would Otherno funds for the basic be tax system was a key part of the govern- most difficult economies in which to pay 2007 taxes 48% 16% 4% public services vital to a well-functioning Numb 1. Dominican Republic Labor taxes and contributions ment's agenda over the past 3 years. The taxes, complying with tax regulations economy andProan inclusive society. Yet per ye 2. Malaysia t taxes focus: creating an enabling environment le re takes more than 1,000 hours and 41 tax 40 firms in 90% of the countries covered by 3. Azerbaijan for businesses through low and simple and p payments a year.1 the4.World Bank Enterprise Surveys rank South Africa taxes coupled with fast and efficient ad- 2008 To file a tax return for her com- tax5.rates and tax administration among China ministration. The strategy paid off. pany, Kah often spends hours waiting in 20 the6.top 5 obstacles to doing business.3 Greece the tax office for information from tax Businesses prefer lower tax rates that 7. Colombia who reformed in 2007/08? inspectors. Because she refuses to pay are8.applied in a straightforward way. Or, France if010. 9. Honduras extra, she regularly endures long, costly ratesThailand are high, businesses want good Thirty-six economies made it easier to court procedures. And because the tax services&in return.East Middle East Asia South OECD pay taxes in 2007/08. AsSub-Saharan Eastern Latin in previous systemPayments transparency, results are lacks Time Total North & Paci c Asia high Europe & America Africa tax rate Where taxes are high and commen-incomeyears, the most&popular reform feature Africa Central Caribbean often arbitrary. Asia Source: Doing Business database. surate gains seem low, many businesses Source: Doing Business database. was reducing the profit tax rate, done Note: Se Kah feels that tax officers see her as simply choose to stay informal. A recent in no fewer than 21 economies. The an easy target. She is not the only one. study finds that higher tax rates are asso- second most popular was introducing A recent study in Uganda shows that ciated with less private investment, fewer and improving electronic filing and pay- FIGURE 8.3 FIGURE 8.4 Pro t taxes lowest, but overall tax burden still high in Eastern Europe & Central Asia Table 8.1 Most time in Latin America & Caribbean formal businesses per capita and lower Where is it easy to pay taxes-- rates of business entry. The analysis sug- FIGURE 8.2 Total tax rate (% of pro t) and where not? gests, for example, thatNumberincrease in # tax payments a 10% of Rankings on paying taxes are based on Easiest RAnK Most difficult 3 subindicators 60 Other taxes RAnK the effective corporate tax rate reduces OECD 13 of hours Firm tax liability Maldives Labor taxes and contributions 1 Panama 172 thehigh investment-to-GDP ratio by 2 per- income 183 NumberTime (hours per year to prepare, per year) as % of pro ts before Qatar Pro t taxes 2 Jamaica 173 centage points.4 Middle East le returns all taxes borne & North Africa 23 174 and pay taxes 216 Hong Kong, China 40 3 Mauritania Economies that rank high on the East Asia United Arab Emirates 4 Gambia, The 175 ease of& paying taxes tend to have lower Paci c 25 252 Singapore 5 Bolivia 176 33.3% and South Asia less complex business taxes (table 33.3% Ireland 32 293 20 6 Venezuela 177 Time Total tax rate Saudi Arabia 7 Central African Republic 178 8.1). They also have simple administra- Sub-Saharan Africa 38 312 oman 8 Congo, Rep. 179 tive processes for paying the taxes and Eastern Europe 33.3% Kuwait filing tax returns. For businesses, it's not 46 388 0 9 Ukraine 180 & Central Asia Payments Kiribati 10 Belarus 181 justLatin tax rates that matter. The admin- theAmerica Middle East East Asia South OECD & Caribbean Latin Sub-Saharan 35 394 Note: Rankings are the average of the economy rankings on the & North & Paci c Asia high istrativeEastern Europe & processesAmericado too. Africa number of payments, time and total tax rate. See Data notes Africa income FastBusiness Central anddatabase. efficient administration & Caribbean Number of tax payments per year Source: Doing Business database. for details. Source: DoingAsia Note: See Data notes for details. Source: Doing Business database. means less hassle for businesses--and FIGURE 8.5 FIGURE A third of reforms in Eastern Europe & Central Asia Top 5 Number of reforms easing payment of taxes Reforms by Doing Business report year FIGURE 8.4 tax rate Source: Doing Business database. 40 DoING BUSINESS 2009 ment systems. This reform, done in 12 FIGURE 8.3 economies, reduced the frequency of Pro t taxes lowest, but overall tax burden still high in Eastern Europe & Central Asia FIGURE 8.2 payments and the time spent paying Total tax rate (% of pro t) Rankings on 3 subindica taxes and filing returns. Eight economies 60 Other taxes reduced the number of taxes paid by Number of h Labor taxes and contributions per year to p businesses by eliminating smaller taxes Pro t taxes le returns such as stamp duties. The top 10 reform- 40 and pay taxe ers for paying taxes this year reduced the number of payments by almost half. Bos- nia and Herzegovina, Bulgaria, Morocco, 20 Mozambique and Zambia revised their tax codes (table 8.2). 0 Two economies introduced new taxes: Botswana and Venezuela. That in- Middle East East Asia South OECD Eastern Latin Sub-Saharan & North & Paci c Asia high Europe & America Africa creases not only the costs but also the Africa income Central & Caribbean Numb Asia administrative burden for businesses. Source: Doing Business database. Note: See Data no The Dominican Republic was the property and financial market sectors. simpler to file and pay taxes by intro- top reformer in 2007/08. It lowered the And electronic payment systems were ducing electronic systems and online corporate income tax from 30% to 25%, improved, increasing online filing and FIGURE 8.4 payment capabilities. That significantly abolished several taxes (including the payments. Most time in Latin America & Caribbean reduced the time spent preparing, filing stamp duty) and reduced the property Among regions, Eastern Europe Number of and paying taxes in the region. Belarus transfer tax. In addition, in 2007 it fully and Central Asia had the most reforms # tax payments reduced the tax and administrative bur- implemented online filing and payment, in 2007/08. Nine economies reformed, OECD den on businessesperbyyear)abolishing some piloted in 2006. mainly continuing the trend13of reducing high income taxes andTime (hours the frequency of pay- 183 reducing Malaysia was the runner-up re- the& profit tax rate, already among the Middle East North Africa 23 ments.216 Bulgaria reduced labor taxes and former. It reduced the corporate income lowestEastthe world (figure 8.3). Albania, Asia 25 contributions.252 tax for 2009 to 25%--part of a gradual Bosnia&inPaci Herzegovina and the former and c Following closely with 7 reforms reduction that has seen the rate decline Yugoslav Republic of Macedonia all32re- South Asia each are the OECD high-income econo- 293 to 27% in 2007 and 26% in 2008. The duced their profit tax to 10%. Georgia Sub-Saharan 38 mies and Latin America and the Carib- 312 reform also introduced a single-tier tax reduced Africa corporate income tax from the bean. Five OECD high-income econo- system, in which profits are taxed only Eastern Europe 20% to 15% and abolished the social tax. & Central Asia mies reduced corporate income tax rates. 46 388 after dividend payments are exempted. TheLatinCaribbeanRepublic reduced its corpo- rate&income tax rate to 21%. Czech America Canada is gradually reducing the corpo- 35 394 The capital gains tax was abolished in rate income tax to 15% by 2012 as part 2007 to spur investment in the real Source: Doing Business database. Azerbaijan and Ukraine made it of ambitious reforms in its tax system. FIGURE 8.5 The reforms also include abolishing the FIGURE 8.6 Reducing tax rates--the most common reformAfeature in 2007/08 Table 8.2 third of reforms in Eastern Europe & Central Asia 1.12% surtax and introducing acceler- Top 5 reform Number of reformsated depreciationtaxes buildings (10%) easing payment of for Reforms includi by Doing Business report year Reduced profit tax rates Albania, Antigua and Barbuda, Bosnia and DB2006 DB2007 and computers (50%). Also reducing the DB2008 DB2009 Herzegovina, Burkina Faso, Canada, China, Côte Eastern Europe corporate tax rate were Denmark (from Reduced pro t d'Ivoire, Czech Republic, Denmark, Dominican & Central Asia 28% to 25%), Germany (from 25%44 to Republic, Georgia, Germany, Italy, former Yugoslav (28 economies) 22% Republic of Macedonia, Madagascar, Malaysia, 15%), Italy (from 33% to 27.5%) and Morocco, new Zealand, Samoa, St. Vincent and the Sub-Saharan New22France (from 33% to 30%). Zealand Simpli ed proc Grenadines, Thailand Africa (46 economies) and Greece made filing 19% Simplified process of paying taxes Azerbaijan, Belarus, China, Colombia, Dominican OECD and paying taxes faster by implement- Republic, France, Greece, Honduras, Malaysia, high income 18ing mandatory electronic filing for labor Revised tax cod Mozambique, Tunisia, Ukraine (24 economies) taxes and contributions. 17% Eliminated taxes Belarus, Dominican Republic, Georgia, Latin America In Latin America and the Caribbean, Madagascar, Malaysia, Mexico, South Africa, & Caribbean 17 Eliminated taxe Uruguay (32 economies) besides the reforms in the Dominican Republic, Antigua and Barbuda reduced Revised tax code Bosnia and Herzegovina, Bulgaria, Morocco, Middle East & 14% Mozambique, Zambia North Africa 12 the corporate income tax rate from 30% Reduced labor (19 economies) Reduced labor tax or contribution rates France, Mongolia, Ukraine to 25%. St. Vincent and the Grenadines Note: A reform may East Asia Source: Doing Busin & Paci c introduced a new value added tax that Source: Doing Business database. 7 (24 economies) replaced several existing taxes, includ- South Asia (8 economies) 6 Note: A reform is counted as 1 reform per reforming economy per year. Africa income Central & Caribbean Asia Source: Doing Business database. Note: Se PAyING TAXES 41 ing the hotel tax, entertainment tax, FIGURE 8.4 consumption duty, stamp duty on re- Most time in Latin America & Caribbean ceipts and domestic and international # Number of tax payments telecommunications surcharge. Uruguay abolished a tax on consumption. Mexico OECD high income 13 183 Time (hours per year) abolished its asset tax. Colombia and Middle East Honduras made paying taxes easier by & North Africa 23 216 implementing and improving online fil- East Asia & Paci c 25 252 ing and payment systems. That cut the South Asia 32 293 time spent filing and paying taxes, espe- cially in Honduras. Sub-Saharan Africa 38 312 In Africa 6 economies reformed. Eastern Europe 46 388 Three reduced their corporate income & Central Asia tax rate (table 8.3). Burkina Faso re- Latin America & Caribbean 35 394 duced its corporate income tax rate from 35% to 30%, its dividend tax rate from Source: Doing Business database. 15% to 12.5% and its property transfer FIGURE 8.5 tax payments African businesses must reformed. Aside from Malaysia, China FIGURE tax rate from 10% to 8%. Côte d'Ivoire A third of reforms in Eastern Europe & Central Asia made notable reforms, reducing the cor- Top 5 reduced the corporate income tax rate make each year (figure 8.4).Number Mozambique eased the filingofand reforms easing payment of taxes Reforms by Doing Business report year porate income tax from 33.3% to 25% from 27% to 25%. Madagascar reduced paying of taxes by introducing electronic DB2006 DB2007and unifying2008 DB accountingDBmethods and 2009 that rate from 30% to 25% and abolished Eastern Europe Reduce & Central Asia systems. It also revised its tax code to criteria for tax deductions and exemp- 9 taxes, including the stamp duty and (28 economies) make necessary updates, remove ambi- tions. Meanwhile, online filing became 44 dividend tax. In Africa taxes other than Sub-Saharan guities and strengthen tax compliance more prevalent. Thailand introduced Simpli the profit tax--such as stamp duties, Africa and collection. Zambia did the same. corporate income tax exemptions for 22 property taxes and labor taxes--account (46 economies) These changes should increase the effec- small companies, reduced the corporate for the largest share of the total tax rate. OECD income tax rate to 25% for newly listed high income tiveness of tax administration. Revised This is reflected in the large number of 18 (24 economies) In East Asia and Pacific 5 economies companies and reduced several property taxes by sizable rates. It also made online 1 Table 8.3 Latin America Major cuts in corporate income tax rates in 2007/08 & Caribbean 17 filing and payments easier. Samoa low- Elimina (32 economies) ered its corporate income tax from 29% Region Middle East & Reduction in corporate income tax rate (%) to 27%. Mongolia reduced social security 14% oECD high income North Africa 12 Reduce (19 economies) Canada from 22.1 to 19.5 contributions paid by employers from Czech Republic from 24 to 21 Note: A re East Asia 19% to 11% of gross salaries. Source: Do & Paci c Denmark from 28 to 25 7 In the Middle East and North Africa (24 economies) Germany from 25 to 15 Italy from 33 to 27.5 only 2 economies reformed. Morocco South Asia lowered the standard corporate tax rate (8 economies) new Zealand from 33 to 30 6 East Asia & Pacific China from 33.3 to 25 from 35% to 30%. Tunisia made filing Note: A reform is counted as 1 reform per reforming economy per year. and paying taxes easier by expanding Source: Doing Business database. Malaysia from 27 to 25 Samoa from 29 to 27 electronic options. Although companies Thailand from 30 to 25 have been able to file and pay taxes online Eastern Europe & Central Asia Albania from 20 to 10 since 2005, many have been reluctant to Bosnia and Herzegovina from 30 to 10 pay their taxes this way. To address their Georgia from 20 to 15 concerns while easing the administrative Macedonia, former Yugoslav Republic of, burden, Tunisian authorities introduced from 12 to 10 an option for filing tax returns online Latin America & Caribbean Antigua and Barbuda from 30 to 25 while paying the taxes in person at a tax Dominican Republic from 30 to 25 office. This is a practical intermediate St. Vincent and the Grenadines from 40 to 37.5 step toward a full online system. Sub-Saharan Africa Burkina Faso from 35 to 30 South Asia recorded no significant Côte d'Ivoire from 27 to 25 reforms. Madagascar from 30 to 25 Middle East & north Africa Morocco from 35 to 30 Source: Doing Business database. FIGURE 8.3 Pro t taxes lowest, but overall tax burden still high in Eastern Europe & Central Asia FIGURE 8.2 Total tax rate (% of pro t) Rankings on paying taxes are based on 42 DoING BUSINESS 2009 3 subindicators 60 Other taxes Number of hours Firm tax liability whAt AreLabor reform trends? thetaxes and contributions tax revenue by lowering rates and per- trative burden of payingastaxes. But it can per year to prepare, % of pro ts before Pro t taxes suading more businesses to comply with take time for them to make aallreal differ- le returns taxes borne 40 and pay taxes Revenue authorities around the world the more favorable rules. ence. In Argentina and Tunisia it took are making great efforts to streamline Look at the Russian Federation's almost 3 years before smaller firms felt 33.3% 33.3% 20 administrative processes and modern- large tax cuts in 2001. Corporate tax rates Time ize payment systems. In the past 4 years fell from 25% to 24%, and a simplified tax the impact. The reason isTotalratesmall firms often lack the softwaretaxthat needed for elec- Doing Business has recorded 126 reforms scheme lowered rates for small business. tronic filing and payments. Moreover, 33.3% aimed at reducing tax rates or the time or 0 Yet tax revenue increased--by an annual taxpayers often Payments online systems distrust cost toMiddle comply withEasttax laws. East Asia South OECD averageEastern of 14% overLatin next 3 years. One the Sub-Saharan when it comes to dealing with sensitive The&Africa North trend across all regions hasincomestudy shows thatAmericanew revenue was & Paci c Asia high Europe & the Africa financial information. due to Central & Caribbean Number of tax payments per year been to lower the total tax rate paid by greater compliance.5 Asia Note: See Data notes for details. Businesses in Azerbaijan are ben- Source: Doing Business database. businesses. In 2004 the average total tax efiting from an ambitious tax modern- rate was 50.6% of commercial profits. By going eleCtroniC ization reform started by the govern- 2007 it had fallen to 49.3%. Meanwhile, Introducing electronic filing has been ment 3 years ago. Electronic payment FIGURE 8.4 the time to comply with tax laws dropped a popular and effective way to make it and filing systems have been in place Most time in Latin America & Caribbean by 16 hours a year on average. easier to pay taxes. Businesses can enter since March 2007. The goal is to have About 50% of#economies have im- Number of financial information online and file it 100% online filing. Tax authorities have plemented reforms making it easier to tax payments with one click--with no calculations and been actively promoting online filing payhigh taxes in the past 4 years. Among OECD among businesses paying value added regions,income 13 no interaction with tax officials. Errors 183 Time (hours per year) Middle East Eastern Europe and Central Asia can be identified instantly, and returns tax. The efforts have had results: 95% of has& North Africa most reforms, followed by had the 23 processed quickly. In Hong Kong (China) 216 these businesses are using the service, AfricaEast& Paci c (figure 8.5). South Asia has had Asia 25 businesses file an electronic corporate 252 completing more than 200,000 online the fewest. tax return and pay corporate income tax transactions in the first 3 months of 2008 South Asia 32 annually. Complying with tax require- 293 alone--and saving an average 577 hours Cutting rates Sub-Saharan Africa 38 ments takes just 80 hours a year. Sixty 312 a year. Online filing is also available for Reducing corporate income tax rates has Eastern Europe economies--from Azerbaijan to Colom- corporate income tax. been the most popular reform feature & Central Asia bia and Lesotho--have made e-filing 46 388 Reforms introducing electronic (figure 8.6). More than 60 economies Latin America & Caribbean possible, and the list is growing. 35 394 payment and filing systems often need have done this. Countries can increase These reforms can ease the adminis- to provide public education and training. Source: Doing Business database. FIGURE 8.5 FIGURE 8.6 A third of reforms in Eastern Europe & Central Asia Top 5 reform features in paying taxes Number of reforms easing payment of taxes Reforms including feature since DB2006 (%) by Doing Business report year DB2006 DB2007 DB2008 DB2009 71% Eastern Europe Reduced pro t tax & Central Asia 44 (28 economies) 22% Sub-Saharan Simpli ed process of paying taxes Africa 22 (46 economies) 19% OECD high income 18 Revised tax code (24 economies) Latin America 17% & Caribbean 17 Eliminated taxes (32 economies) Middle East & 14% North Africa 12 Reduced labor taxes or contributions (19 economies) Note: A reform may include several reform features. East Asia Source: Doing Business database. & Paci c 7 (24 economies) South Asia (8 economies) 6 Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. PAyING TAXES 43 Azerbaijan provided free software to tax- Table 8.4 payers 6 months before implementing its Who makes paying taxes easy--and who does not? new system, giving them time to become Payments (number per year) familiar with it. Distributing the tax soft- Fewest Most ware early paid off in more than one way: users also suggested improvements Maldives 1 Côte d'Ivoire 66 Qatar 1 Serbia 66 simplifying the design of the software's Sweden 2 Venezuela 70 interface. Hong Kong, China 4 Jamaica 72 To make the new online system norway 4 Kyrgyz Republic 75 more effective, Azerbaijan's government Singapore 5 Montenegro 89 also introduced advanced accounting Kiribati 7 Ukraine 99 software to help in computing tax pay- Latvia 7 Uzbekistan 106 ments. This has especially benefited Mauritius 7 Belarus 112 Afghanistan 8 Romania 113 medium-size companies, which make up a sizable share of the users. For smaller Time (hours per year) enterprises, more likely to lack access Fastest Slowest to the internet, the Ministry of Taxes is Maldives 0 Ukraine 848 installing computer stations around the United Arab Emirates 12 Venezuela 864 country that are linked to the central Bahrain 36 Czech Republic 930 database. Qatar 36 nigeria 938 Kenyan and Mozambican taxpayers Bahamas, The 58 Armenia 958 too are enjoying the benefits of elec- Luxembourg 59 Vietnam 1,050 tronic tax systems. Companies in Kenya St. Lucia 61 Bolivia 1,080 oman 62 Belarus 1,188 can complete and submit social security Switzerland 63 Cameroon 1,400 forms online. Complying with labor tax new Zealand 70 Brazil 2,600 obligations used to take them 72 hours Total tax rate (% of profit) a year; now it takes about 20% less time. Their Mozambican counterparts can Lowest Highest complete social security forms electroni- Vanuatu 8.4 Tajikistan 85.5 cally and are looking forward to being Maldives 9.1 Uzbekistan 90.6 able to submit them online, which will Qatar 11.3 Mauritania 98.7 further simplify the task. United Arab Emirates 14.4 Argentina 108.1 Kuwait 14.4 Belarus 117.5 notes Saudi Arabia 14.5 Central African Republic 203.8 Bahrain 15.0 Congo, Dem. Rep. 229.8 Zambia 16.1 Sierra Leone 233.5 1. This example is from the World Bank's West Bank and Gaza 16.8 Burundi 278.7 Doing Business: Women in Africa (2008a), Botswana 17.1 Gambia, The 292.4 a collection of case studies of African en- trepreneurs. Source: Doing Business database. 2. Ellis, Manuel and Blackden (2006). 3. World Bank Enterprise Surveys (http://www.enterprisesurveys.org). 4. Djankov, Ganser, McLiesh, Ramalho and Shleifer (2008). 5. Ivanova, Keen and Klemm (2005). export 2008 10 Source: Doing Business database. 44 DoING BUSINESS 2009 overview Starting a business FIGURE 9.1 0 Dealing with construction permits Speeding trade--especially in Eastern Europe & Central Asia Documents Employing workers Reduction in the time to export (days) Source: Doing Busin Registering property Middle East Latin OECD Eastern Europe Sub-Saharan & North South America East Asia high Getting credit Time to & Central Asia Africa Africa Asia & Caribbean & Paci c income FIGURE 9.2 export Protecting investors 2005 0.6 Rankings on days are based o Paying taxes 2.9 2.5 days Trading across All documents r 4.1 days by customs and 4.6 4.4 4.3 days other agencies days days days borders 33 Docum Enforcing contracts to ex and im Closing a business Time to export 2008 Co Source: Doing Business database. Cáñamo, a Venezuelan company export- Exporters in landlocked Rwanda Implementing these practices has US$ pe FIGURE 9.1 no bribe Speeding trade--especially in Eastern Europe & Central Asia ing handicrafts, is eager to supply larger have a better chance, thanks to ongoing FIGURE 9.3 reduced the time to trade. The average Madagascar speeds imports Note: See Data no Reduction in the time to export (days) clients--preferably, large U.S. depart- reforms. Indeed, baskets from Gahaya time to export has fallen by 3 days since ment stores. It has the capacityMiddle fill to Time to import (days) East Links, a Kigali-based business run by FIGURE 9.4 Latin OECD 2005. The biggest decline was in Eastern FIGURE 9.5 Time to orders within 2 weeks.Africa there&Africa Eastern Europe Sub-Saharan & Central Asia But isNorth one sisters JanetAmericaJoy, are already available Africa has reformed the most South and East Asia high 50 Europe and Central Asia--almost 5 days 2007 Top 5 reform export problem: bureaucracy. "I need to get a toAsia & Caribbean & Paci c U.S. households in Macy's department Number of reforms easing trade income (figure 9.1). The time to export dropped across borde 2005 by Doing Business report year Reforms includ labor compliance certificate from the 0.6 stores.1 It wasn'tDB 2006 DB2007 with high DB2008 40 by 4 days in Africa, the Middle East and DB2009 Ministry of Labor, but before issuing the shippingdays easy2.5at first,days Sub-Saharan costs and days 2.9 inadequate roads to North Africa and South Asia. It declined certificate 4.6 ministry demands4.3 other the 4.1 the port city of Mombasa, Kenya. But the Africa Introduced or i 4.4 4 (46 economies) by less than 3 days in East Asia and 27 documents from municipal authorities. days days days days data interchan government has reformed 2 years in a 30 Time cut from For each export consignment I need to row, and exporting is becoming easier. Latin America Pacific and Latin America. Thetolongest 27 & Caribbean average export delays are49 Central Asia 22 indays Improved custo inform the authorities of my intention to (32 economies) Doing Business measures the proce- (58 days) and Central Africa (48 days), 2008 export, confirm the exports and get a let- dural requirements, including the num- Middle East & 20 where most countries are landlocked. ter confirming that I have refunded the Time to ber of necessary documents and the North Africa 14 The top performers on the ease of Introduced risk foreignexport (19 economies) 2008 exchange earned to the central associated time and cost (excluding trade trading across borders continually con- bank," says Bruno, the company's owner. tariffs) for exporting and importing. East Asia & Paci c 1013 sult export businesses on how to make Source: Doing Business database. Getting through all the paperwork (24 economies) The more time consuming the ex- trading easier (table 9.1). In Denmark, Improved port can take 2­6 months on average. Faced port or import process, the less likely Eastern Europe for example, 3 main trade documents FIGURE 9.1 with this long and unpredictable export that a trader will be able to reach mar- & Central Asia 12 0 14% Speeding trade--especially in Eastern Europe & Central Asia (28 economies) (bill of lading, commercial invoice and process, Cáñamo has little chance of kets in a timely fashion. This affects the customs declaration) suffice to cover Documents Port Customs Transport Introduced bor Reduction in the time to export (days) entering the U.S. market. ability to expand businesses and create South Asia Note: A reform may Source: Doing Business database. most trade transactions. And these are Procedures 7 Middle East (8 economies) Latin OECD Source: Doing Busin Eastern Europe Sub-Saharan & North jobs. Recognizing this,Eastmany economies South America Asia high Time to Table 9.1 & Central Asia Africa Africa Asia & Caribbean & Paci c income FIGURE 9.2 export Where is trading easy--and where not? have worked to introduce practices that OECD 0.6 7 2005 Rankings on trading across borders Easiest RAnK Most difficult RAnK reduce the time and costs associated with high income (24 economies) are based on 3 subindicators Singapore 1 Angola 172 trade. These includedays Note: A reform is counted as 1 reform per reforming economy per year. 2.9 providingdays 2.5 electronic All documents required Document preparation, Source: Doing Business database. Hong Kong, China 4.1 filing of trade documents (through elec- days by customs and customs clearance and 4.6 2 4.4Burkina Faso4.3 173 days other agencies technical control, ports Denmark days 3 daysAzerbaijandays 174 tronic data interchange systems), allow- and terminal handling, Finland 4 Central African 175 ing shippers to declare manifests online, inland transport Republic 33.3% 33.3% reducing document requirements and and handling Documents Time to Estonia 5 Congo, Rep. 176 using risk-based inspections. Another to export export Sweden 6 Tajikistan 177 and import and import norway Time to 7 Iraq 178 good approach is to provide a single win- Panamaexport 8 Afghanistan 179 dow for obtaining different permits and 33.3% Cost to export Israel 2008 9 Kazakhstan 180 authorizations, which reduces the time Source: Doing Business database. and import Thailand 10 Kyrgyz Republic 181 spent preparing documents. An efficient Note: Rankings are the average of the economy rankings on the banking system also helps, by speeding US$ per 20-foot container, documents, time and cost required to export and import. See the processing of trade financing instru- no bribes or tari s included Data notes for details. Note: See Data notes for details. Source: Doing Business database. ments such as letters of credit. FIGURE 9.4 FIGURE 9.5 Africa has reformed the most Top 5 reform features in trading Number of reforms easing trade across borders by Doing Business report year TRADING ACRoSS BoRDERS 45 Table 9.2 implemented a risk-based inspection re- Electronic data interchange--the most popular reform feature in 2007/08 gime and extended its operating sched- Introduced or improved electronic data Botswana, Brazil, Colombia, Dominican Republic, ule by 4 hours. interchange system El Salvador, France, India, Kenya, Madagascar, Reforms to ease trade were extended Mali, Mongolia, Morocco, Palau, Philippines, to neighboring countries. Senegal signed Rwanda, Senegal, Syria, Thailand, Uruguay a border cooperation agreement with Introduced or improved risk-based inspections Brazil, Colombia, Dominican Republic, El Salvador, Mali, harmonizing trade documents be- Haiti, Kenya, former Yugoslav Republic of Macedonia, Madagascar, Mali, Mongolia, tween the 2 countries. Once goods are Philippines, Rwanda, Senegal cleared at Dakar, Malian traders need no Improved procedures at ports Benin, Croatia, Djibouti, Ecuador, Egypt, additional documents. And the number El Salvador, Eritrea, Kenya, Liberia, Madagascar, of checkpoints between Dakar and Ba- nigeria, Ukraine mako has dropped from 25 to 4. Trips Reduced number of trade documents Djibouti, Ecuador, El Salvador, France, Honduras, that used to take 7­10 days now take former Yugoslav Republic of Macedonia, Senegal, Sierra Leone, Thailand only 1 or 2. Recognizing this, Malian traders increasingly use the port of Dakar Improved customs administration Belarus, Botswana, Egypt, Kenya, Liberia, former Yugoslav Republic of Macedonia, Rwanda, rather than Abidjan. Mali also abolished Senegal, Thailand a requirement for an official escort to Introduced or improved single window El Salvador, Korea, Madagascar, Mongolia, the border for all cargo trucks carrying Senegal exports--something that had inevitably Implemented border cooperation agreements Botswana, Mali meant big delays. In Madagascar traders can now Source: Doing Business database. submit customs declarations and pay- transmitted online. Traders can begin exports are part of global supply chains. ments online, thanks to the Madagas- the clearance process before goods arrive To be part of these chains, producers car Community Network (figure 9.3). at the port. Because risk-based inspec- depend on timely delivery of imported Sierra Leone abolished the requirement tions apply, only about 2% of cargo is inputs. Imported materials account for for an export license for coffee. Rwanda physically inspected. It takes only 5 days a third of China's export value for elec- extended the end of customs operating for goods to leave the factory, clear cus- tronic products, for example. They ac- hours at its borders from 6:00 p.m to toms and be on a vessel heading to its count for 55% of export value for Ire- 10:00 p.m. Now fewer trucks stay at the destination. land, 65% for Thailand.5 Economies that border overnight. Other countries might take note. A reduce delays can integrate more rapidly Botswana licensed more customs recent study of 126 economies calculates in global trade. brokers, spurring competition and lead- the loss from export delays at around 1% ing to lower customs brokerage fees. of trade for each extra day. For perishable who reformed in 2007/08? Liberia cut the customs administrative agricultural products the cost is nearly fee from 3% of the cargo value to 1.5%. 3% of the volume of trade for each day's Thirty-four economies made it easier to Kenya extended ports' operating sched- delay.2 Some nonagricultural products trade in 2007/08. Making it possible to ule to 24 hours. In addition, postclear- are time-sensitive too, such as fashion submit customs documents electroni- ance audits allow some traders to fast- apparel and consumer electronics. cally was the most popular reform fea- track their cargo for clearance. Nigeria Another study finds that each extra ture, done in 19 economies (table 9.2). is beginning to reap the rewards from signature an exporter has to collect re- Africa had the most reforms in eas- concessioning its container terminals to duces trade by 4.2%. For high-end ex- ing trade. Senegal was the top reformer, private operators: clearing goods at the ports the reduction is nearly 5%.3 High easing the administrative requirements port of Apapa now takes 2 days less. trade costs constrain participation in for trading across borders. One big In Latin America, El Salvador made global trade for many countries, par- change: linking those involved in the it easier to trade for the second year run- ticularly in Africa. One study finds that clearance process--customs, customs ning. It set up a single window between preferences under the tariff-free regimes brokers, banks, the treasury, traders and customs, government ministries and tax for the U.S. market (under the African several government ministries--through and social security authorities. That cut Growth and Opportunity Act) and the an electronic single-window system. the number of documents traders need European Union (under the Cotonou Traders no longer need to visit each to submit by 2. Guatemala reduced the agreement) are significantly underused.4 of these entities to obtain the required share of goods that are physically in- Delays and cumbersome procedures clearances. Instead, they can fill out a spected from 54% to 33%, thanks to in importing hurt economies too. Many single form. In addition, customs has ongoing implementation of its risk man- 46 DoING BUSINESS 2009 FIGURE 9.3 Egypt continued to reform. It now allows economies reformed. In 2007/08, 11 did. Madagascar speeds imports Time to import (days) customs clearance on companies' prem- Ghana, Kenya, Mauritius, Rwanda and ECD ises. It also monitors the performance of Tanzania reformed in multiple years. high 50 2007 come border agencies to enhance service deliv- In the Middle East and North Africa ery. Djibouti cut the documents required on average, 4 economies reformed each 40 to trade from 8 to 5. Saudi Arabia cut year. In Latin America and the Caribbean port fees by 50%. Morocco is bringing to- reforms ranged from 3 to 8. gether different border agencies through 30 Time cut from speeding ClearanCe 49 days to 27 a port community network to speed the clearance of goods. The most popular reform feature in fa- 2008 Eastern Europe and Central Asia cilitating trade has been to implement 20 kept up the pace of reform. Georgia an electronic data interchange system implemented a risk management sys- (figure 9.5). Electronic transmission of tem, reducing the share of merchandise documents not only speeds the clear- 10 inspected to 10%. Belarus introduced ance of goods; it often reduces the pos- legislative changes that cut the maximum sibilities for paying bribes. "There is an time allowed for customs clearance from old saying--don't pay me a salary, put me 0 10 days to 1. The former Yugoslav Re- in customs," remarks a Honduran freight Documents Port Customs Transport Procedures public of Macedonia purchased 4 mobile forwarder. That changed with the advent scanners, reducing the number of physi- of electronic data processing. But to avoid ECD Source: Doing Business database. high cal inspections carried out. a dual electronic and manual customs come agement system. Uruguay completed its FIGURE 9.2 OECD high-income economies also clearance process, the new systems must automated customs system. Now traders Rankings on trading across borders are based on 3 subindicators carried out reforms. In France traders be complemented by supporting legisla- can send documents toDocument All documents required customs from preparation, can now submit documents electroni- tion authorizing electronic transactions. their own office. Brazilcustoms by customs and introduced an clearance and cally. Fast-track clearance procedures Economies implementing an elec- other agencies technical control, ports electronic manifest system, allowing cus- and terminal handling, were also put into place. Belgium in- tronic data interchange system saw the toms clearance to begin beforeinland cargo 33.3% 33.3% thetransport and handling troduced a paperless customs clearance time to clear goods cut by 3 days on arrives.Documents Time to system. Denmark improved its online average. The reform also helps increase Inand East Asia and Pacific, Korea and to export export import and import customs system. In Austria it is now pos- predictability in clearance times. Before Thailand carried out the most com- sible to use an electronic letter of credit. Pakistan implemented its electronic sys- prehensiveCost reforms. Both introduced 33.3% to export Reforms in some countries made tem, only 4.3% of goods were cleared atabase. internet-based electronic data inter- and import things more complicated. In Equatorial within a day; for a quarter of the goods, change systems and online issuance of Guinea traders used to take their con- clearance took a week. Now 93% of goods trade documents. Traders can submit US$ per 20-foot container, signments from the ports while complet- are cleared within a day.6 customs declarations from anywhere. no bribes or tari s included ing customs formalities. This is no longer Where electronic data interchange Note: See Data notes for details. Singapore, already the leader in trade possible. In Burkina Faso the threshold systems are in place, it is easier to apply FIGURE 9.5 facilitation, is going a step further. It is value triggering inspections has been risk management to customs clearance, Top 5 reform features in trading across borders upgrading its system to a 3-dimensional lowered, even though prices are on the another popular reform. Thirteen econo- Reforms including feature since DB2006 (%) trade platform allowing traders to inter- rise. Now more consignments need to be mies, including Colombia, Madagascar face with government agencies as well as inspected, slowing the process. The Gam- and Mongolia, have introduced risk- local and international businesses. 45% bia reinstated compulsory scanning fees. based inspections alongside electronic Introduced or improved electronic data interchange system In Indonesia a single window started Traders complain that they have to pay transmission of documents. In econo- operating in December 200738%the port in the scanning fee even when their cargo mies that use risk-based inspections, Improved customs administration of Jakarta. The Philippines introduced is not scanned. 19% of containers are inspected on aver- new scanners, reducing the level of phys- age; in economies that do not, 53% are. ical inspection at the ports. In addition, 35% whAt Are the reform trends? Introduced risk management techniques traders can submit customs declarations looking beyond Customs electronically through value added ser- The number of economies implement- While customs reform remains most im- vice providers. In Palau and Tonga trad- 29% ing new reforms to facilitate trade has portant to trading across borders, several Improved port procedures or infrastructure ers can file customs declarations on a been on the increase globally. In 2005 other reforms also play a part. Indeed, USB drive. Customs no longer needs to there were 25 reformers. In 2007/08 in the Doing Business sample, customs there were 34. Africa increasingly took clearance accounts for less than 20% Introduced border cooperation agreements reenter the data, saving time. 14% In the Middle East and North Africa, the lead (figure 9.4). In 2005, 5 African of the time to export, from the time Note: A reform may include several reform features. Source: Doing Business database. US$ per 20-foot container, no bribes or tari s included Note: See Data notesTRADING for details.ACRoSSBoRDERS 47 FIGURE 9.4 FIGURE 9.5 Africa has reformed the most Top 5 reform features in trading Number of reforms easing trade across borders by Doing Business report year Reforms including feature since DB2006 (%) DB2006 DB2007 DB2008 DB2009 Sub-Saharan 45% Africa 27 Introduced or improved electronic (46 economies) data interchange system Latin America 38% & Caribbean 22 Improved customs administration (32 economies) Middle East & 35% North Africa 14 (19 economies) Introduced risk management techniques East Asia & Paci c 13 29% (24 economies) Improved port procedures or infrastructure Eastern Europe & Central Asia 12 14% (28 economies) Introduced border cooperation agreements South Asia Note: A reform may include several reform features. (8 economies) 7 Source: Doing Business database. OECD high income 7 (24 economies) Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. the export contract is concluded to the border," complains a clearing agent in authorities and $48 million a year in costs time the goods leave the port. Approv- Botswana. to economic operators.7 als from ministries, health authorities, More publicity, training and regular In some regions trade is hindered security agencies, inspection agencies, meetings with exporters on the clearance by bureaucratic hurdles at borders. In port authorities, banks and immigration process can also make a difference. In Africa and Central Asia border crossings authorities account for most delays. Jamaica, where such efforts are in place, account for significant delays in trade. Countries increasingly recognize the customs brokers with low error rates are But change has begun. South Africa and importance of a comprehensive approach rewarded with access to fast-track clear- Mozambique are creating a one-stop bor- to trade facilitation. Korea has brought ance procedures, while those with high der post at the Lebombo­Ressano Garcia together 69 government agencies as well error rates face more scrutiny. "Because I crossing. Indeed, regional approaches to as private participants through its single- want my goods cleared quickly, I do not trade facilitation may yield the biggest window system. Senegal has brought accept all documents sent to me by my benefits in both regions. together 15 agencies. El Salvador has clients. I sometimes ask them to bring a linked 3 government departments and clearer invoice," says Loraine, a customs notes continues to expand this network. broker in Jamaica. 1. This example is from the World Bank's Payment of customs duties need Doing Business: Women in Africa (2008a), finding inexpensive reforms not delay the release of cargo. Why not a collection of case studies on African Some needed trade reforms are expen- introduce a bond or financial guaran- entrepreneurs. sive, such as building roads or port infra- tee, allowing goods to be released pend- 2. Djankov, Freund and Pham (forthcoming). structure. But much can be done without ing completion of the paperwork? Many 3. Sadikov (2007). heavy spending. Clarifying the rules is economies, such as Malaysia, have done 4. Bureau, Chakir and Gallezot (2007). an important start. "Sometimes they de- just that. 5. Nordas, Pinali and Geloso-Grosso (2006). mand this document, and other times Countries save costs by synchroniz- 6. Ahmad (2008). they don't. We are at the mercy of the ing documents and procedures at the 7. WTO (2005). officials," says a trader in Uzbekistan. border. Thanks to a border cooperation "We had to go back to South Africa to agreement with Sweden and Finland, retrieve the right form before we could Norway is estimated to have avoided more get permission for the truck to leave the than $9 million a year in costs to customs 48 DoING BUSINESS 2009 Table 9.3 Who makes exporting easy--and who does not? Who makes importing easy--and who does not? Documents (number) Documents (number) Fewest Most Fewest Most France 2 namibia 11 France 2 Burkina Faso 11 Estonia 3 Mauritania 11 Denmark 3 Afghanistan 11 Panama 3 Burkina Faso 11 Sweden 3 Congo, Rep. 12 Canada 3 Congo, Rep. 11 Thailand 3 Fiji 13 Micronesia 3 Kazakhstan 11 Singapore 4 Russian Federation 13 Singapore 4 Malawi 12 Hong Kong, China 4 Eritrea 13 Hong Kong, China 4 Angola 12 Estonia 4 Kazakhstan 13 Denmark 4 Afghanistan 12 norway 4 Kyrgyz Republic 13 Finland 4 Fiji 13 Panama 4 Azerbaijan 14 Sweden 4 Kyrgyz Republic 13 Israel 4 Central African Republic 18 Time (days) Time (days) Fastest Slowest Fastest Slowest Singapore 5 Central African Republic 57 Singapore 3 Venezuela 71 Denmark 5 niger 59 Hong Kong, China 5 Burundi 71 Estonia 5 Kyrgyz Republic 64 Denmark 5 Zimbabwe 73 Hong Kong, China 6 Angola 68 Estonia 5 Kyrgyz Republic 75 netherlands 6 Afghanistan 74 United States 5 Kazakhstan 76 United States 6 Chad 78 Sweden 6 Afghanistan 77 Luxembourg 6 Uzbekistan 80 netherlands 6 Tajikistan 83 norway 7 Tajikistan 82 Luxembourg 6 Iraq 101 Germany 7 Kazakhstan 89 norway 7 Chad 102 Ireland 7 Iraq 102 Germany 7 Uzbekistan 104 Cost (US$ per container) Cost (US$ per container) Least Most Least Most Malaysia 450 Kazakhstan 3,005 Singapore 439 niger 3,545 Singapore 456 Azerbaijan 3,075 Malaysia 450 Burkina Faso 3,630 China 460 Uganda 3,090 China 545 Burundi 3,705 Finland 495 Uzbekistan 3,100 Finland 575 Iraq 3,900 Pakistan 611 Tajikistan 3,150 São Tomé and Principe 577 Zimbabwe 3,999 United Arab Emirates 618 Rwanda 3,275 United Arab Emirates 587 Tajikistan 4,550 Hong Kong, China 625 niger 3,545 Israel 605 Uzbekistan 4,600 Thailand 625 Iraq 3,900 Fiji 630 Rwanda 5,070 Brunei 630 Central African Republic 5,121 Hong Kong, China 633 Central African Republic 5,074 Tonga 650 Chad 5,367 Qatar 657 Chad 6,020 Source: Doing Business database. ENFoRCING CoNTRACTS 49 overview Starting a business FIGURE 10.1 Dealing with construction permits Top 10 reformers in enforcing contracts Employing workers Average improvement Registering property 2007 Getting credit 3% 6% 1. Mozambique Protecting investors 2. Macedonia, former Yugoslav Republic of 3. Bulgaria Paying taxes 2008 4. Romania Trading across borders Enforcing 5. Armenia 6. China contracts 7. Bhutan 8. Belgium 9. Azerbaijan Closing a business 10. Portugal Procedures Time Source: Doing Business database. Tan, a litigation lawyer in Singapore, especially severe in Africa, where 80% of ease of enforcing contracts keep courts does not mind waiting at the supreme the people turn to informal institutions efficient by introducing case manage- court until his case is called. A computer when seeking justice.1 ment, strict procedural time limits FIGUR screen shows the expected wait time for Rank FIGURE 10.5 Justice delayed is often justice de- and specialized commercial courts or are b each case. And a text message on his cell FIGURE 10.1 Specialized commercial courts in Africa help to reduce delays in enforcing contracts Top 10 reformers in enforcing contracts nied. And in many countries only the e-courts; by streamlining appeals; and by phone will alert him when the judge is Time to enforce a contract (days) Days Average improvement rich can afford to go to court. For the making enforcement of judgments faster comm ready to hear his. Meanwhile, he reviews befor 1,000 rest, justiceMozambiquereach. In the absence is out of and cheaper (table 10.1). his oral arguments and enjoys a nice 2007 of efficient courts, firms undertake fewer 2004 In Singapore court documents can lunch at Academy Bistro,6% 3% located in the investments and business transactions. 1. Mozambique 800 2. Macedonia, former Yugoslav Republic of be filed electronically, and each case is Democratic supreme court building. And they prefer to involve only a small 3. Bulgaria Nigeria 2008 monitored from theofmoment the action Republic Congo 2008 Tan and his clients can afford to group of people who know each other 4. Romania is filed until the moment it is finally relax, because they know their cases will from previous dealings. 600 5. Armenia decided. Using case management also Ghana Burkina be resolved expeditiously. In Singapore 6. China Inefficient courts impose big costs. makes it possible to measure the per- Faso it takes only 150 days to resolve a com- recent study on Eastern Europe finds 7. Bhutan Mauritania formance of judges. The right to appeal Rwanda mercial dispute--faster than anywhere A4008. that in countries with slower courts, Belgium to the high court exists only for cases Steps else in the world. firms on average have less bank financ- 9. Azerbaijan above S$50,000 ($35,500). Cases below NotProcedures bringing a commer- everyone Source: Doing Business database. 10. Portugal Note: Se Time ing for new investment. Reforms in other this threshold need prior leave to go to cial dispute to court can expect simi- areas, such as creditors' rights, help in- appeal. lar efficiency. One common obstacle to crease bank lending only if contracts can FIGURE 10.3 Source: Doing Business database. Hong Kong (China) speeds the en- FIGURE doing business in developing countries be enforced before the courts.2 A second Few reforms in the Middle East & North Africa and in South Asia forcement of judgments by allowing the Top 5 is the weakness of courts. The problem is study, on 41 developing countries, finds Number of reforms easing contract enforcement contra by Doing Business report year process to start based on the essentials Reform Table 10.1 that for each 10% improvementDB the DB2005 in2006 DB2007 DB2008 DB2009 Where is enforcing contracts easy--and Eastern Europe FIGURE 10.2 & Central Asia efficiency of commercial dispute resolu- Rankings on enforcing contracts 26 Increas FIGURE 10.5 where not? (28 economies) tion, the informal sector's share in overall Specialized commercialMost Easiest RAnK courts in AfricaRAnK toSub-Saharan difficult help reduce delays in enforcing contracts are based on 3 subindicators economic activity falls by 2.3%.3 Days to resolve Attorney, court and Hong Kong, China Time to enforce a contract (days) Africa Courts serve business best when commercial sale dispute 15 enforcement costs before courts as % of claim value Establis 1,000 Luxembourg Mozambique Congo, Dem. Rep. 173 1 Cameroon 172 2 (46 economies) they are fast, affordable and fair. World- Iceland 2004 3 Syria 174 OECD high income wide, only 35% of businesses covered Latvia 4 Benin 175 13 (24 economies) by the World BankDemocratic Enterprise Surveys 33.3% 33.3% Made e Finland 800 5 Honduras Nigeria 176 believe that the courts in their country Republic Time Cost or more United States 2008 6 Suriname 177 Latin America of Congo & Caribbean 11 9 norway 7 Bangladesh 178 are fair, impartial and uncorrupt.4 (32 economies) Stream Korea 600 8 Angola 179 Ghana Doing Business measures Burkinaeffi- the 33.3% Faso Germany 9 India 180 East Asia Procedures & Paci c ciency of the judicial system in resolving 7 France Mauritania Rwanda 8% 400 10 Timor-Leste 181 (24 economies) a commercial dispute. It looks at the time, Simpli Note: Rankings are the average of the economy rankings on South Asia cost and procedures to enforce a contract Steps to le claim, obtain and enforce judgment the procedures, time and cost to resolve a commercial dispute (8 economies) through the courts1(figure 10.2). through the courts. See Data notes for details. Source: Doing Business database. Note: See Data notes for details. Note: A re Source: Doing Business database. Economies that score well on the Source: Do Middle East & North Africa 1 FIGURE 10.3 (19 economies) FIGURE 10.4 Few reforms in the Middle East & North Africa and in South Asia Top 5 reform features in enforcing Number of reforms easing contract enforcement Note: A reform is counted as 1 reform per reforming economy per year. contracts 50 DoING BUSINESS 2009 Table 10.2 who reformed in 2007/08? Where is enforcing contracts the most efficient--and where the least? Procedures (number of steps) Twelve economies reformed contract en- Fewest Most forcement in 2007/08 (table 10.3). The reforms reduced the time, cost or num- Ireland 20 Guinea 50 Singapore 21 Kuwait 50 ber of steps in court proceedings by in- Hong Kong, China 24 United Arab Emirates 50 troducing specialized commercial courts Rwanda 24 Belize 51 and case management, simplifying rules Austria 25 Iraq 51 for small cases, streamlining appeals Belgium 25 oman 51 and making enforcement of judgments netherlands 25 Timor-Leste 51 more efficient. Iceland 26 Sudan 53 Most reforms took place in East- Luxembourg 26 Syria 55 Czech Republic 27 Brunei 58 ern Europe and Central Asia--in Ar- menia, Azerbaijan, Bulgaria, the former Time (days) Yugoslav Republic of Macedonia and Fastest Slowest Romania. Among OECD high-income Singapore 150 Sri Lanka 1,318 economies, Austria, Belgium and Por- Kyrgyz Republic 177 Trinidad and Tobago 1,340 tugal reformed. In Africa, Mozambique Uzbekistan 195 Colombia 1,346 and Rwanda did. In South Asia, Bhutan Lithuania 210 Slovenia 1,350 was the only economy that improved its Hong Kong, China 211 India 1,420 new Zealand 216 Bangladesh 1,442 courts in 2007/08. In East Asia, China Belarus 225 Guatemala 1,459 was the only reformer. The Middle East Bhutan 225 Afghanistan 1,642 and North Africa had no reforms. Kazakhstan 230 Suriname 1,715 Mozambique, the top reformer in Korea 230 Timor-Leste 1,800 enforcing contracts, reduced the average Cost (% of claim) time to resolve a commercial dispute Least Most from 1,010 days to 730. The newly estab- lished commercial courts have started to Bhutan 0.1 Comoros 89.4 Iceland 6.2 Cambodia 102.7 produce results. Since March 2008 the Luxembourg 8.8 Burkina Faso 107.4 country has also gained 22 new judges-- United States 9.4 Papua new Guinea 110.3 a 10% increase. Besides hiring more norway 9.9 Indonesia 122.7 judges, Mozambique introduced perfor- Korea 10.3 Malawi 142.4 mance measures for them. And court Finland 10.4 Mozambique 142.5 administrators now take care of admin- China 11.1 Sierra Leone 149.5 istrative tasks that judges used to handle, Poland 12.0 Congo, Dem. Rep. 151.8 such as paying creditors after a public Hungary 13.0 Timor-Leste 163.2 auction of a debtor's assets. Source: Doing Business database. In the former Yugoslav Republic of Macedonia, the runner-up reformer, a of the court decision. Fully motivated, fees. Saudi Arabia saw its first female law commercial division of the Skopje civil written court decisions are not needed. graduates--170 of them--in June 2008. court started operating in November The 10 economies with the fastest aver- The Saudi government is sending the 2007, after initial difficulties with al- age times to enforce a contract tend to top 4 to graduate programs abroad, to locating judges were resolved. Starting have specialized commercial courts or prepare them to return as the country's in January 2008, all cases have been specialized commercial sections within first female law professors. Some coun- electronically recorded. The Skopje com- existing courts and limits on the number tries still prohibit women from serving mercial division will soon have 15 ad- and length of adjournments once a case as judges. Others have recently started ditional computers to begin electronic has started. allowing women on the bench. Bahrain, registration of cases. Reducing entry barriers in the mar- which did so in 2003, now has 3 fe- In Rwanda specialized commercial ket for legal services helps. Allowing male judges. And the first female federal courts started operating in May 2008. women to enter the legal profession, judge was appointed in Abu Dhabi in late Three lower commercial courts--in Ki- for example, can increase competition March 2008. gali and in the Northern and Southern among lawyers and reduce attorneys' Provinces--cover commercial disputes ENFoRCING CoNTRACTS 51 Table 10.3 court procedure. Those refusing to do Increasing procedural efficiency--the most popular reform feature in 2007/08 so may be fined. Enforcement officers Increased procedural efficiency at main trial Armenia, Belgium, Bulgaria, former Yugoslav can take measures to prevent parties court Republic of Macedonia, Mozambique from concealing or transferring their Introduced or expanded specialized Azerbaijan, former Yugoslav Republic of assets during or immediately after court commercial courts Macedonia, Rwanda proceedings. And courts can prohibit Made enforcement of judgment more efficient China, Romania parties from leaving the country if they Simplified rules for small claims Bhutan, Portugal are suspected of trying to escape the enforcement of a decision. Established e-courts Austria In South Asia, Bhutan transferred all Streamlined appeals Bulgaria land disputes--which account for about Source: Doing Business database. 30% of cases before the Thimphu district court--to a specialized land commission. with a value below about $37,000. A commercial court in Baku and increasing The measure freed up more of the court's fourth commercial court, attached to the number of commercial court judges time to handle commercial cases. The re- the high court, handles cases above that from 5 to 9. sult: the Thimphu district court reduced value in addition to appeals of decisions In Western Europe, Austria made the average time to resolve commercial from the 3 lower courts. Commercial electronic filing mandatory in the civil disputes from 275 days to 225. courts not only resolve disputes faster; courts. All filings from lawyers in civil they also bring the needed expertise to litigation and enforcement proceedings whAt Are the reform trends? commercial cases. now go through an electronic data chan- Bulgaria shortened trial times by nel operated by the Ministry of Justice. Reformers considering ways to improve requiring judges to refuse incomplete And judgments are delivered by e-mail the regulatory environment for busi- court filings rather than allow multiple rather than by the old hard-copy notifica- nesses often shy away from tackling extensions. To ensure compliance with tion process. court reforms. This is not surprising. The deadlines, disciplinary sanctions now Belgium adopted a law in 2007 to success rate of court reforms is low: on apply to judges who systematically vio- speed court procedures. The law intro- average, only 1 in 4 attempted reforms late them. Bulgaria also reformed its ap- duced a mandatory procedural calen- succeed in reducing costs and delays. peals process. Appeals are now possible dar that includes binding time limits to Even successful reforms often take years only on the basis of newly discovered submit written pleadings. The agenda to produce visible results. facts and only against judgments exceed- is fixed by the parties or, if they fail As a general rule, economies that ing lev 1,000 (about $800). And final ap- to agree, by the judge. If judges fail to rank high on the ease of enforcing con- peals before the supreme court have been render a judgment within a month after tracts continually reform their courts limited to substantive issues. hearing a case, they are subject to disci- to adjust to changing business realities. Romania simplified the enforce- plinary sanctions. A separate law aims Denmark is an example. In 2006 it intro- ment of judgments by eliminating the to encourage experts to produce their duced special rules for cases below about need for an enforcement order and al- reports more quickly by having the court $8,600. That reduced the number of cases lowing the attachment of credit balances control the payment of their fees. before the general courts in Copenhagen and accounts receivable. The reform re- Portugal expanded the scope of its by 38%. Reformers did not stop there. duced the time to enforce a judgment by simplified proceedings to include all In March 2008 a new law introduced a month, from 120 days to 95. cases with a value up to 30,000. mediation after a successful pilot showed In Armenia procedural rules that China adopted a new set of proce- that two-thirds of all cases referred to became effective in January 2008 intro- dural rules. The focus was on speeding mediation in 2003­05 resulted in an duced a new principle: all court deci- the enforcement of judgments. In East amicable settlement. The message: stay sions become enforceable 1 month after Asia enforcement accounts for 34% on focused on improvement, even if you are being issued. In addition, a May 2007 law average of the time needed to resolve a already doing well. established specialized criminal and ad- commercial dispute--the largest share ministrative jurisdictions and a new civil among all regions. In China, enforcing a introduCing CommerCial Courts court that will deal with the financially judgment takes up almost half the total in afriCa most important cases. time to resolve a commercial dispute. The most popular reform feature in Azerbaijan reduced the average time To reduce the time for enforcement, Africa over the past 5 years has been to enforce a contract from 267 days to China's new rules require parties to dis- introducing specialized commercial 237 by establishing a second specialized close their assets at the beginning of the courts or commercial sections within 400 Steps to le claim, obtain and enforce judgment Source: Doing Business database. Note: See Data notes for details. 52 DoING BUSINESS 2009 FIGURE 10.3 FIGURE 10.4 Few reforms in the Middle East & North Africa and in South Asia Top 5 reform features in enforcing Number of reforms easing contract enforcement contracts by Doing Business report year Reforms including feature since DB2005 (%) DB2005 DB2006 DB2007 DB2008 DB2009 Eastern Europe 43% & Central Asia 26 Increased procedural e ciency (28 economies) Sub-Saharan 18% Africa 15 (46 economies) Established or expanded commercial courts OECD high income 13 12% (24 economies) Made enforcement of judgment cheaper or more e cient Latin America & Caribbean 11 9% (32 economies) Streamlined appeals East Asia & Paci c 7 8% (24 economies) Simpli ed rules for small claims South Asia (8 economies) 1 Note: A reform may include several reform features. Source: Doing Business database. Middle East & North Africa 1 (19 economies) FIGURE 10.1 Note: A reform is counted as 1 reform per reforming economy per year.Top 10 reformers in enforcing contracts Source: Doing Business database. Average improvement existing courts. Some African countries newly established specialized courts. But 2007 temala, Honduras and Mexico are now have a longer track record with spe- a balance must be struck 6% 3% between access working on similar reforms. And Colom- 1. Mozambique cialized courts or divisions--including to justice and a reasonable caseload for bia2.plans to extend oral proceedings to Macedonia, former Yugoslav Republic of Kenya, Madagascar, Tanzania, Uganda the new courts. A pragmatic approach is commercial cases over the next 4 years. 3. Bulgaria 2008 and Zambia. to lower minimum thresholds as courts 4. Romania 5. Armenia In El Salvador the legislature is close In 7 African countries that intro- are gradually able to accept more cases. to adopting a bill to make court cases, 6. China duced commercial courts or sections This is better than having courts inun- including commercial cases, oral. Now 7. Bhutan in the past 5 years--Burkina Faso, the dated with cases from the start. everything takes place in writing be- 8. Belgium Democratic Republic of Congo, Ghana, tween the parties, with little interven- 9. Azerbaijan Mauritania, Mozambique, Nigeria and moving to oral proCeedings tion from the judge. In the future there 10. Portugal Rwanda--the average time to resolve a in latinProcedures ameriCa Time will be a preliminary hearing during commercial dispute dropped by about Countries in Latin America have sped which the judge will first try to reconcile 19%, from 604 days to 492 (figure 10.5). criminal cases by using oral proceed- the parties. Failing that, the judge will Source: Doing Business database. Because judges must be hired and ings rather than an exchange of written determine the facts and evidence to be trained, rules adjusted and funding en- documents. Argentina and Chile started presented in the case. At a second and sured, achieving such reductions in time this trend in the 1990s. Colombia, Gua- final hearing the parties, witnesses and FIGURE 10.2 usually takes years. In Ghana, for ex- Rankings o ample, a commercial division began op- FIGURE 10.5 Specialized commercial courts in Africa help to reduce delays in enforcing contracts are based o erating in its high court in March 2005. Time to enforce a contract (days) Days to resol Doing Business 2008 records a drop in Mozambique commercial s before courts time from 552 days to 487--more than 1,000 2004 2 years later. Specialized commercial courts are 800 Democratic Nigeria Republic often criticized because they deal only 2008 of Congo with the financially most important cases. 600 Ghana Those in Tanzania, for example, accept Burkina Faso only cases with a value 66 times income Mauritania Rwanda per capita. In Zambia it is 15 times income 400 per capita. Minimum thresholds can be Steps to le c justified as a way to avoid overloading Source: Doing Business database. Note: See Data no FIGURE 10.3 FIGURE 10.4 Few reforms in the Middle East & North Africa and in South Asia Top 5 reform ENFoRCING CoNTRACTS 53 experts will be questioned. Under the imposing striCt deadlines notes new rules the judge must issue a written In 1995 the "arbitrazh courts" became judgment within 15 days after the second responsible for dealing with commercial 1. Wojkowska (2006). hearing. disputes in the Russian Federation. In 2. Safavian and Sharma (2007). While oral proceedings are a re- 2002, to make proceedings faster, the 3. Dabla-Norris, Gradstein and Inchauste cent trend in Latin America, countries Russian Federation revised its commer- (2008). in other regions have a longer history cial procedural code. Its most signifi- 4. World Bank Enterprise Surveys (http:// with them. Take Luxembourg, which cant innovation was to introduce strict www.enterprisesurveys.org). ranks second on the ease of enforcing mandatory time limits: 2 months for contracts. There, parties do not exchange a full hearing, 1 month for accelerated long, written pleadings in commercial procedures. cases. Instead, they exchange only the Most Central Asian countries cop- written evidence they intend to rely on ied the Russian procedural rules, includ- during oral arguments before the judge. ing the strict deadlines. Judges are held This saves several months. accountable for respecting the deadlines, with those who do best standing better chances for promotion. Not surprisingly, of the 10 economies with the fastest aver- age times to enforce a contract, half are in Eastern Europe and Central Asia. 54 DoING BUSINESS 2009 overview Starting a business FIGURE 11.1 Dealing with construction permits Higher recovery rates associated with more access to credit Employing workers Percentage of rms perceiving Private credit as % of GDP access to credit as an obstacle Registering property Getting credit 120 40 Protecting investors 100 30 Paying taxes 80 Trading across borders 60 20 Enforcing contracts Closing a 40 10 20 business 0 0 Lowest Highest Lowest Highest Economies ranked by recovery rate, quintiles Economies ranked by recovery rate, quintiles Note: Relationships are signi cant at the 1% level and remain signi cant when controlling for income per capita. Source: Doing Business database; World Bank, World Development Indicators database; World Bank Enterprise Surveys. Carlos, the owner of a large Colombian FIGURE 11.3 vency laws are most effective, creditors-- ganized as a going concern rather than FIGURE 11.2 manufacturing firm, got bad news: his Higher recovery rates in economies with specialized courts and trustees Rankings on Recovery rate (cents on the dollar) confident that they will be able to collect liquidated through piecemeal sales. And are based o main customer had just entered bank- on loans--are more likely to lend.1 50 most allow creditors significant input Function of tim ruptcy. Carlos feared that it might take The benefits of efficient bankruptcy YES into the appointment of administrators such as lending years to recover the company's loan-- regulations are particularly evident when of the company 45 and require special qualifications for to operate and that his business could suffer harm. comparing rich economies. Recent stud- trustees (figure 11.3). FIGURE 11.1 But there is good news too. Co- ies in Europe find that actual returns 40 In Canada, Ireland, Japan, Norway YES Higher recovery rates associated with more access to credit lombia's new insolvency law came into to creditors are 92% of the value of the YES and Singapore foreclosure, reorganiza- Percentage of rms perceiving NOtion or liquidation is completed within access to credit as an obstacle loan in the United Kingdom, 80% in the Private credit as % of GDP effect at the end of 2007, streamlining 35 bankruptcy procedures. Before, a debtor Netherlands, 67% in Germany and 56% NO a year (table 11.1). CanadaNOand Ireland 120 could object to every claim from any in France.2 Why the big spread? In part 40 30 have specialized bankruptcy courts and 100 creditor, greatly delaying the court pro- because it takes only a year to finish the statutory time limits. They also limit pro- cess. Now all objections must be resolved 30 Are there specialized Are there minimum 80 insolvency process in London, 13 months Can creditors bankruptcy courts? quali cations for trustees? cedural appeals.appoint Denmark introduced trustees? in one court hearing. The new law also Source: Doing Business database. in Amsterdam and 15 months in Berlin, a "floating charge" in 2006 to allow se- Note: Time and co See Data notes fo tightens procedural time limits. And it 60 but almost 2 years in Paris, according to 20 cured creditors to take security over an gives creditors more power to influence 40 Doing Business data. 10 entire business. This increases the likeli- the proceedings, such as allowing them 20 Good bankruptcy laws do 3 main hood that a viable business will be sold to0remove and replace the liquidator. FIGURE 11.4 MostLowest things. They seek to rehabilitate viable 0 as a going concern. In Colombia, Kuwait, FIGURE 11.5 Efficient bankruptcy regulations Lowest Highest businesses and liquidate unviable ones. reforms in Eastern Europe & Central Asia and rich economies Highest improve access to credit. Where insol- Economies ranked by recovery rate, quintiles They aim to maximizeNumber received Economies ranked by recovery rate,ofquintiles reforms making it easier to close a business Norway and Singapore it costs only about Top 5 reform the value by Doing Business report year 1% of the bankrupt estate's value to re- closing a bus Note: Relationships are signi cant at the 1% level and remain signi cant when controlling for income per capita. Reforms includ Source: Doing Business database; World Bank, World Development Indicators database; World Bank Enterprise Surveys. Table 11.1 by creditors, shareholders, employees DB2005 DB2006 DB2007 solve insolvency (table DB DB2008 11.2). 2009 Where is it easy to close a business-- Eastern Europe & Central Asia and other stakeholders by requiring that 21 FIGURE 11.3 and where not? (28 economies) businesses be turned around, sold as FIGURE 11.2 Granted power Higher recovery ratesMosteconomiesRecoveryspecialized courts and trustees Recovery Recovery rate (cents on the dollar)difficult Easiest in with going concerns or liquidated--which- Rankings on closing a business rate rate OECD high income are based on 1 subindicator 19 Japan ever generates the greatest total value. 50 92.5 Liberia 8.3 (24 economies) Function of time, cost and other factors Introduced or t Singapore YES 91.3 Suriname 8.1 And they establish a system for clearly East Asia such as lending rate and the likelihood and streamline norway of the company continuing 45 89.0 Mauritania 6.7 & Paci c ranking creditors. Countries with6 laws to operate Canada 88.7 Venezuela 6.0 (24 economies) meeting these 3 objectives achieve a Established or p Finland 87.3 Congo, Dem. Rep. 5.4 Latin America higher recovery rate than countries with- reorganization Ireland 40 86.6 Philippines 4.4YES & Caribbean YES 6 (32 economies) out such laws. Denmark 86.5 Micronesia 3.5 100% Doing Business studies the time, cost Developed the Belgium 35 86.3 Haiti 2.7 NO Sub-Saharan Recovery rate United Kingdom 84.2 Africa and outcomes of bankruptcyNOproceedings NO Zimbabwe 0.0 3 7% netherlands (46 economies) involving domestic entities. Speed, low 30 82.7 Central African 0.0 Republic Middle East & cost and continuation of viable business Established a Are there specialized Are there minimum North Africa Can2 creditors Note: Rankings are based on the recovery rate: how many cents (19 economies) operations characterize the top-perform- Note: A reform may on the dollar claimants (creditors, tax authorities and employees) bankruptcy courts? quali cations for trustees? ing economies. Inappointeconomies busi- these trustees? Note: Time and cost do not count separately for the ranking. Source: Doing Busin Source: Doing Business database. recover from the insolvent firm. See Data notes for details. See Data notes for details. Source: Doing Business database. South Asia nesses are more likely to be sold or reor- (8 economies) 1 Note: A reform is counted as 1 reform per reforming economy per year. Source: Doing Business database. FIGURE 11.4 FIGURE 11.5 Lowest Highest Lowest Highest Economies ranked by recovery rate, quintiles Economies ranked by recovery rate, quintiles Note: Relationships are signi cant at the 1% level and remain signi cant when controlling for income per capita. Source: Doing Business database; World Bank, World Development Indicators database; World Bank Enterprise Surveys. CLoSING A BUSINESS 55 FIGURE 11.3 Higher recovery rates in economies with specialized courts and trustees strengthening trustees' role and powers. FIGURE 11.2 Recovery rate (cents on the dollar) Cambodia adopted the 2007 Bankruptcy Rankings on closing a business are based on 1 subindicator 50 Law, its first regulating the bankruptcy of Function of time, cost and other factors YES private enterprises. The law introduces a such as lending rate and the likelihood of the company continuing 45 reorganization procedure to restructure to operate insolvent companies. 40 YES Five OECD high-income economies YES joined the list of reformers in 2007/08. 100% 35 NO Finland streamlined court-supervised Recovery NO reorganization. Now a simple majority rate NO 30 of creditors can approve simplified re- Are there specialized Are there minimum Can creditors organization plans; before, unanimous bankruptcy courts? quali cations for trustees? appoint trustees? consent was required. Finland revised Time and cost do not count separately for the ranking. Source: Doing Business database. itsNote:Restructuring of Enterprises Act, See Data notes for details. accelerating hearings and making the entire process more flexible. Germany who reformed in 2007/08? Four Eastern European economies amended its insolvency code to make FIGURE 11.4 Most reforms in Eastern Europe & Central Asia and rich economies joined Poland in streamlining bank- itFIGURE easier to maintain a debtor's business 11.5 Poland was the top reformer inreforms a business in 2007/08Number 11.3).byIts (tableof closingmaking ruptcy procedures. Latvia passed a new it easier to close a business as a going concern. The new law allows Top 5 reform features in Doing Business report year insolvency law in November 2007. Now the insolvency court to suspend enforce- closing a business Law on Trustee Licensing tookDBeffect on DB2005 2006 DB2007 financially distressed DB DB2008 companies can 2009 ment actions against assets essential to Reforms including feature since DB2005 (%) Eastern Europe & Central Asia October 10, 2007. The new law tightened choose to continue operating by pursu- continuing the business. 29% 21 (28 economies) professional requirements for adminis- ing reorganization. Like Poland, Latvia Granted power to creditors Portugal cut the formality of pub- OECD trators to ensure they have the skills and also tightened the qualification stan- lishing insolvency notices in newspapers. high income education needed to oversee bankruptcy dards for bankruptcy administrators. So 19 It also introduced a fast-track procedure 28% (24 economies) proceedings. Obtaining a trustee's li- did Bosnia and Herzegovina. The Czech Introduced or tightened statutory time limits East Asia and streamlined appeals Table 11.2 & Paci c cense now requires passing an exam in 6 Republic's Insolvency Act took effect on Where is bankruptcy the most efficient--22% (24 economies) economics, law, finance and manage- January 1, 2008. The law introduces re- and where the least? Established or promoted Latin America ment. The reform also limits trustees' organization as the preferred method for reorganization procedure & Caribbean resolving insolvency, mandates stricter Time (years) (32 economies) pay to 3% of the bankrupt estate's6value, 16% down from 5%. deadlines, establishes an electronic insol- Fastest Slowest Developed the trustee profession Sub-Saharan Ireland 0.4 Ecuador 5.3 Africa Three economies in3 Latin America vency register and sets new qualification (46 economies) and the Caribbean rank close behind standards for trustees. Japan 7% 0.6 Indonesia 5.5 Canada 0.8 Haiti 5.7 Middle East & Poland as top reformers. Colombia, the Bulgaria passed 2 laws: the Civil Established a rst bankruptcy law North Africa 2 Singapore 0.8 Philippines 5.7 (19 economies) runner-up reformer, introduced 2 new Procedure Code and the Law for the Belgium Note: A reform may include several reform features. 0.9 Belarus 5.8 insolvency proceedings: a reorganization Commercial Registry. The first specifies Source: Doing Business database. Finland 0.9 Angola 6.2 South Asia procedure to restructure insolvent com- that appeals will now take place at 2 lev- norway 0.9 Czech Republic 6.5 (8 economies) 1 panies and a mandatory liquidation pro- els: first before the court of appeals and Australia 1.0 Maldives 6.7 cedure. Its new insolvency law tightens Note: A reform is counted as 1 reform per reforming economy per year. then before the supreme court. Bulgaria's Belize 1.0 Mauritania 8.0 time limits for negotiating reorganization Source: Doing Business database. supreme court will be the final arbiter, Iceland 1.0 India 10.0 agreements. Before, the term allowed was with the discretion to decide whether Cost (% of estate) 6 months, with a possible extension of 8 or not to hear a case. Before, court deci- Least Most months. The new law limits the term to 4 sions could be appealed only before the Colombia 1.0 Micronesia 38.0 months, and the extension to 2. supreme court--which usually sent cases Kuwait 1.0 Philippines 38.0 Mexico amended its bankruptcy back to the district court--resulting in norway 1.0 Samoa 38.0 law. Now debtors and creditors may long delays. Another first for Bulgaria: Singapore 1.0 Solomon Islands 38.0 enter into a reorganization agreement major decisions and rulings of the bank- Bahamas, The 3.5 Vanuatu 38.0 at any stage of the insolvency procedure. ruptcy court are posted on the commer- Belgium 3.5 Venezuela 38.0 St. Vincent and the Grenadines enacted cial registry's website. Brunei 3.5 Sierra Leone 42.0 a bankruptcy law in 2007. The law is the In East Asia and Pacific, Hong Kong Canada 3.5 Ukraine 42.0 Finland 3.5 Liberia 42.5 country's first set of rules regulating the (China) and Cambodia were the only Georgia 3.5 Central African 76.0 bankruptcy of private enterprises since reformers. Hong Kong (China) issued the Republic its independence. Bankruptcy Amendment Rules for 2007, Source: Doing Business database. FIGURE 11.1 56 DoING BUSINESS 2009 Higher recovery rates associated with more access to credit Percentage of rms perceiving Table 11.3 Private credit as % of GDP ering creditors. access to credit as an obstacle Establishing or promoting reorganization procedures--a popular reform feature in 2007/08 120 40 Elsewhere in the world reform has 100 been moving more slowly. The 10 reforms Established or promoted reorganization procedure Colombia, Czech Republic, Finland, Germany, in Latin America and the Caribbean, 30 Greece, Latvia, Mexico, new Zealand 80 Sub-Saharan Africa and South Asia have Developed the trustee profession Bosnia and Herzegovina, Czech Republic, Hong 60 ranged from introducing stricter dead- 20 Kong (China), Latvia, Poland 40 lines to establishing specialized bank- 10 Introduced or tightened time limits and streamlined Bulgaria, Colombia, Portugal, Saudi Arabia 20 ruptcy courts. In 2006 Burundi enacted procedural appeals 0 its0 first bankruptcy law, setting clear time Established a first bankruptcy law Cambodia, St. Vincent and the GrenadinesHighest Lowest limitsLowestprocedures. In the Middle East for Highest Granted priority to secured creditors Czech Republic Economies ranked by recovery rate, quintiles and North Africa only Tunisia and Saudi Economies ranked by recovery rate, quintiles Note: Relationships are signi cant at the 1% level and remain signi cant when controlling for income per capita. Source: Doing Business database. Arabia have reformed. Source: Doing Business database; World Bank, World Development Indicators database; World Bank Enterprise Surveys. for debtors with less than 5,000 in FIGURE 11.3 whAt Are the reform trends? expanding Creditors'rights FIGURE 11.2 assets and new procedures to acceler- Higher recovery rates in economies with specialized courts and trustees Expanding creditors' rights has been the Rankings o ate payments to insolvency administra- Reform continues even in the jurisdic- Recovery rate (cents on the dollar) most popular reform feature over the past are based o tors. In addition, Portugal limited pro- tions withYES best performance. Doing 50 the 5 years (figure 11.5). Seventeen econo- Function of tim such as lending cedural appeals by unifying its appeals Business has recorded 58 reforms making mies have empowered creditors: China, of the company process and raising the value threshold it45easier to close a business in the past 5 the Czech Republic, Denmark, Finland, to operate for claims heard in the courts of first and years. Most focused on expanding credi- France, Hungary, Indonesia, Italy, Korea, second instance. In the future, appeals tors' rights and speeding bankruptcy 40 YES YES Poland, Portugal, Puerto Rico, Roma- of appeals court decisions that confirm proceedings in the court. NO nia, Serbia, Slovakia, the United States first-instance decisions will be possible 35 EconomiesNO Eastern Europe and in and Vietnam. Giving creditors more say NO only in limited circumstances. This is Central Asia have had the most reforms in the process speeds the resolution of expected to cut the number of appeals making it easier to close a business in 30 bankruptcy and is likely to result in the before the supreme court. the past 5 years, especially in speeding Are there specialized Are there minimum continuation of theCan business. Allowing creditors New Zealand introduced a reorga- bankruptcy courts? quali cations for trustees? bankruptcy proceedings (figure 11.4). creditors a greaterappointintrustees? role decision mak- Note: Time and c nization procedure similar to the one High-income OECD economies follow Source: Doing Business database. ing increases the recovery rate. See Data notes f in Australia. The aim is to provide an close behind, focusing more on empow- Reforms expanding the powers of alternative to liquidation and receiver- ship and maximize a company's chances FIGURE 11.4 of continuing as a going concern. Greece Most reforms in Eastern Europe & Central Asia and rich economies FIGURE 11.5 Top 5 reform thoroughly revised its bankruptcy system Number of reforms making it easier to close a business by Doing Business report year closing a bu to maximize creditors' recovery of debt. DB2005 DB2006 DB2007 DB2008 DB2009 Reforms includ A new law aims to reorganize finan- Eastern Europe cially distressed companies, preserve the & Central Asia 21 (28 economies) Granted power business assets, treat creditors equally and prevent piecemeal sale. This law is OECD high income 19 expected to lead to a boom in restruc- (24 economies) Introduced or t turings and, together with a better early East Asia and streamline detection system, allow more companies & Paci c 6 (24 economies) to continue as going concerns. Established or reorganization Saudi Arabia was the only reformer Latin America & Caribbean 6 in the Middle East and North Africa. Its (32 economies) Developed the Ministry of Commerce introduced strict Sub-Saharan deadlines for bankruptcy procedures. Africa 3 (46 economies) 7% Auctions of debtors' assets are expected Middle East & Established a to take place quicker than before. North Africa 2 Note: A reform ma Bolivia made going through bank- (19 economies) Source: Doing Busin ruptcy more complex, by suspending South Asia applications for voluntary restructuring. (8 economies) 1 The only option now is a bankruptcy pro- Note: A reform is counted as 1 reform per reforming economy per year. cedure that typically takes years. Source: Doing Business database. Note: Time and cost do not count separately for the ranking. See Data notes for details. CLoSING A BUSINESS 57 FIGURE 11.5 expanded the powers of creditors' com- ing, and the court has 30 days to issue a Top 5 reform features in closing a business mittees so they can file and vote on reor- decision on an appeal. Slovakia tightened ganization plans. China adopted a new time limits, speeding bankruptcy by at 9 Reforms including feature since DB2005 (%) bankruptcy law in 2007, its first since least 9 months in 2006. 29% 21 1949, significantly strengthening credi- Granted power to creditors tors' rights. Secured creditors now rank getting the foCus right first in payment priority.4 Vietnam also When it comes to reforming bankruptcy 19 28% Introduced or tightened statutory time limits gave higher priority to secured creditors, regulations, it is often assumed that re- and streamlined appeals and removed priority for tax claims, organization is always the best course 22% when it changed its 1993 bankruptcy of action. But in low-income economies Established or promoted law in 2004. reorganization does not always lead to reorganization procedure the highest return for creditors. 16% speeding bankruptCy proCeedings Mandatory reorganization proce- Developed the trustee profession The second most popular reform feature dures in some African economies often in closing a business has been intro- make matters worse. Take for example 7% Established a rst bankruptcy law ducing or tightening deadlines in court Benin, the Republic of Congo and Côte procedures and streamlining appeals. d'Ivoire. All have mandatory reorganiza- Note: A reform may include several reform features. Source: Doing Business database. Sixteen economies have undertaken such tion provisions, but their judicial systems reforms: Armenia, Bulgaria, Colombia, lack the capacity to handle these types of creditors have been most concentrated Estonia, Georgia, Lithuania, Portugal, cases. Among the main problems: fre- among OECD high-income economies. Puerto Rico, Romania, Saudi Arabia, Ser- quent adjournments and courts that fail Finland gave creditors the right to set bia, Slovakia, Spain, Tunisia, the United to hand down timely decisions. up a creditors' committee to advise the Kingdom and the United States. Impos- In such systems, reorganization administrator. France and Korea now ing time limits facilitates fast resolution usually ends in liquidation. The time allow the creditors' committee to vote on of bankruptcy, avoiding deterioration in spent in reorganization only delays the the reorganization plan. Denmark en- a company's value over time. process and increases the cost. Reforms couraged creditors to report to the court This type of reform has been most that focus on debt enforcement or fore- any trustee actions that appear to delay popular in Eastern Europe and Central closure are more likely to show results in the process. The court can then replace Asia, where no fewer than 8 economies those countries. And reforms that ensure the trustee if it decides--based on the have reformed in this direction in the properly resourced and well-functioning creditors' reports--that the trustee is past 5 years. Romania, Bulgaria and courts can help a larger number of viable incompetent. Estonia restricted procedural appeals. businesses to reorganize successfully. Several economies, including Fin- In 2004 Romania reduced the time al- Overall, economies around the land and France, granted higher prior- lowed for each appeal from 30 days to world are reforming toward more ef- ity to creditors in bankruptcy claims. 10, shortening the total duration of the ficient bankruptcy systems. In the years France gave a "supersecured" position to bankruptcy procedure from 55 months since Doing Business started collecting creditors that lend money to distressed to 40. Bulgaria restricted opportuni- data on the topic, the average time to companies, giving them priority over ties for procedural appeals. Before the complete bankruptcy proceedings has previous secured creditors. That makes it reform, the initial decision could be ap- declined by 4%. easier for such companies to obtain new pealed to 2 higher levels of courts. Now loans and continue operating. only 1 appeal is possible. Estonia allows notes OECD high-income economies have debt recovery to continue even when also promoted reorganization. Finland, there is an appeal, avoiding disruption 1. Djankov and others (2006). France, Italy and Korea made reorganiza- of the process. 2. Davydenko and Franks (2008) and tion more accessible to troubled compa- Armenia, Bulgaria, Estonia, Geor- de Jong and Couwenberg (2007). nies. Italy now allows distressed compa- gia, Lithuania, Serbia and Slovakia in- 3. Beye and Nasr (2008). nies to seek an agreement with creditors troduced or tightened procedural time 4. Only wage claims made before the new before entering formal bankruptcy and limits. Armenia passed a new law in- law came into effect have priority over secured creditors. with no prerequisites. That permits the corporating time limits into the reor- companies to continue operating.3 ganization procedure. Serbia set strict Besides OECD high-income econo- time limits: claimants have 5 days to mies, several in East Asia and Pacific raise objections to the resolution, appeals also empowered creditors. Indonesia must be made within 8 days after the rul- 58 Doing Business 2009 References Benmelech, Effi, and Nittai Bergman. 2008. Coma-Cunill, Roger, and Marie Delion. 2008. "Vintage Capital and Creditor Protection." "Honduras: Slashing the Time to Register Working Paper, Department of Econom- a Property from 18 Months to 15 Days." ics, Harvard University, Cambridge, MA. 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Doing Business 2008: Compar- ing Regulation in 178 Economies. Wash- ington, DC: World Bank Group. ------. 2007c. Reforming Collateral Laws and Registries: International Best Practices and the Case of China. Washington, DC: World Bank Group. http://www.ifc.org/ifcext/ fias.nsf/Content/FIAS_Resources _Country_Reports. ------. 2008a. Doing Business: Women in Africa. Washington, DC: World Bank Group. ------. 2008b. World Development Indica- tors 2008. Washington, DC: World Bank Group. 61 Data notes simple business case to ensure compara- valid across economies. Finally, the data bility across economies and over time-- not only highlight the extent of specific with assumptions about the legal form regulatory obstacles to doing business of the business, its size, its location and but also identify their source and point the nature of its operations. Surveys are to what might be reformed. administered through more than 6,700 local experts, including lawyers, busi- Limits to what is measured ness consultants, accountants, freight The Doing Business methodology has forwarders, government officials and 5 limitations that should be considered other professionals routinely adminis- when interpreting the data. First, the tering or advising on legal and regula- collected data refer to businesses in tory requirements (table 12.1). These the economy's largest business city and experts have several (typically 4) rounds may not be representative of regulation of interaction with the Doing Business in other parts of the economy. To ad- team, involving conference calls, writ- dress this limitation, subnational Doing ten correspondence and visits by the Business indicators were created for 6 The indicators presented and analyzed team. For Doing Business 2009 team economies in 2007/08: China, Colombia, in Doing Business measure business members visited 73 economies to verify Egypt, Morocco, Nigeria and the Philip- regulation and the protection of property data and recruit respondents. The data pines.2 Six other subnational studies are rights--and their effect on businesses, from surveys are subjected to numerous under way, in Central Asia, Southeast especially small and medium-size do- tests for robustness, which lead to revi- Europe, Indonesia, the Russian Federa- mestic firms. First, the indicators docu- sions or expansions of the information tion, Southeast Asia and Ukraine. And ment the degree of regulation, such as the collected. some existing studies are updated annu- number of procedures to start a business The Doing Business methodology ally, such as those in India, Mexico and or to register and transfer commercial offers several advantages. It is trans- Pakistan. These subnational studies point property. Second, they gauge regulatory parent, using factual information about to significant differences in the speed of outcomes, such as the time and cost to what laws and regulations say and al- reform and the ease of doing business enforce a contract, go through bank- lowing multiple interactions with local across cities in the same economy. ruptcy or trade across borders. Third, respondents to clarify potential misin- Second, the data often focus on they measure the extent of legal pro- terpretations of questions. Having rep- a specific business form--generally a tections of property, for example, the resentative samples of respondents is limited liability company (or its legal protections of investors against looting not an issue, as the texts of the relevant equivalent) of a specified size--and may by company directors or the range of laws and regulations are collected and not be representative of the regulation assets that can be used as collateral ac- answers checked for accuracy. The meth- on other businesses, for example, sole cording to secured transactions laws. odology is inexpensive and easily repli- proprietorships. Third, transactions de- Fourth, they measure the flexibility of cable, so data can be collected in a large scribed in a standardized case scenario employment regulation. Finally, a set of sample of economies. Because standard refer to a specific set of issues and may indicators documents the tax burden on assumptions are used in the data collec- not represent the full set of issues a busi- businesses. For details on how the rank- tion, comparisons and benchmarks are ness encounters. Fourth, the measures of ings on these indicators are constructed, time involve an element of judgment by see Ease of doing business, page 79. Table 12.1 How many experts does Doing Business the expert respondents. When sources The data for all sets of indicators in consult? indicate different estimates, the time Doing Business 2009 are for June 2008.1 Number of indicators reported in Doing Business Three new economies--The Bahamas, Indicator set contributors represent the median values of several Bahrain and Qatar--were added to the Starting a business 1,166 Dealing with construction permits 739 responses given under the assumptions sample, now comprising 181 economies. Employing workers 810 of the standardized case. Registering property 907 Finally, the methodology assumes Methodology Getting credit 1,033 that a business has full information on Protecting investors 653 what is required and does not waste The Doing Business data are collected in Paying taxes 862 time when completing procedures. In a standardized way. To start, the Doing Trading across borders 817 practice, completing a procedure may Business team, with academic advis- Enforcing contracts 767 take longer if the business lacks informa- ers, designs a survey. The survey uses a Closing a business 727 tion or is unable to follow up promptly. 62 Doing Business 2009 Alternatively, the business may choose to data ChaLLenges and revisions Starting a buSineSS disregard some burdensome procedures. Most laws and regulations underlying the For both reasons the time delays reported Doing Business data are available on the Doing Business records all procedures in Doing Business 2009 could differ Doing Business website at http://www that are officially required for an entrepre- from the perceptions of entrepreneurs .doingbusiness.org. All the sample sur- neur to start up and formally operate an reported in the World Bank Enterprise veys and the details underlying the indi- industrial or commercial business. These Surveys or other perception surveys. cators are also published on the website. include obtaining all necessary licenses Questions on the methodology and chal- and permits and completing any required Changes in what is measured lenges to data can be submitted through notifications, verifications or inscriptions The methodology for one of the Doing the website's "Ask a Question" function at for the company and employees with rel- Business topics--getting credit--im- http://www.doingbusiness.org. evant authorities (table 12.2). proved this year. Three main changes Doing Business publishes 8,900 After a study of laws, regulations were made, affecting only the strength of indicators each year. To create these in- and publicly available information on legal rights index. First, a standardized dicators, the team measures more than business entry, a detailed list of proce- case scenario with specific assumptions 52,000 data points, each of which is dures is developed, along with the time was introduced to bring this indicator made available on the Doing Business and cost of complying with each proce- into line with other Doing Business indi- website. Data time series for each indi- dure under normal circumstances and cators. Second, the indicator now focuses cator and economy are available on the the paid-in minimum capital require- not on tangible movable collateral, such website, beginning with the first year ments. Subsequently, local incorpora- as equipment, but on revolving movable the indicator or economy was included tion lawyers and government officials collateral, such as accounts receivable in the report. To provide a comparable complete and verify the data. and inventory. Third, the indicator no time series for research, the data set is Information is also collected on the longer considers whether management back-calculated to adjust for changes sequence in which procedures are to remains in place during a reorganiza- in methodology and any revisions in be completed and whether procedures tion procedure, better accommodating data due to corrections. The website also may be carried out simultaneously. It is economies that adopt reorganization makes available all original data sets assumed that any required information procedures similar to Chapter 11 reorga- used for background papers. The correc- is readily available and that all agencies nization or redressement procedures in tion rate between Doing Business 2008 involved in the start-up process function civil law systems. and Doing Business 2009 was 6%. without corruption. If answers by local experts differ, inquiries continue until economy characteristics the data are reconciled. To make the data comparable across gross nationaL inCome (gni) and the U.S. State Department 2008 economies, several assumptions about the per Capita country profiles were used. business and the procedures are used. Doing Business 2009 reports 2007 income per capita as published in region and inCome group assumptions about the business the World Bank's World Develop- Doing Business uses the World Bank The business: ment Indicators 2008. Income is regional and income group clas- · Is a limited liability company. If there calculated using the Atlas method sifications, available at http://www is more than one type of limited (current US$). For cost indicators .worldbank.org/data/countryclass. liability company in the economy, the expressed as a percentage of income Throughout the report the term rich limited liability form most popular per capita, 2007 GNI in local cur- economies refers to the high-income among domestic firms is chosen. rency units is used as the denomina- group, middle-income economies to Information on the most popular tor. GNI data were not available from the upper-middle-income group and form is obtained from incorporation the World Bank for The Bahamas, poor economies to the lower-middle- lawyers or the statistical office. Bahrain, Puerto Rico, Qatar and the income and low-income groups. · Operates in the economy's largest United Arab Emirates. In these cases business city. GDP or GNP per capita data and popuLation · Is 100% domestically owned and has growth rates from the International Doing Business 2009 reports midyear 5 owners, none of whom is a legal Monetary Fund's World Economic 2007 population statistics as published entity. Outlook database, the Economist In- in World Development Indicators · Has start-up capital of 10 times telligence Unit 2008 country profiles 2008. income per capita at the end of 2007, paid in cash. DATA noTes 63 Table 12.2 procedures are excluded. For example, What does starting a business measure? procedures to comply with environmen- Procedures to legally start and operate a company (number) tal regulations are included only when · Preregistration (for example, name verification or reservation, notarization) they apply to all businesses conducting · Registration in the economy's largest business city general commercial or industrial activi- · Postregistration (for example, social security registration, company seal) ties. Procedures that the company un- Time required to complete each procedure (calendar days) dergoes to connect to electricity, water, · Does not include time spent gathering information gas and waste disposal services are not · Each procedure starts on a separate day included. · Procedure completed once final document is received · No prior contact with officials time Cost required to complete each procedure (% of income per capita) Time is recorded in calendar days. The · Official costs only, no bribes measure captures the median duration · No professional fees unless services required by law that incorporation lawyers indicate is Paid-in minimum capital (% of income per capita) necessary to complete a procedure with · Deposited in a bank or with a notary before registration begins minimum follow-up with government Source: Doing Business database. agencies and no extra payments. It is as- sumed that the minimum time required · Performs general industrial or different sequential procedures, each is for each procedure is 1 day. Although commercial activities, such as the counted separately. The founders are as- procedures may take place simultane- production or sale to the public of sumed to complete all procedures them- ously, they cannot start on the same day products or services. The business selves, without middlemen, facilitators, (that is, simultaneous procedures start does not perform foreign trade accountants or lawyers, unless the use on consecutive days). A procedure is activities and does not handle of such a third party is mandated by considered completed once the company products subject to a special tax law. If the services of professionals are has received the final document, such as regime, for example, liquor or required, procedures conducted by such the company registration certificate or tobacco. It is not using heavily professionals on behalf of the company tax number. If a procedure can be accel- polluting production processes. are counted separately. Each electronic erated for an additional cost, the fastest · Leases the commercial plant and procedure is counted separately. If 2 pro- procedure is chosen. It is assumed that offices and is not a proprietor of real cedures can be completed through the the entrepreneur does not waste time estate. same website but require separate filings, and commits to completing each remain- · Does not qualify for investment they are counted as 2 procedures. ing procedure without delay. The time incentives or any special benefits. Both pre- and postincorporation that the entrepreneur spends on gather- · Has at least 10 and up to 50 procedures that are officially required ing information is ignored. It is assumed employees 1 month after the for an entrepreneur to formally operate a that the entrepreneur is aware of all entry commencement of operations, all of business are recorded. regulations and their sequence from the them nationals. Procedures required for official cor- beginning but has had no prior contact · Has a turnover of at least 100 times respondence or transactions with public with any of the officials. income per capita. agencies are also included. For example, · Has a company deed 10 pages long. if a company seal or stamp is required Cost on official documents, such as tax dec- Cost is recorded as a percentage of the proCedures larations, obtaining the seal or stamp is economy's income per capita. It includes A procedure is defined as any interaction counted. Similarly, if a company must all official fees and fees for legal or pro- of the company founders with external open a bank account before registering fessional services if such services are parties (for example, government agen- for sales tax or value added tax, this required by law. Fees for purchasing and cies, lawyers, auditors or notaries). In- transaction is included as a procedure. legalizing company books are included teractions between company founders or Shortcuts are counted only if they fulfill 4 if these transactions are required by law. company officers and employees are not criteria: they are legal, they are available The company law, the commercial code counted as procedures. Procedures that to the general public, they are used by and specific regulations and fee sched- must be completed in the same build- the majority of companies, and avoiding ules are used as sources for calculating ing but in different offices are counted them causes substantial delays. costs. In the absence of fee schedules, a as separate procedures. If founders have Only procedures required of all government officer's estimate is taken to visit the same office several times for businesses are covered. Industry-specific as an official source. In the absence of a 64 Doing Business 2009 government officer's estimate, estimates Table 12.3 of incorporation lawyers are used. If What does dealing with construction permits measure? several incorporation lawyers provide Procedures to legally build a warehouse (number) different estimates, the median reported · Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates value is applied. In all cases the cost ex- · Completing all required notifications and receiving all necessary inspections cludes bribes. · Obtaining utility connections for electricity, water, sewerage and a land telephone line · Registering the warehouse after its completion (if required for use as collateral or for transfer of warehouse) paid-in minimum CapitaL Time required to complete each procedure (calendar days) The paid-in minimum capital require- · Does not include time spent gathering information ment reflects the amount that the en- · Each procedure starts on a separate day trepreneur needs to deposit in a bank or · Procedure completed once final document is received · No prior contact with officials with a notary before registration and up to 3 months following incorporation and Cost required to complete each procedure (% of income per capita) is recorded as a percentage of the econ- · Official costs only, no bribes omy's income per capita. The amount Source: Doing Business database. is typically specified in the commercial code or the company law. Many econo- required notifications; and receiving all · Has 60 builders and other employees, mies have a minimum capital require- necessary inspections. Doing Business all of them nationals with the ment but allow businesses to pay only a also records procedures for obtaining technical expertise and professional part of it before registration, with the rest connections for electricity, water, sew- experience necessary to obtain to be paid after the first year of operation. erage and a fixed land line. Procedures construction permits and approvals. In Germany in June 2008, the minimum necessary to register the property so that · Has at least 1 employee who is a capital requirement for limited liability it can be used as collateral or transferred licensed architect and registered with companies was 25,000, of which at least to another entity are also counted (table the local association of architects. 12,500 was payable before registration. 12.3). The survey divides the process of · Has paid all taxes and taken out all The paid-in minimum capital recorded building a warehouse into distinct pro- necessary insurance applicable to its for Germany is therefore 12,500, or cedures and calculates the time and cost general business activity (for example, 42.2% of income per capita. In Serbia the of completing each procedure in practice accidental insurance for construction minimum capital requirement was 500, under normal circumstances. workers and third-person liability of which only half needed to be paid be- Information is collected from ex- insurance). fore registration. The paid-in minimum perts in construction licensing, includ- · Owns the land on which the capital recorded for Serbia is therefore ing architects, construction lawyers, con- warehouse is built. 250, or 7% of income per capita. struction firms, utility service providers and public officials who deal with build- assumptions about the The data details on starting a business ing regulations, including approvals and warehouse can be found for each economy at inspections. To make the data comparable The warehouse: http://www.doingbusiness.org. This meth- across economies, several assumptions · Will be used for general storage odology was developed in Djankov and about the business, the warehouse project activities, such as storage of books or others (2002) and is adopted here with and the utility connections are used. stationery. The warehouse will not be minor changes. used for any goods requiring special assumptions about the conditions, such as food, chemicals or dealing with conStruction ConstruCtion Company pharmaceuticals. perMitS The business (BuildCo): · Has 2 stories, both above ground, · Is a limited liability company. with a total surface of approximately Doing Business records all procedures · Operates in the economy's largest 1,300.6 square meters (14,000 square required for a business in the construc- business city. feet). Each floor is 3 meters (9 feet, 10 tion industry to build a standardized · Is 100% domestically and privately inches) high. warehouse. These procedures include owned. · Has road access and is located in submitting all relevant project-specific · Has 5 owners, none of whom is a legal the periurban area of the economy's documents (for example, building plans entity. largest business city (that is, on the and site maps) to the authorities; obtain- · Is fully licensed and insured to carry fringes of the city but still within its ing all necessary clearances, licenses, out construction projects, such as official limits). permits and certificates; completing all building warehouses. DATA noTes 65 · Is not located in a special economic it is assumed that the water demand is assumed that BuildCo does not waste or industrial zone. The zoning specified below also covers the water time and commits to completing each requirements for warehouses are met needed for fire protection. remaining procedure without delay. The by building in an area where similar · Has an average water use of 662 liters time that BuildCo spends on gathering warehouses can be found. (175 gallons) a day and an average information is ignored. It is assumed · Is located on a land plot of 929 square wastewater flow of 568 liters (150 that BuildCo is aware of all building meters (10,000 square feet) that gallons) a day. requirements and their sequence from is 100% owned by BuildCo and is · Has a peak water use of 1,325 liters the beginning. accurately registered in the cadastre (350 gallons) a day and a peak and land registry. wastewater flow of 1,136 liters (300 Cost · Is a new construction (there was no gallons) a day. Cost is recorded as a percentage of the previous construction on the land). · Will have a constant level of water economy's income per capita. Only of- · Has complete architectural and demand and wastewater flow ficial costs are recorded. All the fees technical plans prepared by a licensed throughout the year. associated with completing the proce- architect. dures to legally build a warehouse are · Will include all technical equipment The telephone connection: recorded, including those associated required to make the warehouse fully · Is 10 meters (32 feet, 10 inches) from with obtaining land use approvals and operational. the main telephone network. preconstruction design clearances; re- · Will take 30 weeks to construct · Is a fixed land line. ceiving inspections before, during and (excluding all delays due to after construction; getting utility con- administrative and regulatory proCedures nections; and registering the warehouse requirements). A procedure is any interaction of the property. Nonrecurring taxes required company's employees or managers with for the completion of the warehouse assumptions about the utiLity external parties, including government project also are recorded. The building ConneCtions agencies, notaries, the land registry, the code, information from local experts and The electricity connection: cadastre, utility companies, public and specific regulations and fee schedules are · Is 10 meters (32 feet, 10 inches) from private inspectors and technical experts used as sources for costs. If several local the main electricity network. apart from in-house architects and en- partners provide different estimates, the · Is a medium-tension, 3-phase, 4-wire gineers. Interactions between company median reported value is used. Y, 140-kVA connection. Three-phase employees, such as development of the service is available in the construction warehouse plans and inspections con- The data details on dealing with con- area. ducted by employees, are not counted struction permits can be found for each · Will be delivered by an overhead as procedures. Procedures that the com- economy at http://www.doing service, unless overhead service is not pany undergoes to connect to electricity, business.org. available in the periurban area. water, sewerage and telephone services · Consists of a simple hookup unless are included. All procedures that are eMploying workerS installation of a private substation legally or in practice required for build- (transformer) or extension of network ing a warehouse are counted, even if they Doing Business measures the regulation is required. may be avoided in exceptional cases. of employment, specifically as it affects · Requires the installation of only one the hiring and firing of workers and the electricity meter. time rigidity of working hours. BuildCo is assumed to have a licensed Time is recorded in calendar days. The In 2007 improvements were made to electrician on its team to complete the measure captures the median duration align the methodology for the employing internal wiring for the warehouse. that local experts indicate is necessary to workers indicators with the International complete a procedure in practice. It is as- Labour Organization (ILO) conventions. The water and sewerage connection: sumed that the minimum time required Only 4 of the 188 ILO conventions cover · Is10meters(32feet,10inches)from for each procedure is 1 day. Although areas measured by Doing Business: the existing water source and sewer tap. procedures may take place simultane- employee termination, weekend work, · Does not require water for ously, they cannot start on the same day holiday with pay and night work. The fire protection reasons; a fire (that is, simultaneous procedures start methodology was adapted to ensure full extinguishing system (dry system) on consecutive days). If a procedure can consistency with these 4 conventions. It will be used instead. If a wet fire be accelerated legally for an additional is possible for an economy to receive the protection system is required by law, cost, the fastest procedure is chosen. It highest score on the ease of employing 66 Doing Business 2009 workers and comply with all relevant ILO · Is subject to collective bargaining fixed-term contracts is less than 3 years; conventions (specifically, the 4 related to agreements in economies where such 0.5 if it is 3 years or more but less than 5 Doing Business)--and no economy can agreements cover more than half the years; and 0 if fixed-term contracts can achieve a better score by failing to com- manufacturing sector and apply even last 5 years or more. Finally, a score of 1 ply with these conventions. to firms not party to them. is assigned if the ratio of the minimum The ILO conventions covering areas · Abides by every law and regulation wage to the average value added per related to the employing workers indica- but does not grant workers more worker is 0.75 or more; 0.67 for a ratio of tors do not include the ILO core labor benefits than mandated by law, 0.50 or more but less than 0.75; 0.33 for standards--8 conventions covering the regulation or (if applicable) collective a ratio of 0.25 or more but less than 0.50; right to collective bargaining, the elimi- bargaining agreement. and 0 for a ratio of less than 0.25. In the nation of forced labor, the abolition of Central African Republic, for example, child labor and equitable treatment in rigidity of empLoyment index fixed-term contracts are prohibited for employment practices. Doing Business The rigidity of employment index is the permanent tasks (a score of 1), and they supports the ILO core labor standards average of 3 subindices: a difficulty of can be used for a maximum of 4 years (a and this year includes information on hiring index, a rigidity of hours index score of 0.5). The ratio of the mandated their ratification. Doing Business does and a difficulty of firing index (table minimum wage to the value added per not measure or rank ratification or com- 12.4). All the subindices have several worker is 0.62 (a score of 0.67). Averag- pliance with ILO conventions. components. And all take values between ing the 3 values and scaling the index to The data on employing workers are 0 and 100, with higher values indicating 100 gives the Central African Republic a based on a detailed survey of employment more rigid regulation. score of 72. regulations that is completed by local The difficulty of hiring index mea- The rigidity of hours index has 5 lawyers and public officials. Employment sures (i) whether fixed-term contracts components: (i) whether night work is laws and regulations as well as second- are prohibited for permanent tasks; (ii) unrestricted; (ii) whether weekend work ary sources are reviewed to ensure accu- the maximum cumulative duration of is unrestricted; (iii) whether the work- racy. To make the data comparable across fixed-term contracts; and (iii) the ratio week can consist of 5.5 days; (iv) whether economies, several assumptions about the of the minimum wage for a trainee the workweek can extend to 50 hours or worker and the business are used. or first-time employee to the average more (including overtime) for 2 months value added per worker.4 An economy a year to respond to a seasonal increase assumptions about the worker is assigned a score of 1 if fixed-term in production; and (v) whether paid The worker: contracts are prohibited for permanent annual vacation is 21 working days or · Is a 42-year-old, nonexecutive, full- tasks and a score of 0 if they can be used fewer. For each of these questions, if the time, male employee. for any task. A score of 1 is assigned if answer is no, the economy is assigned a · Has worked at the same company for the maximum cumulative duration of score of 1; otherwise a score of 0 is as- 20 years. · Earns a salary plus benefits equal to Table 12.4 What does employing workers measure? the economy's average wage during the entire period of his employment. Difficulty of hiring index (0­100) · Is a lawful citizen who belongs to the · Applicability and maximum duration of fixed-term contracts same race and religion as the majority · Minimum wage for trainee or first-time employee of the economy's population. Rigidity of hours index (0­100) · Resides in the economy's largest · Restrictions on night work and weekend work business city. · Allowed maximum length of the workweek in days and hours, including overtime · Is not a member of a labor union, · Paid annual vacation days unless membership is mandatory. Difficulty of firing index (0­100) · Notification and approval requirements for termination of a redundant worker or group of redundant assumptions about the business workers The business: · Obligation to reassign or retrain and priority rules for redundancy and reemployment · Is a limited liability company. Rigidity of employment index (0­100) · Operates in the economy's largest · Simple average of the difficulty of hiring, rigidity of hours and difficulty of firing indices business city. Firing cost (weeks of salary) · Is 100% domestically owned. · Notice requirements, severance payments and penalties due when terminating a redundant worker, ex- · Operates in the manufacturing sector. pressed in weeks of salary · Has 201 employees. Source: Doing Business database. DATA noTes 67 signed. For example, the Czech Republic rules for termination (a score of 1) and Every procedure required by law imposes restrictions on night work (a reemployment (a score of 1). Adding the or necessary in practice is included, score of 1) and weekend work (a score scores and scaling to 100 gives a final whether it is the responsibility of the of 1), allows 6-day workweeks (a score index of 80. seller or the buyer or must be completed of 0), permits 50-hour workweeks for 2 by a third party on their behalf. Local months (a score of 0) and requires paid firing Cost property lawyers, notaries and property vacation of 20 working days (a score of The firing cost indicator measures the registries provide information on pro- 0). Averaging the scores and scaling the cost of advance notice requirements, cedures as well as the time and cost to result to 100 gives a final index of 40 for severance payments and penalties due complete each of them. the Czech Republic. when terminating a redundant worker, To make the data comparable across The difficulty of firing index has expressed in weeks of salary. If the firing economies, several assumptions about 8 components: (i) whether redundancy cost adds up to 8 or fewer weeks of salary, the parties to the transaction, the prop- is disallowed as a basis for terminating a score of 0 is assigned for the purposes erty and the procedures are used. workers; (ii) whether the employer needs of calculating the aggregate ease of doing to notify a third party (such as a gov- business ranking. If the cost adds up to assumptions about the parties ernment agency) to terminate 1 redun- more than 8 weeks of salary, the score is The parties (buyer and seller): dant worker; (iii) whether the employer the number of weeks. One month is re- · Are limited liability companies. needs to notify a third party to terminate corded as 4 and 1/3 weeks. In Mauritius, · Are located in the periurban area of a group of 25 redundant workers; (iv) for example, an employer is required to the economy's largest business city. whether the employer needs approval give 3 months' notice before a redun- · Are 100% domestically and privately from a third party to terminate 1 redun- dancy termination, and the severance owned. dant worker; (v) whether the employer pay for a worker with 20 years of service · Have 50 employees each, all of whom needs approval from a third party to equals 5 months of wages. No penalty are nationals. terminate a group of 25 redundant work- is levied. Altogether, the employer pays · Perform general commercial ers; (vi) whether the law requires the the equivalent of 35 weeks of salary to activities. employer to reassign or retrain a worker dismiss the worker. before making the worker redundant; assumptions about the property (vii) whether priority rules apply for The data details on employing workers The property: redundancies; and (viii) whether priority can be found for each economy at http:// · Has a value of 50 times income per rules apply for reemployment. For the www.doingbusiness.org. This methodol- capita. The sale price equals the value. first question an answer of yes for work- ogy was developed in Botero and others · Is fully owned by the seller. ers of any income level gives a score of (2004) and is adopted here with minor · Has no mortgages attached and has 10 and means that the rest of the ques- changes. been under the same ownership for tions do not apply. An answer of yes to the past 10 years. question (iv) gives a score of 2. For every regiStering property · Is registered in the land registry or other question, if the answer is yes, a cadastre, or both, and is free of title score of 1 is assigned; otherwise a score Doing Business records the full sequence disputes. of 0 is given. Questions (i) and (iv), as the of procedures necessary for a business · Is located in a periurban commercial most restrictive regulations, have greater (buyer) to purchase a property from an- zone, and no rezoning is required. weight in the construction of the index. other business (seller) and to transfer the · Consists of land and a building. The In Tunisia, for example, redundancy property title to the buyer's name so that land area is 557.4 square meters is allowed as grounds for termination the buyer can use the property for ex- (6,000 square feet). A 2-story (a score of 0). An employer has to both panding its business, use the property as warehouse of 929 square meters notify a third party (a score of 1) and collateral in taking new loans or, if nec- (10,000 square feet) is located on the obtain its approval (a score of 2) to ter- essary, sell the property to another busi- land. The warehouse is 10 years old, is minate a single redundant worker, and ness (table 12.5). The process starts with in good condition and complies with has to both notify a third party (a score obtaining the necessary documents, such all safety standards, building codes of 1) and obtain its approval (a score of as a copy of the seller's title if necessary, and other legal requirements. The 1) to terminate a group of 25 redundant and conducting due diligence if required. property of land and building will be workers. The law mandates retraining or The transaction is considered complete transferred in its entirety. alternative placement before termina- when the buyer can use the property as · Will not be subject to renovations tion (a score of 1). There are priority collateral for a bank loan. or additional building following the purchase. 68 Doing Business 2009 · Has no trees, natural water sources, Table 12.5 natural reserves or historical What does registering property measure? monuments of any kind. Procedures to legally transfer title on immovable property (number) · Will not be used for special purposes, · Preregistration (for example, checking for liens, notarizing sales agreement, paying property transfer taxes) and no special permits, such as for · Registration in the economy's largest business city residential use, industrial plants, · Postregistration (for example, filing title with municipality) waste storage or certain types of Time required to complete each procedure (calendar days) agricultural activities, are required. · Does not include time spent gathering information · Has no occupants (legal or illegal), · Each procedure starts on a separate day and no other party holds a legal · Procedure completed once final document is received interest in it. · No prior contact with officials Cost required to complete each procedure (% of property value) proCedures · Official costs only, no bribes A procedure is defined as any interaction · No value added or capital gains taxes included of the buyer or the seller or their agents Source: Doing Business database. (if an agent is legally or in practice re- quired) with external parties, including involved are aware of all regulations and The data on the legal rights of bor- government agencies, inspectors, nota- their sequence from the beginning. Time rowers and lenders are gathered through ries and lawyers. Interactions between spent on gathering information is not a survey of financial lawyers and verified company officers and employees are not considered. through analysis of laws and regulations considered. All procedures that are le- as well as public sources of information gally or in practice required for register- Cost on collateral and bankruptcy laws. The ing property are recorded, even if they Cost is recorded as a percentage of the data on credit information sharing are may be avoided in exceptional cases. It is property value, assumed to be equiva- built in 2 stages. First, banking super- assumed that the buyer follows the fast- lent to 50 times income per capita. Only vision authorities and public informa- est legal option available and used by the official costs required by law are re- tion sources are surveyed to confirm the majority of property owners. Although corded, including fees, transfer taxes, presence of public credit registries and the buyer may use lawyers or other pro- stamp duties and any other payment to private credit information bureaus. Sec- fessionals where necessary in the regis- the property registry, notaries, public ond, when applicable, a detailed survey tration process, it is assumed that it does agencies or lawyers. Other taxes, such as on the public or private credit registry's not employ an outside facilitator in the capital gains tax or value added tax, are structure, law and associated rules is registration process unless legally or in excluded from the cost measure. Both administered to the credit registry. Sur- practice required to do so. costs borne by the buyer and those borne vey responses are verified through sev- by the seller are included. If cost esti- eral rounds of follow-up communication time mates differ among sources, the median with respondents as well as by contact- Time is recorded in calendar days. The reported value is used. ing third parties and consulting public measure captures the median duration sources. The survey data are confirmed that property lawyers, notaries or reg- The data details on registering property through teleconference calls or on-site istry officials indicate is necessary to can be found for each economy at http:// visits in all economies. complete a procedure. It is assumed that www.doingbusiness.org. the minimum time required for each strength of LegaL rights index procedure is 1 day. Although procedures getting credit The strength of legal rights index mea- may take place simultaneously, they can- sures the degree to which collateral and not start on the same day. It is assumed Doing Business constructs measures of bankruptcy laws protect the rights of that the buyer does not waste time and the legal rights of borrowers and lenders borrowers and lenders and thus facilitate commits to completing each remaining and the sharing of credit information. lending. Two case scenarios are used procedure without delay. If a procedure The first set of indicators describes how to determine the scope of the secured can be accelerated for an additional cost, well collateral and bankruptcy laws fa- transactions system, involving a secured the fastest legal procedure available and cilitate lending. The second set measures borrower, the company ABC, and a se- used by the majority of property owners the coverage, scope, quality and acces- cured lender, BizBank. is chosen. If procedures can be under- sibility of credit information available Several assumptions about the se- taken simultaneously, it is assumed that through public and private credit regis- cured borrower and lender are used: they are. It is assumed that the parties tries (table 12.6). DATA noTes 69 · ABC is a domestic, limited liability · Any business may use movable assets · Secured creditors are paid first (for company. as collateral while keeping possession example, before general tax claims · ABC has its headquarters and only of the assets, and any financial and employee claims) when a base of operations in the economy's institution may accept such assets as business is liquidated. largest business city. collateral. · Secured creditors are not subject to · To fund its business expansion plans, · The law allows a business to grant an automatic stay or moratorium ABC obtains a loan from BizBank for a nonpossessory security right in a on enforcement procedures when an amount up to 10 times income per single category of revolving movable a debtor enters a court-supervised capita in local currency. assets (such as accounts receivable reorganization procedure. · Both ABC and BizBank are 100% or inventory), without requiring a · The law allows parties to agree in a domestically owned. specific description of the secured collateral agreement that the lender The case scenarios also involve as- assets. may enforce its security right out of sumptions. In case A, as collateral for the · The law allows a business to grant court. loan, ABC grants BizBank a nonposses- a nonpossessory security right in The index ranges from 0 to 10, with sory security interest in one category of substantially all of its assets, without higher scores indicating that collateral revolving movable assets, for example, requiring a specific description of the and bankruptcy laws are better designed its accounts receivable or its inventory. secured assets. to expand access to credit. ABC wants to keep both possession and · A security right may extend to future ownership of the collateral. In economies or after-acquired assets and may depth of Credit information in which the law does not allow non- extend automatically to the products, index possessory security interests in movable proceeds or replacements of the The depth of credit information index property, ABC and BizBank use a fidu- original assets. measures rules affecting the scope, ac- ciary transfer-of-title arrangement (or · General description of debts and cessibility and quality of credit informa- a similar substitute for nonpossessory obligations is permitted in collateral tion available through either public or security interests). agreements and in registration private credit registries. A score of 1 is In case B, ABC grants BizBank a documents, so that all types of assigned for each of the following 6 fea- business charge, enterprise charge, float- obligations and debts can be secured tures of the public registry or the private ing charge or any charge or combination by stating a maximum rather than credit bureau (or both): of charges that gives BizBank a security a specific amount between the parties. · Both positive credit information interest over ABC's combined assets (or · A collateral registry is in operation (for example, loan amounts and as much of ABC's assets as possible). that is unified geographically and pattern of on-time repayments) and ABC keeps ownership and possession of by asset type and that is indexed by negative information (for example, the assets. the name of the grantor of a security late payments, number and amount The strength of legal rights index in- right. of defaults and bankruptcies) are cludes 8 aspects related to legal rights in · Secured creditors are paid first (for distributed. collateral law and 2 aspects in bankruptcy example, before general tax claims · Data on both firms and individuals law. A score of 1 is assigned for each of the and employee claims) when a debtor are distributed. following features of the laws: defaults outside an insolvency · Data from retailers, trade creditors or procedure. utility companies as well as financial Table 12.6 institutions are distributed. What does getting credit measure? · More than 2 years of historical data are Strength of legal rights index (0­10) distributed. Registries that erase data · Protection of rights of borrowers and lenders through collateral and bankruptcy laws on defaults as soon as they are repaid · Security interest is a nonpossessory one in movable assets obtain a score of 0 for this indicator. Depth of credit information index (0­6) · Data on loans below 1% of income per capita are distributed. A registry · Scope and accessibility of credit information distributed by public and private credit registries · Quality of data distributed by public and private credit registries must have a minimum coverage of 1% of the adult population to score a 1 Public credit registry coverage (% of adults) for this indicator. · Number of individuals and firms listed in a public credit registry as percentage of adult population · Regulations guarantee borrowers the Private credit bureau coverage (% of adults) right to access their data in the largest · Number of individuals and firms listed in a private credit bureau as percentage of adult population registry in the economy. Source: Doing Business database. 70 Doing Business 2009 The index ranges from 0 to 6, with private Credit bureau Coverage assumptions about the business higher values indicating the availability The private credit bureau coverage indi- The business (buyer): of more credit information, from either cator reports the number of individuals · Is a publicly traded corporation listed a public registry or a private bureau, to and firms listed by a private credit bureau on the economy's most important facilitate lending decisions. If the registry with information on repayment history, stock exchange. If the number of is not operational or has coverage of less unpaid debts or credit outstanding from publicly traded companies listed than 0.1% of the adult population, the the past 5 years. The number is expressed on that exchange is less than 10, or score on the depth of credit information as a percentage of the adult population if there is no stock exchange in the index is 0. (the population aged 15 and above ac- economy, it is assumed that buyer is a In Turkey, for example, both a pub- cording to the World Bank's World De- large private company with multiple lic and a private registry operate. Both velopment Indicators 2008). A private shareholders. distribute positive and negative informa- credit bureau is defined as a private firm · Has a board of directors and a tion (a score of 1). The private bureau or nonprofit organization that maintains chief executive officer (CEO) who distributes data only on individuals, but a database on the creditworthiness of may legally act on behalf of buyer the public registry covers firms as well borrowers (persons or businesses) in where permitted, even if this is not as individuals (a score of 1). The public the financial system and facilitates the specifically required by law. and private registries share data among exchange of credit information among · Is a food manufacturer. financial institutions only; no data are banks and financial institutions. Credit · Has its own distribution network. collected from retailers or utilities (a investigative bureaus and credit report- score of 0). The private bureau distrib- ing firms that do not directly facilitate assumptions about the utes more than 2 years of historical data information exchange among banks and transaCtion (a score of 1). The public registry collects other financial institutions are not con- · Mr. James is buyer's controlling data on loans of $3,493 (44% of income sidered. If no private bureau operates, shareholder and a member of buyer's per capita) or more, but the private bu- the coverage value is 0. board of directors. He owns 60% reau collects information on loans of of buyer and elected 2 directors to any value (a score of 1). Borrowers have The data details on getting credit can be buyer's 5-member board. the right to access their data in both the found for each economy at http://www · Mr. James also owns 90% of seller, private and the public registry (a score of .doingbusiness.org. This methodology a company that operates a chain of 1). Summing across the indicators gives was developed in Djankov, McLiesh and retail hardware stores. Seller recently Turkey a total score of 5. Shleifer (2007) and is adopted here with closed a large number of its stores. minor changes. · Mr. James proposes to buyer that pubLiC Credit registry Coverage it purchase seller's unused fleet of The public credit registry coverage in- protecting inveStorS trucks to expand buyer's distribution dicator reports the number of individu- of its food products. Buyer agrees. als and firms listed in a public credit Doing Business measures the strength of The price is equal to 10% of buyer's registry with information on repayment minority shareholder protections against assets and is higher than the market history, unpaid debts or credit outstand- directors' misuse of corporate assets for value. ing from the past 5 years. The number personal gain. The indicators distinguish · The proposed transaction is part is expressed as a percentage of the adult 3 dimensions of investor protection: of the company's ordinary course population (the population aged 15 and transparency of related-party transac- of business and is not outside the above according to the World Bank's tions (extent of disclosure index), li- authority of the company. World Development Indicators 2008). ability for self-dealing (extent of director · Buyer enters into the transaction. All A public credit registry is defined as a liability index) and shareholders' ability required approvals are obtained, and database managed by the public sec- to sue officers and directors for miscon- all required disclosures made (that is, tor, usually by the central bank or the duct (ease of shareholder suits index) the transaction is not fraudulent). superintendent of banks, that collects (table 12.7). The data come from a survey · The transaction is unfair to buyer. information on the creditworthiness of of corporate lawyers and are based on Shareholders sue Mr. James and borrowers (persons or businesses) in the securities regulations, company laws and the other parties that approved the financial system and makes it available court rules of evidence. transaction. to financial institutions. If no public reg- To make the data comparable across istry operates, the coverage value is 0. economies, several assumptions about the business and the transaction are used. DATA noTes 71 Table 12.7 extent of direCtor LiabiLity What does protecting investors measure? index Extent of disclosure index (0­10) The extent of director liability index has · Who can approve related-party transactions 7 components: · Disclosure requirements in case of related-party transactions · Whether a shareholder plaintiff is Extent of director liability index (0­10) able to hold Mr. James liable for · Ability of the shareholders to hold the interested party and the approving body liable in case of related- damage the buyer-seller transaction party transactions causes to the company. A score of 0 is · Available legal remedies (damages, repayment of profits, fines and imprisonment) assigned if Mr. James cannot be held · Ability of shareholders to sue directly or derivatively liable or can be held liable only for Ease of shareholder suits index (0­10) fraud or bad faith; 1 if Mr. James can · Documents and information available during trial be held liable only if he influenced · Direct access to internal documents of the company and use of a government inspector without filing a the approval of the transaction or suit in court was negligent; 2 if Mr. James can Strength of investor protection index (0­10) be held liable when the transaction · Simple average of the extent of disclosure, extent of director liability and ease of shareholder suits indices is unfair or prejudicial to the other Source: Doing Business database. shareholders. · Whether a shareholder plaintiff is extent of disCLosure index · Whether disclosure by Mr. James to able to hold the approving body (the The extent of disclosure index has 5 the board of directors is required. A CEO or board of directors) liable for components: score of 0 is assigned if no disclosure damage the transaction causes to the · What corporate body can provide is required; 1 if a general disclosure of company. A score of 0 is assigned if legally sufficient approval for the the existence of a conflict of interest the approving body cannot be held transaction. A score of 0 is assigned if is required without any specifics; 2 liable or can be held liable only for it is the CEO or the managing director if full disclosure of all material facts fraud or bad faith; 1 if the approving alone; 1 if the board of directors relating to Mr. James's interest in the body can be held liable for negligence; or shareholders must vote and Mr. buyer-seller transaction is required. 2 if the approving body can be James is permitted to vote; 2 if the · Whether it is required that an held liable when the transaction is board of directors must vote and Mr. external body, for example, an unfair or prejudicial to the other James is not permitted to vote; 3 if external auditor, review the shareholders. shareholders must vote and Mr. James transaction before it takes place. A · Whether a court can void the is not permitted to vote. score of 0 is assigned if no; 1 if yes. transaction upon a successful claim · Whether immediate disclosure of The index ranges from 0 to 10, with by a shareholder plaintiff. A score of 0 the transaction to the public, the higher values indicating greater disclo- is assigned if rescission is unavailable regulator or the shareholders is sure. In Poland, for example, the board or is available only in case of fraud or required. A score of 0 is assigned if no of directors must approve the transaction bad faith; 1 if rescission is available disclosure is required; 1 if disclosure and Mr. James is not allowed to vote (a when the transaction is oppressive or on the terms of the transaction but score of 2). Buyer is required to disclose prejudicial to the other shareholders; not Mr. James's conflict of interest immediately all information affecting the 2 if rescission is available when the is required; 2 if disclosure on both stock price, including the conflict of in- transaction is unfair or entails a the terms and Mr. James's conflict of terest (a score of 2). In its annual report conflict of interest. interest is required. buyer must also disclose the terms of the · Whether Mr. James pays damages · Whether disclosure in the annual transaction and Mr. James's ownership in for the harm caused to the company report is required. A score of 0 is buyer and seller (a score of 2). Before the upon a successful claim by the assigned if no disclosure on the transaction Mr. James must disclose his shareholder plaintiff. A score of 0 is transaction is required; 1 if disclosure conflict of interest to the other directors, assigned if no; 1 if yes. on the terms of the transaction but but he is not required to provide specific · Whether Mr. James repays profits not Mr. James's conflict of interest information about it (a score of 1). Poland made from the transaction upon a is required; 2 if disclosure on both does not require an external body to re- successful claim by the shareholder the terms and Mr. James's conflict of view the transaction (a score of 0). Adding plaintiff. A score of 0 is assigned if no; interest is required. these numbers gives Poland a score of 7 1 if yes. on the extent of disclosure index. 72 Doing Business 2009 · Whether fines and imprisonment can if no; 1 if yes, with prior approval of strength of investor proteCtion be applied against Mr. James. A score the questions by the judge; 2 if yes, index of 0 is assigned if no; 1 if yes. without prior approval. The strength of investor protection index · Whether shareholder plaintiffs are · Whether the plaintiff can obtain is the average of the extent of disclosure able to sue directly or derivatively for categories of relevant documents from index, the extent of director liability damage the transaction causes to the the defendant without identifying index and the ease of shareholder suits company. A score of 0 is assigned if each document specifically. A score of index. The index ranges from 0 to 10, suits are unavailable or are available 0 is assigned if no; 1 if yes. with higher values indicating more in- only for shareholders holding more · Whether shareholders owning 10% or vestor protection. than 10% of the company's share less of the company's share capital can capital; 1 if direct or derivative suits request that a government inspector The data details on protecting investors are available for shareholders holding investigate the buyer-seller transac- can be found for each economy at http:// 10% or less of share capital. tion without filing suit in court. A www.doingbusiness.org. This methodol- The index ranges from 0 to 10, with score of 0 is assigned if no; 1 if yes. ogy was developed in Djankov, La Porta, higher values indicating greater liability · Whether shareholders owning López-de-Silanes and Shleifer (2008). of directors. To hold Mr. James liable in 10% or less of the company's share Panama, for example, a plaintiff must capital have the right to inspect the paying taxeS prove that Mr. James influenced the ap- transaction documents before filing proving body or acted negligently (a score suit. A score of 0 is assigned if no; 1 Doing Business records the taxes and of 1). To hold the other directors liable, if yes. mandatory contributions that a medium- a plaintiff must prove that they acted · Whether the standard of proof for size company must pay in a given year, as negligently (a score of 1). The unfair civil suits is lower than that for a well as measures of the administrative transaction cannot be voided (a score of criminal case. A score of 0 is assigned burden of paying taxes and contribu- 0). If Mr. James is found liable, he must if no; 1 if yes. tions. Taxes and contributions measured pay damages (a score of 1) but he is not The index ranges from 0 to 10, with include the profit or corporate income required to disgorge his profits (a score higher values indicating greater powers tax, social contributions and labor taxes of 0). Mr. James cannot be fined or im- of shareholders to challenge the transac- paid by the employer, property taxes, prisoned (a score of 0). Direct suits are tion. In Greece, for example, the plaintiff property transfer taxes, dividend tax, available for shareholders holding 10% or can access documents that the defendant capital gains tax, financial transactions less of share capital (a score of 1). Adding intends to rely on for his defense and that tax, waste collection taxes and vehicle these numbers gives Panama a score of 4 directly prove facts in the plaintiff's claim and road taxes. on the extent of director liability index. (a score of 2). The plaintiff can examine Doing Business measures all taxes the defendant and witnesses during trial, and contributions that are government ease of sharehoLder suits index though only with prior approval of the mandated (at any level--federal, state The ease of shareholder suits index has 6 questions by the court (a score of 1). The or local), apply to the standardized busi- components: plaintiff must specifically identify the ness and have an impact in its income · What range of documents is available documents being sought (for example, statements. In doing so, Doing Business to the shareholder plaintiff from the the buyer-seller purchase agreement of goes beyond the traditional definition defendant and witnesses during trial. July 15, 2006) and cannot just request of a tax: as defined for the purposes A score of 1 is assigned for each of categories (for example, all documents of government national accounts, taxes the following types of documents related to the transaction) (a score of include only compulsory, unrequited available: information that the 0). A shareholder holding 5% of buyer's payments to general government (table defendant has indicated he intends to shares can request that a government 12.8). Doing Business departs from this rely on for his defense; information inspector review suspected mismanage- definition because it measures imposed that directly proves specific facts in ment by Mr. James and the CEO without charges that affect business accounts, the plaintiff's claim; any information filing suit in court (a score of 1). Any not government accounts. The main dif- relevant to the subject matter of shareholder can inspect the transaction ferences relate to labor contributions the claim; and any information that documents before deciding whether to and value added tax. The Doing Busi- may lead to the discovery of relevant sue (a score of 1). The standard of proof ness measure includes government- information. for civil suits is the same as that for a mandated contributions paid by the · Whether the plaintiff can directly criminal case (a score of 0). Adding these employer to a requited private pension examine the defendant and witnesses numbers gives Greece a score of 5 on the fund or workers' insurance fund. The in- during trial. A score of 0 is assigned ease of shareholder suits index. dicator includes, for example, Australia's DATA noTes 73 Table 12.8 nationals, and 1 manager is also an What does paying taxes measure? owner. Tax payments for a manufacturing company in 2007 (number per year) · Has a turnover of 1,050 times income · Total number of taxes and contributions paid, including consumption taxes (value added tax, sales tax or per capita. goods and service tax) · Makes a loss in the first year of · Method and frequency of payment operation. Time required to comply with 3 major taxes (hours per year) · Has a gross margin (pretax) of 20% · Hours to prepare, file and pay profit taxes, consumption taxes and labor taxes and contributions (that is, sales are 120% of the cost of · Collecting information to compute tax payable goods sold). · Completing tax return forms, filing with proper agencies · Distributes 50% of its net profits as · Arranging payment or withholding · Preparing separate tax accounting books, if required dividends to the owners at the end of the second year. Total tax rate (% of profit) · Sells one of its plots of land at a profit · Profit or corporate income tax during the second year. · Social contributions and labor taxes paid by the employer · Property and property transfer taxes · Has annual fuel costs for its trucks · Dividend, capital gains and financial transactions taxes equal to twice income per capita. · Waste collection, vehicle, road and other taxes · Is subject to a series of detailed Source: Doing Business database. assumptions on expenses and transactions to further standardize compulsory superannuation guarantee most popular among domestic firms the case. All financial statement and workers' compensation insurance. is chosen. The most popular form is variables are proportional to 2005 It excludes value added taxes from the reported by incorporation lawyers or income per capita. For example, the total tax rate because they do not affect the statistical office. owner who is also a manager spends the accounting profits of the business-- · Started operations on January 1, 2006. 10% of income per capita on traveling that is, they are not reflected in the At that time the company purchased for the company (20% of this owner's income statement. all the assets shown in its balance expenses are purely private, 20% are Doing Business has prepared a case sheet and hired all its workers. for entertaining customers and 60% scenario to measure the taxes and contri- · Operates in the economy's largest for business travel). butions paid by a standardized business business city. and the complexity of an economy's tax · Is 100% domestically owned and has assumptions about the taxes compliance system. This case scenario 5 owners, all of whom are natural and Contributions uses a set of financial statements and as- persons. · All the taxes and contributions paid sumptions about transactions made over · Has a start-up capital of 102 times in the second year of operation the year. Tax experts in each economy income per capita at the end of 2006. (fiscal 2007) are recorded. A tax or compute the taxes and contributions due · Performs general industrial or contribution is considered distinct if in their jurisdiction based on the stan- commercial activities. Specifically, it it has a different name or is collected dardized case facts. Information is also produces ceramic flowerpots and sells by a different agency. Taxes and compiled on the frequency of filing, tax them at retail. It does not participate contributions with the same name audits and other costs of compliance. in foreign trade (no import or export) and agency, but charged at different The project was developed and imple- and does not handle products subject rates depending on the business, mented in cooperation with Pricewater- to a special tax regime, for example, are counted as the same tax or houseCoopers. liquor or tobacco. contribution. To make the data comparable across · At the beginning of 2007, owns 2 · The number of times the company economies, several assumptions about plots of land, 1 building, machinery, pays taxes and contributions in a the business and the taxes and contribu- office equipment, computers and 1 year is the number of different taxes tions are used. truck and leases 1 truck. or contributions multiplied by the · Does not qualify for investment frequency of payment (or withholding) assumptions about the business incentives or any benefits apart from for each one. The frequency of The business: those related to the age or size of the payment includes advance payments · Is a limited liability, taxable company. company. (or withholding) as well as regular If there is more than one type of · Has 60 employees--4 managers, 8 payments (or withholding). limited liability company in the assistants and 48 workers. All are economy, the limited liability form 74 Doing Business 2009 tax payments time as value added tax, sales tax or goods The tax payments indicator reflects the Time is recorded in hours per year. The and service tax) but not borne by the total number of taxes and contributions indicator measures the time taken to company are excluded. The taxes in- paid, the method of payment, the fre- prepare, file and pay 3 major types of cluded can be divided into 5 categories: quency of payment and the number of taxes and contributions: the corporate profit or corporate income tax, social agencies involved for this standardized income tax, value added or sales tax and contributions and labor taxes paid by the case during the second year of operation. labor taxes, including payroll taxes and employer (in respect of which all manda- It includes consumption taxes paid by social contributions. Preparation time tory contributions are included, even if the company, such as sales tax or value includes the time to collect all informa- paid to a private entity such as a requited added tax. These taxes are traditionally tion necessary to compute the tax pay- pension fund), property taxes, turnover collected from the consumer on behalf able. If separate accounting books must taxes and other small taxes (such as mu- of the tax agencies. Although they do be kept for tax purposes--or separate nicipal fees and vehicle and fuel taxes). not affect the income statements of the calculations made--the time associated The total tax rate is designed to pro- company, they add to the administrative with these processes is included. This vide a comprehensive measure of the cost burden of complying with the tax system extra time is included only if the regular of all the taxes a business bears. It differs and so are included in the tax payments accounting work is not enough to fulfill from the statutory tax rate, which merely measure. the tax accounting requirements. Filing provides the factor to be applied to the The number of payments takes into time includes the time to complete all tax base. In computing the total tax rate, account electronic filing. Where full elec- necessary tax return forms and make the actual tax payable is divided by com- tronic filing and payment is allowed and all necessary calculations. Payment time mercial profit. Data for Sweden illustrate it is used by the majority of medium-size considers the hours needed to make the this (table 12.9). businesses, the tax is counted as paid payment online or at the tax authorities. Commercial profit is essentially net once a year even if payments are more Where taxes and contributions are paid profit before all taxes borne. It differs frequent. For taxes paid through third in person, the time includes delays while from the conventional profit before tax, parties, such as tax on interest withheld waiting. reported in financial statements. In com- at source by a financial institution or fuel puting profit before tax, many of the tax paid by the fuel distributor, only one totaL tax rate taxes borne by a firm are deductible. payment is included even if payments The total tax rate measures the amount In computing commercial profit, these are more frequent. These are taxes with- of taxes and mandatory contributions taxes are not deductible. Commercial held or paid at source where no filing is borne by the business in the second year profit therefore presents a clear picture required of the company. of operation, expressed as a share of of the actual profit of a business before Where 2 or more taxes or contribu- commercial profit. Doing Business 2009 any of the taxes it bears in the course of tions are filed for and paid jointly using reports the total tax rate for fiscal 2007. the fiscal year. the same form, each of these joint pay- The total amount of taxes borne is the Commercial profit is computed as ments is counted once. For example, if sum of all the different taxes and con- sales minus cost of goods sold, minus mandatory health insurance contribu- tributions payable after accounting for gross salaries, minus administrative ex- tions and mandatory pension contribu- allowable deductions and exemptions. penses, minus other expenses, minus tions are filed for and paid together, The taxes withheld (such as personal provisions, plus capital gains (from the only one of these contributions would be income tax) or collected by the company property sale) minus interest expense, included in the number of payments. and remitted to the tax authorities (such plus interest income and minus com- Table 12.9 Computing the total tax rate for Sweden Statutory rate Statutory tax base Actual tax payable Commercial profit1 Total tax rate (r) (b) (a) (c) (t) a=rxb t = a/c Type of tax (tax base) SKr SKr SKr Corporate income tax (taxable income) 28% 10,352,253 2,898,631 17,619,223 16.50% Real estate tax (land and buildings) 0.38% 26,103,545 97,888 17,619,223 0.60% Payroll tax (taxable wages) 32.28% 19,880,222 6,417,336 17,619,223 36.40% Fuel tax (fuel price) SKr 3.665 per liter 53,505 liters 196,095 17,619,223 1.10% TOTAL 9,609,950 54.50% 1. Profit before all taxes borne. Source: Doing Business database. DATA noTes 75 mercial depreciation. To compute the Local freight forwarders, shipping Table 12.10 commercial depreciation, a straight-line lines, customs brokers, port officials and What does trading across borders measure? depreciation method is applied, with the banks provide information on required following rates: 0% for the land, 5% for documents and cost as well as the time Documents required to export and import (number) the building, 10% for the machinery, to complete each procedure. To make · Bank documents 33% for the computers, 20% for the of- the data comparable across economies, · Customs clearance documents fice equipment, 20% for the truck and several assumptions about the business · Port and terminal handling documents 10% for business development expenses. and the traded goods are used. · Transport documents Commercial profit amounts to 59.4 times Time required to export and import (days) income per capita. assumptions about the business · Obtaining all the documents This methodology is consistent with The business: · Inland transport the Total Tax Contribution framework · Has 60 employees. · Customs clearance and inspections developed by PricewaterhouseCoopers. · Is located in the economy's largest · Port and terminal handling This framework measures taxes that are business city. · Does not include ocean transport time borne by companies and affect their in- · Is a private, limited liability company. Cost required to export and import come statements, as does Doing Busi- It does not operate in an export (US$ per container) ness. But while PricewaterhouseCoo- processing zone or an industrial · Obtaining all the documents pers bases its calculation on data from estate with special export or import · Inland transport the largest companies in the economy, privileges. · Customs clearance and inspections · Port and terminal handling Doing Business focuses on a standard- · Is domestically owned with no foreign · Official costs only, no bribes or tariffs ized medium-size company. ownership. Source: Doing Business database. · Exports more than 10% of its sales. The data details on paying taxes can be and that do not require renewal per ship- found for each economy at http://www assumptions about the traded ment (for example, an annual tax clear- .doingbusiness.org. This methodology was goods ance certificate) are not included. developed in Djankov, Ganser, McLiesh, The traded product travels in a dry- Ramalho and Shleifer (2008). cargo, 20-foot, full container load. It time weighs 10 tons and is valued at $20,000. The time for exporting and importing trading acroSS borderS The product: is recorded in calendar days. The time · Is not hazardous nor does it include calculation for a procedure starts from the Doing Business compiles procedural re- military items. moment it is initiated and runs until it is quirements for exporting and importing · Does not require refrigeration or any completed. If a procedure can be acceler- a standardized cargo of goods by ocean other special environment. ated for an additional cost and is available transport (table 12.10). Every official · Does not require any special to all trading companies, the fastest legal procedure for exporting and importing phytosanitary or environmental procedure is chosen. Fast-track proce- the goods is recorded--from the con- safety standards other than accepted dures applying to firms located in an ex- tractual agreement between the 2 parties international standards. port processing zone are not taken into ac- to the delivery of goods--along with the count because they are not available to all time and cost necessary for completion. doCuments trading companies. Ocean transport time All documents needed by the trader All documents required per shipment is not included. It is assumed that neither for clearance of the goods across the to export and import the goods are re- the exporter nor the importer wastes time border are also recorded. For exporting corded. It is assumed that the contract and that each commits to completing goods, procedures range from packing has already been agreed upon and signed each remaining procedure without delay. the goods at the factory to their depar- by both parties. Documents required for Procedures that can be completed in par- ture from the port of exit. For importing clearance by government ministries, cus- allel are measured as simultaneous. The goods, procedures range from the vessel's toms authorities, port and container ter- waiting time between procedures--for arrival at the port of entry to the cargo's minal authorities, health and technical example, during unloading of the cargo-- delivery at the factory warehouse. The control agencies and banks are taken into is included in the measure. time and cost for ocean transport are not account. Since payment is by letter of included. Payment is made by letter of credit, all documents required by banks credit, and the time, cost and documents for the issuance or securing of a letter of required for the issuance of a letter of credit are also taken into account. Docu- credit are taken into account. ments that are renewed at least annually 76 Doing Business 2009 Cost · Seller sues Buyer to recover the record procedures that exist in civil law Cost measures the fees levied on a 20-foot amount under the sales agreement but not common law jurisdictions, and container in U.S. dollars. All the fees asso- (that is, 200% of the economy's vice versa. For example, in civil law ciated with completing the procedures to income per capita). Buyer opposes countries the judge can appoint an in- export or import the goods are included. Seller's claim, saying that the quality dependent expert, while in common law These include costs for documents, ad- of the goods is not adequate. The countries each party submits a list of ministrative fees for customs clearance claim is disputed on the merits. expert witnesses to the court. To indicate and technical control, terminal handling · A court in the economy's largest the overall efficiency of court procedures, charges and inland transport. The cost business city with jurisdiction over 1 procedure is now subtracted for econo- measure does not include customs tariffs commercial cases worth 200% of mies that have specialized commercial and duties or costs related to ocean trans- income per capita decides the dispute. courts and 1 procedure for economies port. Only official costs are recorded. · Seller attaches Buyer's goods prior that allow electronic filing of court cases. to obtaining a judgment because Procedural steps that take place simul- The data details on trading across borders Seller fears that Buyer may become taneously with or are included in other can be found for each economy at http:// insolvent during the lawsuit. procedural steps are not counted in the www.doingbusiness.org. This methodol- · Expert opinions are given on the total number of procedures. ogy was developed in Djankov, Freund quality of the delivered goods. If it and Pham (forthcoming) and is adopted is standard practice in the economy time here with minor changes. for parties to call witnesses or expert Time is recorded in calendar days, witnesses to give an opinion on the counted from the moment Seller files enforcing contractS quality of the goods, the parties each the lawsuit in court until payment. This call one witness or expert witness. If includes both the days when actions take Indicators on enforcing contracts mea- it is standard practice for the judge place and the waiting periods between. sure the efficiency of the judicial system to appoint an independent expert to The average duration of different stages in resolving a commercial dispute (table give an expert opinion on the quality of dispute resolution is recorded: the 12.11). The data are built by following of the goods, the judge does so. In completion of filing and service of pro- the step-by-step evolution of a commer- this case the judge does not allow cess and of pretrial attachment (time to cial sale dispute before local courts. The opposing expert testimony. file the case), the issuance of judgment data are collected through study of the · The judgment is 100% in favor of (time for the trial and obtaining the codes of civil procedure and other court Seller: the judge decides that the judgment) and the moment of payment regulations as well as surveys completed goods are of adequate quality and (time for enforcement of judgment). by local litigation lawyers (and, in a that Buyer must pay the agreed price quarter of the economies, by judges as (200% of income per capita). Table 12.11 well). The name of the relevant court in · Buyer does not appeal the judgment. What does enforcing contracts measure? each economy--the court in the larg- The judgment becomes final. Procedures to enforce a contract (number) est business city with jurisdiction over · Seller takes all required steps for · Any interaction between the parties in a commercial cases worth 200% of income prompt enforcement of the judgment. commercial dispute, or between them and the per capita--is published at http://www The money is successfully collected judge or court officer .doingbusiness.org. through a public sale of Buyer's · Steps to file the case movable assets (for example, office · Steps for trial and judgment assumptions about the Case equipment). · Steps to enforce the judgment · The value of the claim equals 200% of Time required to complete each procedure the economy's income per capita. proCedures (calendar days) · The dispute concerns a lawful The list of procedural steps compiled · Measured in calendar days transaction between 2 businesses for each economy traces the chronol- · Time to file the case (Seller and Buyer), located in the ogy of a commercial dispute before the · Time for trial and obtaining judgment · Time to enforce the judgment economy's largest business city. relevant court. A procedure is defined Seller sells goods worth 200% of the as any interaction between the parties, Cost required to complete each procedure (% of claim) economy's income per capita to Buyer. or between them and the judge or court · No bribes After Seller delivers the goods to Buyer, officer. This includes steps to file the case, · Average attorney fees Buyer refuses to pay for the goods on steps for trial and judgment and steps · Court costs, including expert fees the grounds that the delivered goods necessary to enforce the judgment. · Enforcement costs were not of adequate quality. The survey allows respondents to Source: Doing Business database. DATA noTes 77 Cost · Has a professional general manager. uidation or debt enforcement procedure, Cost is recorded as a percentage of the · Has had average annual revenue of the economy receives a "no practice" claim, assumed to be equivalent to 200% 1,000 times income per capita over mark. This means that creditors are un- of income per capita. No bribes are re- the past 3 years. likely to recover their debt through the corded. Three types of costs are recorded: · Has 201 employees and 50 suppliers, legal process (in or out of court). court costs, enforcement costs and aver- each of which is owed money for the age attorney fees. Court costs include all last delivery. time costs Seller must advance to the court or · Borrowed from a domestic bank Time for creditors to recover their debt is to the expert regardless of the final cost 5 years ago (the loan has 10 years recorded in calendar years. Information to Seller. Expert fees, if required by law to full repayment) and bought real is collected on the sequence of proce- or necessary in practice, are included estate (the hotel building), using it as dures and on whether any procedures in court costs. Enforcement costs are all security for the bank loan. can be carried out simultaneously. Poten- costs Seller must advance to enforce the · Has observed the payment schedule tial delay tactics by the parties, such as judgment through a public sale of Buyer's and all other conditions of the loan the filing of dilatory appeals or requests movable assets, regardless of the final up to now. for extension, are taken into consider- cost to Seller. Average attorney fees are · Has a floating charge or mortgage, ation. the fees Seller must advance to a local with the value of its principal being attorney to represent Seller in the stan- exactly equal to the market value of Cost dardized case. the hotel. The cost of the proceedings is recorded as a percentage of the estate's value. The The data details on enforcing contracts assumptions about the Case cost is calculated on the basis of survey can be found for each economy at http:// The business is experiencing liquidity responses by insolvency practitioners www.doingbusiness.org. This methodol- problems. The company's loss in 2007 and includes court fees as well as fees ogy was developed in Djankov and others reduced its net worth to a negative figure. of insolvency practitioners, independent (2003) and is adopted here with minor There is no cash to pay the bank interest assessors, lawyers and accountants. Re- changes. or principal in full, due tomorrow. The spondents provide cost estimates from business therefore defaults on its loan. among the following options: a specific cloSing a buSineSS Management believes that losses will be percentage or less than 2%, 2­5%, 5­8%, incurred in 2008 and 2009 as well. 8­11%, 11­18%, 18­25%, 25­33%, Doing Business studies the time, cost The bank holds a floating charge 33­50%, 50­75% and more than 75% of and outcomes of bankruptcy proceed- against the hotel in economies where the value of the business estate. ings involving domestic entities (table floating charges are possible. If the law 12.12). The data are derived from survey does not permit a floating charge but Table 12.12 responses by local insolvency practitio- contracts commonly use some other pro- What does closing a business measure? ners and verified through a study of laws vision to that effect, this provision is Time required to recover debt (years) and regulations as well as public infor- specified in the lending contract. · Measured in calendar years mation on bankruptcy systems. The business has too many credi- · Appeals and requests for extension are included To make the data comparable across tors to negotiate an informal out-of-court Cost required to recover debt (% of estate) economies, several assumptions about workout. It has the following options: a · Measured as percentage of estate value the business and the case are used. judicial procedure aimed at the rehabilita- · Court fees tion or reorganization of the business to · Lawyers'fees assumptions about the business permit its continued operation; a judicial · Independent assessors'fees The business: procedure aimed at the liquidation or · Accountants'fees · Is a limited liability company. winding-up of the company; or a debt en- Recovery rate for creditors (cents on the dollar) · Operates in the economy's largest forcement or foreclosure procedure aimed · Measures the cents on the dollar recovered by business city. at selling the hotel either piecemeal or as creditors · Is 100% domestically owned, with the a going concern, enforced either in court · Present value of debt recovered · Official costs of the insolvency proceedings are founder, who is also the chairman of (or through a government authority like a deducted the supervisory board, owning 51% debt collection agency) or out of court (for · Depreciation of assets is taken into account (no other shareholder holds more example, by appointing a receiver). · Outcome for the business affects the maximum than 5% of shares). If an economy has had fewer than 5 value that can be recovered · Has downtown real estate, where it cases a year over the past 5 years involv- Source: Doing Business database. runs a hotel, as its major asset. ing a judicial reorganization, judicial liq- 78 Doing Business 2009 reCovery rate noteS The recovery rate is recorded as cents on the dollar recouped by creditors through 1. The data for paying taxes refer to the bankruptcy, insolvency or debt en- January­December 2007. forcement proceedings. The calculation 2. These are available at http://www takes into account whether the business .subnational.doingbusiness.org. emerges from the proceedings as a going 3. The average value added per worker is the ratio of an economy's GNI per capita to concern as well as costs and the loss in the working-age population as a percent- value due to the time spent closing down. age of the total population. If the business keeps operating, no value is lost on the initial claim, set at 100 cents on the dollar. If it does not, the initial 100 cents on the dollar are reduced to 70 cents on the dollar. Then the official costs of the insolvency procedure are deducted (1 cent for each percentage of the initial value). Finally, the value lost as a result of the time the money remains tied up in insolvency proceedings is taken into account, including the loss of value due to depreciation of the hotel furniture. Consistent with international accounting practice, the depreciation rate for furni- ture is taken to be 20%. The furniture is assumed to account for a quarter of the total value of assets. The recovery rate is the present value of the remaining pro- ceeds, based on end-2007 lending rates from the International Monetary Fund's International Financial Statistics, sup- plemented with data from central banks. The recovery rate for economies with "no practice" is zero. This methodology was developed in Djankov and others (2006). 79 Ease of doing property rights. The simple average of First, it selects the economies that im- business Iceland's percentile rankings on all top- plemented reforms making it easier to ics is 23%. When all economies are or- do business in 3 or more of the 10 Doing dered by their average percentile rank, Business topics. One reform is counted Iceland is in 11th place. per topic. For example, if an economy Morecomplexaggregationmethods merged several procedures by creating a --such as principal components and unified property registry and separately unobserved components--yield a reduced the property transfer tax, this nearly identical ranking.1 The choice of counts as 1 reform for the purposes of aggregation method has little influence attaining the 3 reforms required to be a on the rankings because the 10 sets of candidate for top reformer. This year 33 indicators in Doing Business provide economies met this criterion: Albania, sufficiently broad coverage across top- Azerbaijan, Belarus, Bosnia and Her- ics. So Doing Business uses the simplest zegovina, Botswana, Bulgaria, Burkina method. Faso, China, Colombia, the Czech Re- The ease of doing business index public, the Dominican Republic, Egypt, The ease of doing business index ranks is limited in scope. It does not ac- Georgia, Greece, the Kyrgyz Republic, economies from 1 to 181. For each count for an economy's proximity to Liberia, the former Yugoslav Republic economy the index is calculated as the large markets, the quality of its infra- of Macedonia, Madagascar, Mauritius, ranking on the simple average of its structure services (other than services Morocco, Mozambique, New Zealand, percentile rankings on each of the 10 related to trading across borders or Portugal, Rwanda, Saudi Arabia, Sen- topics covered in Doing Business 2009. construction permits), the security of egal, Sierra Leone, Slovenia, Thailand, The ranking on each topic is the simple property from theft and looting, macro- Tunisia, Ukraine, Uruguay and Zambia average of the percentile rankings on its economic conditions or the strength of (table 13.2). component indicators (table 13.1). underlying institutions. There remains Second, Doing Business ranks these If an economy has no laws or regu- a large unfinished agenda for research economies on the increase in their lations covering a specific area--for into what regulation constitutes binding ranking on the ease of doing business example, bankruptcy--it receives a "no constraints, what package of reforms is from the previous year. For example, practice" mark. Similarly, an economy most effective and how these issues are Albania, Burkina Faso and Rwanda each receives a "no practice" or "not possible" shaped by the context of an economy. reformed in 4 aspects of business regu- mark if regulation exists but is never The Doing Business indicators provide lation. Albania's aggregate ranking on used in practice or if a competing regu- a new empirical data set that may im- the ease of doing business improved lation prohibits such practice. Either prove understanding of these issues. from 135 to 86, Burkina Faso's from 164 way, a "no practice" or "not possible" Doing Business also uses a simple to 148 and Rwanda's from 148 to 139. mark puts the economy at the bottom of method to calculate the top reformers. These changes represent an improve- the ranking on the relevant indicator. Here is one example of how the Table 13.1 Which indicators make up the ranking? ranking is constructed. In Iceland it takes 5 procedures, 5 days and 2.6% Starting a business Protecting investors of annual income per capita in fees to Procedures, time, cost and paid-in minimum Strength of investor protection index: extent of capital to open a new business disclosure index, extent of director liability index open a business. The minimum capital and ease of shareholder suits index required amounts to 13.6% of income Dealing with construction permits Paying taxes per capita. On these 4 indicators Iceland Procedures, time and cost to obtain construction Number of tax payments, time to prepare and file ranks in the 9th, 3rd, 13th and 58th permits, inspections and utility connections tax returns and to pay taxes, total taxes as a share percentiles. So on average Iceland ranks of profit before all taxes borne in the 21st percentile on the ease of Employing workers Trading across borders starting a business. It ranks in the 48th Difficulty of hiring index, rigidity of hours index, Documents, time and cost to export and import difficulty of firing index, firing cost percentile on protecting investors, 26th percentile on trading across borders, Registering property Enforcing contracts 8th percentile on enforcing contracts, Procedures, time and cost to transfer commercial Procedures, time and cost to resolve a real estate commercial dispute 8th percentile on closing a business and Getting credit Closing a business so on. Higher rankings indicate simpler Strength of legal rights index, depth of credit Recovery rate in bankruptcy regulation and stronger protection of information index 80 Doing Business 2009 ment in the ranking by 49 places, 16 places and 9 places, respectively. Alba- nia therefore ranks ahead of Burkina Faso in the list of top 10 reformers. Rwanda does not make the list. In summary, top reformers are economies that have implemented 3 or more reforms making it easier to do business and, as a result, improved their position in the ease of doing business more than other economies. The change in ranking is calculated by comparing this year's ranking with last year's back- calculated ranking. To ensure consis- tency over time, data sets for previous years are adjusted to reflect any changes in methodology, additions of new econ- omies and revisions in data. note 1. See Djankov and others (2005). eAse of Doing Business 81 Table 13.2 Reforms in 2007/08 Dealing with Trading Starting a construction Employing Registering Getting Protecting Paying across Enforcing Closing a Economy business permits workers property credit investors taxes borders contracts business Afghanistan Albania 4 4 4 4 Algeria Angola 4 4 Antigua and Barbuda 4 Argentina 4 Armenia 4 4 Australia Austria 4 Azerbaijan 4 4 4 4 4 4 4 Bahamas, The Bahrain Bangladesh 4 4 Belarus 4 4 4 4 4 4 Belgium 4 Belize Benin 7 4 Bhutan 4 Bolivia 7 Bosnia and Herzegovina 4 4 4 4 Botswana 4 4 7 4 Brazil 4 Brunei Bulgaria 4 7 4 4 4 Burkina Faso 4 4 4 4 Burundi Cambodia 4 4 Cameroon 4 Canada 4 4 Cape Verde 7 Central African Republic 4 Chad 4 Chile China 7 4 4 4 Colombia 4 4 4 4 4 Comoros Congo, Dem. Rep. Congo, Rep. 4 4 Costa Rica 4 Côte d'Ivoire 4 Croatia 4 4 Czech Republic 4 4 4 4 Denmark 4 Djibouti 4 Dominica Dominican Republic 4 4 4 4 Ecuador 4 Egypt 4 4 4 4 4 4 El Salvador 4 4 4Reformsmakingiteasiertodobusiness7 Reformsmakingitmoredifficulttodobusiness 82 Doing Business 2009 Reforms in 2007/08 Dealing with Trading Starting a construction Employing Registering Getting Protecting Paying across Enforcing Closing a Economy business permits workers property credit investors taxes borders contracts business Equatorial Guinea 4 7 Eritrea 4 Estonia Ethiopia Fiji 7 7 Finland 4 4 France 4 4 Gabon 4 7 Gambia, The 7 Georgia 4 4 4 4 Germany 4 4 Ghana 4 Greece 4 4 4 4 Grenada Guatemala 4 Guinea Guinea-Bissau Guyana Haiti 4 Honduras 4 4 Hong Kong, China 4 4 Hungary 4 4 Iceland India 4 Indonesia 7 4 Iran Iraq Ireland Israel Italy 4 7 4 Jamaica 4 4 Japan Jordan 4 Kazakhstan 7 4 4 Kenya 4 4 Kiribati Korea 7 4 Kuwait Kyrgyz Republic 4 4 4 Lao PDR Latvia 4 4 Lebanon 4 Lesotho 4 Liberia 4 4 4 4 Lithuania 4 Luxembourg Macedonia, former 4 4 4 4 4 4 Yugoslav Republic of Madagascar 4 4 4 4 Malawi 4Reformsmakingiteasiertodobusiness7 Reformsmakingitmoredifficulttodobusiness eAse of Doing Business 83 Reforms in 2007/08 Dealing with Trading Starting a construction Employing Registering Getting Protecting Paying across Enforcing Closing a Economy business permits workers property credit investors taxes borders contracts business Malaysia 4 4 Maldives Mali 4 Marshall Islands Mauritania 4 4 Mauritius 4 4 4 Mexico 4 4 Micronesia Moldova 4 4 Mongolia 4 4 Montenegro 7 4 Morocco 4 4 4 Mozambique 4 4 4 Namibia 4 Nepal Netherlands New Zealand 4 4 4 Nicaragua Niger Nigeria 4 Norway Oman 4 Pakistan Palau 4 Panama 4 Papua New Guinea Paraguay Peru Philippines 4 Poland 4 Portugal 4 4 4 Puerto Rico Qatar Romania 4 Russian Federation Rwanda 4 4 4 4 Samoa 4 São Tomé and Principe Saudi Arabia 4 4 4 4 Senegal 4 4 4 Serbia 7 4 Seychelles Sierra Leone 4 4 4 4 Singapore 4 4 Slovakia 4 Slovenia 4 4 4 Solomon Islands South Africa 4 4 Spain Sri Lanka 4 4Reformsmakingiteasiertodobusiness7 Reformsmakingitmoredifficulttodobusiness 84 Doing Business 2009 Reforms in 2007/08 Dealing with Trading Starting a construction Employing Registering Getting Protecting Paying across Enforcing Closing a Economy business permits workers property credit investors taxes borders contracts business St. Kitts and Nevis St. Lucia St. Vincent and the Grenadines 4 4 Sudan Suriname Swaziland Sweden 7 Switzerland 7 Syria 4 4 Taiwan, China 4 Tajikistan 7 4 Tanzania Thailand 4 4 4 4 Timor-Leste Togo Tonga 4 4 Trinidad and Tobago Tunisia 4 4 4 4 7 Turkey 4 Uganda Ukraine 7 4 4 4 United Arab Emirates 4 United Kingdom 7 United States Uruguay 4 4 4 Uzbekistan 4 Vanuatu 4 Venezuela 7 Vietnam 4 West Bank and Gaza 4 7 4 Yemen 4 Zambia 4 4 4 Zimbabwe 7 4Reformsmakingiteasiertodobusiness7 Reformsmakingitmoredifficulttodobusiness Country tables 86 Doing Business 2009 afghanistan South Asia GNI per capita (US$) 370 Ease of doing business (rank) 162 Low income Population (m) 24.8 Starting a business (rank) 22 Registering property (rank) 174 Trading across borders (rank) 179 Procedures (number) 4 Procedures (number) 9 Documents to export (number) 12 Time (days) 9 Time (days) 250 Time to export (days) 74 Cost (% of income per capita) 59.5 Cost (% of property value) 7.0 Cost to export (US$ per container) 3,000 Minimum capital (% of income per capita) 0.0 Documents to import (number) 11 Getting credit (rank) 178 Time to import (days) 77 Dealing with construction permits (rank) 140 Strength of legal rights index (0-10) 1 Cost to import (US$ per container) 2,600 Procedures (number) 13 Depth of credit information index (0-6) 0 Time (days) 340 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 160 Cost (% of income per capita) 14,918.9 Private bureau coverage (% of adults) 0.0 Procedures (number) 47 Time (days) 1,642 Employing workers (rank) 30 Protecting investors (rank) 181 Cost (% of claim) 25.0 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 0 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 0 Closing a business (rank) 181 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 2 Time (years) No practice Rigidity of employment index (0-100) 27 Strength of investor protection index (0-10) 0.7 Cost (% of estate) No practice Firing cost (weeks of salary) 0 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 49 Payments (number per year) 8 Time (hours per year) 275 Total tax rate (% of profit) 36.4 aLbania Eastern Europe & Central Asia GNI per capita (US$) 3,290 Ease of doing business (rank) 86 Lower middle income Population (m) 3.2 Starting a business (rank) 67 Registering property (rank) 62 Trading across borders (rank) 77 Procedures (number) 6 Procedures (number) 6 Documents to export (number) 7 Time (days) 8 Time (days) 42 Time to export (days) 21 Cost (% of income per capita) 25.8 Cost (% of property value) 3.4 Cost to export (US$ per container) 770 Minimum capital (% of income per capita) 32.3 Documents to import (number) 9 Getting credit (rank) 12 Time to import (days) 22 Dealing with construction permits (rank) 170 Strength of legal rights index (0-10) 9 Cost to import (US$ per container) 775 Procedures (number) 24 Depth of credit information index (0-6) 4 Time (days) 331 Public registry coverage (% of adults) 8.3 Enforcing contracts (rank) 89 Cost (% of income per capita) 435.0 Private bureau coverage (% of adults) 0.0 Procedures (number) 39 Time (days) 390 Employing workers (rank) 108 Protecting investors (rank) 14 Cost (% of claim) 38.7 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 8 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 9 Closing a business (rank) 181 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 5 Time (years) No practice Rigidity of employment index (0-100) 35 Strength of investor protection index (0-10) 7.3 Cost (% of estate) No practice Firing cost (weeks of salary) 56 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 143 Payments (number per year) 44 Time (hours per year) 244 Total tax rate (% of profit) 50.5 aLgeria Middle East & North Africa GNI per capita (US$) 3,620 Ease of doing business (rank) 132 Lower middle income Population (m) 33.9 Starting a business (rank) 141 Registering property (rank) 162 Trading across borders (rank) 118 Procedures (number) 14 Procedures (number) 14 Documents to export (number) 8 Time (days) 24 Time (days) 51 Time to export (days) 17 Cost (% of income per capita) 10.8 Cost (% of property value) 7.5 Cost to export (US$ per container) 1,248 Minimum capital (% of income per capita) 36.6 Documents to import (number) 9 Getting credit (rank) 131 Time to import (days) 23 Dealing with construction permits (rank) 112 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,428 Procedures (number) 22 Depth of credit information index (0-6) 2 Time (days) 240 Public registry coverage (% of adults) 0.2 Enforcing contracts (rank) 126 Cost (% of income per capita) 46.8 Private bureau coverage (% of adults) 0.0 Procedures (number) 47 Time (days) 630 Employing workers (rank) 118 Protecting investors (rank) 70 Cost (% of claim) 21.9 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 6 Closing a business (rank) 49 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 4 Time (years) 2.5 Rigidity of employment index (0-100) 48 Strength of investor protection index (0-10) 5.3 Cost (% of estate) 7 Firing cost (weeks of salary) 17 Recovery rate (cents on the dollar) 41.7 Paying taxes (rank) 166 Payments (number per year) 34 Time (hours per year) 451 Total tax rate (% of profit) 74.2 counTRy TABles 87 angoLa Sub-Saharan Africa GNI per capita (US$) 2,560 Ease of doing business (rank) 168 Lower middle income Population (m) 17.0 Starting a business (rank) 156 Registering property (rank) 173 Trading across borders (rank) 172 Procedures (number) 8 Procedures (number) 7 Documents to export (number) 12 Time (days) 68 Time (days) 334 Time to export (days) 68 Cost (% of income per capita) 196.8 Cost (% of property value) 11.6 Cost to export (US$ per container) 2,250 Minimum capital (% of income per capita) 39.1 Documents to import (number) 9 Getting credit (rank) 84 Time to import (days) 62 Dealing with construction permits (rank) 125 Strength of legal rights index (0-10) 4 Cost to import (US$ per container) 3,325 Procedures (number) 12 Depth of credit information index (0-6) 4 Time (days) 328 Public registry coverage (% of adults) 2.7 Enforcing contracts (rank) 179 Cost (% of income per capita) 831.1 Private bureau coverage (% of adults) 0.0 Procedures (number) 46 Time (days) 1,011 Employing workers (rank) 174 Protecting investors (rank) 53 Cost (% of claim) 44.4 Difficulty of hiring index (0-100) 67 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 6 Closing a business (rank) 142 Difficulty of firing index (0-100) 70 Ease of shareholder suits index (0-10) 6 Time (years) 6.2 Rigidity of employment index (0-100) 66 Strength of investor protection index (0-10) 5.7 Cost (% of estate) 22 Firing cost (weeks of salary) 58 Recovery rate (cents on the dollar) 10.0 Paying taxes (rank) 130 Payments (number per year) 31 Time (hours per year) 272 Total tax rate (% of profit) 53.2 antigua and barbuda Latin America & Caribbean GNI per capita (US$) 11,520 Ease of doing business (rank) 42 High income Population (m) 0.1 Starting a business (rank) 45 Registering property (rank) 97 Trading across borders (rank) 46 Procedures (number) 8 Procedures (number) 6 Documents to export (number) 5 Time (days) 21 Time (days) 26 Time to export (days) 15 Cost (% of income per capita) 11.6 Cost (% of property value) 10.9 Cost to export (US$ per container) 1,133 Minimum capital (% of income per capita) 0.0 Documents to import (number) 6 Getting credit (rank) 109 Time to import (days) 15 Dealing with construction permits (rank) 22 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 1,133 Procedures (number) 13 Depth of credit information index (0-6) 0 Time (days) 156 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 73 Cost (% of income per capita) 25.8 Private bureau coverage (% of adults) 0.0 Procedures (number) 45 Time (days) 351 Employing workers (rank) 46 Protecting investors (rank) 24 Cost (% of claim) 22.7 Difficulty of hiring index (0-100) 11 Extent of disclosure index (0-10) 4 Rigidity of hours index (0-100) 0 Extent of director liability index (0-10) 8 Closing a business (rank) 61 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 7 Time (years) 3.0 Rigidity of employment index (0-100) 10 Strength of investor protection index (0-10) 6.3 Cost (% of estate) 7 Firing cost (weeks of salary) 52 Recovery rate (cents on the dollar) 35.5 Paying taxes (rank) 136 Payments (number per year) 56 Time (hours per year) 207 Total tax rate (% of profit) 46.8 argentina Latin America & Caribbean GNI per capita (US$) 6,050 Ease of doing business (rank) 113 Upper middle income Population (m) 39.5 Starting a business (rank) 135 Registering property (rank) 95 Trading across borders (rank) 106 Procedures (number) 15 Procedures (number) 5 Documents to export (number) 9 Time (days) 32 Time (days) 51 Time to export (days) 13 Cost (% of income per capita) 9.0 Cost (% of property value) 7.5 Cost to export (US$ per container) 1,480 Minimum capital (% of income per capita) 3.7 Documents to import (number) 7 Getting credit (rank) 59 Time to import (days) 18 Dealing with construction permits (rank) 167 Strength of legal rights index (0-10) 4 Cost to import (US$ per container) 1,810 Procedures (number) 28 Depth of credit information index (0-6) 6 Time (days) 338 Public registry coverage (% of adults) 31.2 Enforcing contracts (rank) 45 Cost (% of income per capita) 183.3 Private bureau coverage (% of adults) 100.0 Procedures (number) 36 Time (days) 590 Employing workers (rank) 130 Protecting investors (rank) 104 Cost (% of claim) 16.5 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 2 Closing a business (rank) 83 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 6 Time (years) 2.8 Rigidity of employment index (0-100) 35 Strength of investor protection index (0-10) 4.7 Cost (% of estate) 12 Firing cost (weeks of salary) 95 Recovery rate (cents on the dollar) 29.8 Paying taxes (rank) 134 Payments (number per year) 9 Time (hours per year) 453 Total tax rate (% of profit) 108.1 88 Doing Business 2009 armenia Eastern Europe & Central Asia GNI per capita (US$) 2,640 Ease of doing business (rank) 44 Lower middle income Population (m) 3.0 Starting a business (rank) 66 Registering property (rank) 5 Trading across borders (rank) 143 Procedures (number) 9 Procedures (number) 3 Documents to export (number) 7 Time (days) 18 Time (days) 4 Time to export (days) 30 Cost (% of income per capita) 3.6 Cost (% of property value) 0.3 Cost to export (US$ per container) 1,746 Minimum capital (% of income per capita) 2.3 Documents to import (number) 9 Getting credit (rank) 28 Time to import (days) 24 Dealing with construction permits (rank) 42 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 1,981 Procedures (number) 19 Depth of credit information index (0-6) 5 Time (days) 116 Public registry coverage (% of adults) 2.6 Enforcing contracts (rank) 61 Cost (% of income per capita) 28.0 Private bureau coverage (% of adults) 24.4 Procedures (number) 49 Time (days) 285 Employing workers (rank) 54 Protecting investors (rank) 88 Cost (% of claim) 19.0 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 2 Closing a business (rank) 47 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 8 Time (years) 1.9 Rigidity of employment index (0-100) 31 Strength of investor protection index (0-10) 5.0 Cost (% of estate) 4 Firing cost (weeks of salary) 13 Recovery rate (cents on the dollar) 41.8 Paying taxes (rank) 150 Payments (number per year) 50 Time (hours per year) 958 Total tax rate (% of profit) 36.6 austraLia OECD: High Income GNI per capita (US$) 35,960 Ease of doing business (rank) 9 High income Population (m) 21.0 Starting a business (rank) 3 Registering property (rank) 33 Trading across borders (rank) 45 Procedures (number) 2 Procedures (number) 5 Documents to export (number) 6 Time (days) 2 Time (days) 5 Time to export (days) 9 Cost (% of income per capita) 0.8 Cost (% of property value) 4.9 Cost to export (US$ per container) 1,200 Minimum capital (% of income per capita) 0.0 Documents to import (number) 6 Getting credit (rank) 5 Time to import (days) 12 Dealing with construction permits (rank) 57 Strength of legal rights index (0-10) 9 Cost to import (US$ per container) 1,239 Procedures (number) 16 Depth of credit information index (0-6) 5 Time (days) 221 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 20 Cost (% of income per capita) 13.2 Private bureau coverage (% of adults) 100.0 Procedures (number) 28 Time (days) 395 Employing workers (rank) 8 Protecting investors (rank) 53 Cost (% of claim) 20.7 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 8 Rigidity of hours index (0-100) 0 Extent of director liability index (0-10) 2 Closing a business (rank) 14 Difficulty of firing index (0-100) 10 Ease of shareholder suits index (0-10) 7 Time (years) 1.0 Rigidity of employment index (0-100) 3 Strength of investor protection index (0-10) 5.7 Cost (% of estate) 8 Firing cost (weeks of salary) 4 Recovery rate (cents on the dollar) 78.8 Paying taxes (rank) 48 Payments (number per year) 12 Time (hours per year) 107 Total tax rate (% of profit) 50.3 austria OECD: High Income GNI per capita (US$) 42,700 Ease of doing business (rank) 27 High income Population (m) 8.3 Starting a business (rank) 104 Registering property (rank) 36 Trading across borders (rank) 19 Procedures (number) 8 Procedures (number) 3 Documents to export (number) 4 Time (days) 28 Time (days) 32 Time to export (days) 7 Cost (% of income per capita) 5.1 Cost (% of property value) 4.5 Cost to export (US$ per container) 1,125 Minimum capital (% of income per capita) 52.8 Documents to import (number) 5 Getting credit (rank) 12 Time to import (days) 8 Dealing with construction permits (rank) 46 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 1,125 Procedures (number) 13 Depth of credit information index (0-6) 6 Time (days) 194 Public registry coverage (% of adults) 1.3 Enforcing contracts (rank) 13 Cost (% of income per capita) 70.4 Private bureau coverage (% of adults) 40.9 Procedures (number) 25 Time (days) 397 Employing workers (rank) 50 Protecting investors (rank) 126 Cost (% of claim) 18.0 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 3 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 5 Closing a business (rank) 20 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 4 Time (years) 1.1 Rigidity of employment index (0-100) 33 Strength of investor protection index (0-10) 4.0 Cost (% of estate) 18 Firing cost (weeks of salary) 2 Recovery rate (cents on the dollar) 71.5 Paying taxes (rank) 93 Payments (number per year) 22 Time (hours per year) 170 Total tax rate (% of profit) 54.5 counTRy TABles 89 aZerbaiJan Eastern Europe & Central Asia GNI per capita (US$) 2,550 Ease of doing business (rank) 33 Lower middle income Population (m) 8.6 Starting a business (rank) 13 Registering property (rank) 9 Trading across borders (rank) 174 Procedures (number) 6 Procedures (number) 4 Documents to export (number) 9 Time (days) 16 Time (days) 11 Time to export (days) 48 Cost (% of income per capita) 3.2 Cost (% of property value) 0.3 Cost to export (US$ per container) 3,075 Minimum capital (% of income per capita) 0.0 Documents to import (number) 14 Getting credit (rank) 12 Time to import (days) 56 Dealing with construction permits (rank) 155 Strength of legal rights index (0-10) 8 Cost to import (US$ per container) 3,420 Procedures (number) 31 Depth of credit information index (0-6) 5 Time (days) 207 Public registry coverage (% of adults) 3.1 Enforcing contracts (rank) 26 Cost (% of income per capita) 522.6 Private bureau coverage (% of adults) 0.0 Procedures (number) 39 Time (days) 237 Employing workers (rank) 15 Protecting investors (rank) 18 Cost (% of claim) 18.5 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 7 Rigidity of hours index (0-100) 0 Extent of director liability index (0-10) 5 Closing a business (rank) 81 Difficulty of firing index (0-100) 10 Ease of shareholder suits index (0-10) 8 Time (years) 2.7 Rigidity of employment index (0-100) 3 Strength of investor protection index (0-10) 6.7 Cost (% of estate) 8 Firing cost (weeks of salary) 22 Recovery rate (cents on the dollar) 30.1 Paying taxes (rank) 102 Payments (number per year) 23 Time (hours per year) 376 Total tax rate (% of profit) 41.1 bahamas, the Latin America & Caribbean GNI per capita (US$) 19,781 Ease of doing business (rank) 55 High income Population (m) 0.3 Starting a business (rank) 45 Registering property (rank) 143 Trading across borders (rank) 51 Procedures (number) 7 Procedures (number) 7 Documents to export (number) 6 Time (days) 31 Time (days) 48 Time to export (days) 16 Cost (% of income per capita) 9.8 Cost (% of property value) 12.5 Cost to export (US$ per container) 930 Minimum capital (% of income per capita) 0.0 Documents to import (number) 6 Getting credit (rank) 68 Time to import (days) 13 Dealing with construction permits (rank) 92 Strength of legal rights index (0-10) 9 Cost to import (US$ per container) 1,380 Procedures (number) 18 Depth of credit information index (0-6) 0 Time (days) 197 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 120 Cost (% of income per capita) 241.6 Private bureau coverage (% of adults) 0.0 Procedures (number) 49 Time (days) 427 Employing workers (rank) 44 Protecting investors (rank) 104 Cost (% of claim) 28.9 Difficulty of hiring index (0-100) 11 Extent of disclosure index (0-10) 2 Rigidity of hours index (0-100) 0 Extent of director liability index (0-10) 5 Closing a business (rank) 29 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 7 Time (years) 5.0 Rigidity of employment index (0-100) 17 Strength of investor protection index (0-10) 4.7 Cost (% of estate) 4 Firing cost (weeks of salary) 26 Recovery rate (cents on the dollar) 54.7 Paying taxes (rank) 39 Payments (number per year) 17 Time (hours per year) 58 Total tax rate (% of profit) 47.0 bahrain Middle East & North Africa GNI per capita (US$) 25,731 Ease of doing business (rank) 18 High income Population (m) 0.8 Starting a business (rank) 49 Registering property (rank) 18 Trading across borders (rank) 21 Procedures (number) 7 Procedures (number) 2 Documents to export (number) 5 Time (days) 9 Time (days) 31 Time to export (days) 14 Cost (% of income per capita) 0.6 Cost (% of property value) 0.9 Cost to export (US$ per container) 805 Minimum capital (% of income per capita) 210.1 Documents to import (number) 6 Getting credit (rank) 84 Time to import (days) 15 Dealing with construction permits (rank) 14 Strength of legal rights index (0-10) 4 Cost to import (US$ per container) 845 Procedures (number) 13 Depth of credit information index (0-6) 4 Time (days) 56 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 113 Cost (% of income per capita) 57.2 Private bureau coverage (% of adults) 35.8 Procedures (number) 48 Time (days) 635 Employing workers (rank) 26 Protecting investors (rank) 53 Cost (% of claim) 14.7 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 8 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 4 Closing a business (rank) 25 Difficulty of firing index (0-100) 50 Ease of shareholder suits index (0-10) 5 Time (years) 2.5 Rigidity of employment index (0-100) 23 Strength of investor protection index (0-10) 5.7 Cost (% of estate) 10 Firing cost (weeks of salary) 4 Recovery rate (cents on the dollar) 63.2 Paying taxes (rank) 15 Payments (number per year) 25 Time (hours per year) 36 Total tax rate (% of profit) 15.0 90 Doing Business 2009 bangLadesh South Asia GNI per capita (US$) 470 Ease of doing business (rank) 110 Low income Population (m) 158.6 Starting a business (rank) 90 Registering property (rank) 175 Trading across borders (rank) 105 Procedures (number) 7 Procedures (number) 8 Documents to export (number) 6 Time (days) 73 Time (days) 245 Time to export (days) 28 Cost (% of income per capita) 25.7 Cost (% of property value) 10.4 Cost to export (US$ per container) 970 Minimum capital (% of income per capita) 0.0 Documents to import (number) 8 Getting credit (rank) 59 Time to import (days) 32 Dealing with construction permits (rank) 114 Strength of legal rights index (0-10) 8 Cost to import (US$ per container) 1,375 Procedures (number) 14 Depth of credit information index (0-6) 2 Time (days) 231 Public registry coverage (% of adults) 0.9 Enforcing contracts (rank) 178 Cost (% of income per capita) 739.8 Private bureau coverage (% of adults) 0.0 Procedures (number) 41 Time (days) 1,442 Employing workers (rank) 132 Protecting investors (rank) 18 Cost (% of claim) 63.3 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 7 Closing a business (rank) 106 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 7 Time (years) 4.0 Rigidity of employment index (0-100) 35 Strength of investor protection index (0-10) 6.7 Cost (% of estate) 8 Firing cost (weeks of salary) 104 Recovery rate (cents on the dollar) 23.2 Paying taxes (rank) 90 Payments (number per year) 21 Time (hours per year) 302 Total tax rate (% of profit) 39.5 beLarus Eastern Europe & Central Asia GNI per capita (US$) 4,220 Ease of doing business (rank) 85 Upper middle income Population (m) 9.7 Starting a business (rank) 97 Registering property (rank) 14 Trading across borders (rank) 134 Procedures (number) 8 Procedures (number) 4 Documents to export (number) 8 Time (days) 31 Time (days) 21 Time to export (days) 20 Cost (% of income per capita) 7.8 Cost (% of property value) 0.0 Cost to export (US$ per container) 1,772 Minimum capital (% of income per capita) 12.4 Documents to import (number) 8 Getting credit (rank) 109 Time to import (days) 26 Dealing with construction permits (rank) 65 Strength of legal rights index (0-10) 2 Cost to import (US$ per container) 1,720 Procedures (number) 17 Depth of credit information index (0-6) 5 Time (days) 210 Public registry coverage (% of adults) 2.4 Enforcing contracts (rank) 14 Cost (% of income per capita) 39.2 Private bureau coverage (% of adults) 0.0 Procedures (number) 28 Time (days) 225 Employing workers (rank) 49 Protecting investors (rank) 104 Cost (% of claim) 23.4 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 1 Closing a business (rank) 71 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 8 Time (years) 5.8 Rigidity of employment index (0-100) 27 Strength of investor protection index (0-10) 4.7 Cost (% of estate) 22 Firing cost (weeks of salary) 22 Recovery rate (cents on the dollar) 33.4 Paying taxes (rank) 181 Payments (number per year) 112 Time (hours per year) 1,188 Total tax rate (% of profit) 117.5 beLgium OECD: High Income GNI per capita (US$) 40,710 Ease of doing business (rank) 19 High income Population (m) 10.6 Starting a business (rank) 20 Registering property (rank) 168 Trading across borders (rank) 43 Procedures (number) 3 Procedures (number) 7 Documents to export (number) 4 Time (days) 4 Time (days) 132 Time to export (days) 8 Cost (% of income per capita) 5.2 Cost (% of property value) 12.7 Cost to export (US$ per container) 1,619 Minimum capital (% of income per capita) 19.9 Documents to import (number) 5 Getting credit (rank) 43 Time to import (days) 9 Dealing with construction permits (rank) 44 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 1,600 Procedures (number) 14 Depth of credit information index (0-6) 4 Time (days) 169 Public registry coverage (% of adults) 57.7 Enforcing contracts (rank) 22 Cost (% of income per capita) 65.2 Private bureau coverage (% of adults) 0.0 Procedures (number) 25 Time (days) 505 Employing workers (rank) 37 Protecting investors (rank) 15 Cost (% of claim) 16.6 Difficulty of hiring index (0-100) 11 Extent of disclosure index (0-10) 8 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 6 Closing a business (rank) 8 Difficulty of firing index (0-100) 10 Ease of shareholder suits index (0-10) 7 Time (years) 0.9 Rigidity of employment index (0-100) 20 Strength of investor protection index (0-10) 7.0 Cost (% of estate) 4 Firing cost (weeks of salary) 16 Recovery rate (cents on the dollar) 86.3 Paying taxes (rank) 64 Payments (number per year) 11 Time (hours per year) 156 Total tax rate (% of profit) 58.1 counTRy TABles 91 beLiZe Latin America & Caribbean GNI per capita (US$) 3,800 Ease of doing business (rank) 78 Upper middle income Population (m) 0.3 Starting a business (rank) 139 Registering property (rank) 121 Trading across borders (rank) 114 Procedures (number) 9 Procedures (number) 8 Documents to export (number) 7 Time (days) 44 Time (days) 60 Time to export (days) 21 Cost (% of income per capita) 51.1 Cost (% of property value) 4.7 Cost to export (US$ per container) 1,810 Minimum capital (% of income per capita) 0.0 Documents to import (number) 6 Getting credit (rank) 84 Time to import (days) 21 Dealing with construction permits (rank) 2 Strength of legal rights index (0-10) 8 Cost to import (US$ per container) 2,145 Procedures (number) 11 Depth of credit information index (0-6) 0 Time (days) 66 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 168 Cost (% of income per capita) 17.8 Private bureau coverage (% of adults) 0.0 Procedures (number) 51 Time (days) 892 Employing workers (rank) 25 Protecting investors (rank) 113 Cost (% of claim) 27.5 Difficulty of hiring index (0-100) 22 Extent of disclosure index (0-10) 3 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 4 Closing a business (rank) 24 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 6 Time (years) 1.0 Rigidity of employment index (0-100) 14 Strength of investor protection index (0-10) 4.3 Cost (% of estate) 23 Firing cost (weeks of salary) 24 Recovery rate (cents on the dollar) 63.4 Paying taxes (rank) 53 Payments (number per year) 40 Time (hours per year) 147 Total tax rate (% of profit) 28.2 benin Sub-Saharan Africa GNI per capita (US$) 570 Ease of doing business (rank) 169 Low income Population (m) 9.0 Starting a business (rank) 149 Registering property (rank) 119 Trading across borders (rank) 129 Procedures (number) 7 Procedures (number) 4 Documents to export (number) 7 Time (days) 31 Time (days) 120 Time to export (days) 32 Cost (% of income per capita) 196.0 Cost (% of property value) 11.9 Cost to export (US$ per container) 1,237 Minimum capital (% of income per capita) 347.0 Documents to import (number) 7 Getting credit (rank) 145 Time to import (days) 40 Dealing with construction permits (rank) 130 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,393 Procedures (number) 15 Depth of credit information index (0-6) 1 Time (days) 410 Public registry coverage (% of adults) 10.5 Enforcing contracts (rank) 175 Cost (% of income per capita) 303.6 Private bureau coverage (% of adults) 0.0 Procedures (number) 42 Time (days) 825 Employing workers (rank) 116 Protecting investors (rank) 150 Cost (% of claim) 64.7 Difficulty of hiring index (0-100) 39 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 1 Closing a business (rank) 130 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 3 Time (years) 4.0 Rigidity of employment index (0-100) 40 Strength of investor protection index (0-10) 3.3 Cost (% of estate) 22 Firing cost (weeks of salary) 36 Recovery rate (cents on the dollar) 16.7 Paying taxes (rank) 165 Payments (number per year) 55 Time (hours per year) 270 Total tax rate (% of profit) 73.2 bhutan South Asia GNI per capita (US$) 1,770 Ease of doing business (rank) 124 Lower middle income Population (m) 0.7 Starting a business (rank) 63 Registering property (rank) 38 Trading across borders (rank) 151 Procedures (number) 8 Procedures (number) 5 Documents to export (number) 8 Time (days) 46 Time (days) 64 Time to export (days) 38 Cost (% of income per capita) 8.5 Cost (% of property value) 0.0 Cost to export (US$ per container) 1,210 Minimum capital (% of income per capita) 0.0 Documents to import (number) 11 Getting credit (rank) 172 Time to import (days) 38 Dealing with construction permits (rank) 116 Strength of legal rights index (0-10) 2 Cost to import (US$ per container) 2,140 Procedures (number) 25 Depth of credit information index (0-6) 0 Time (days) 183 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 37 Cost (% of income per capita) 158.4 Private bureau coverage (% of adults) 0.0 Procedures (number) 47 Time (days) 225 Employing workers (rank) 13 Protecting investors (rank) 126 Cost (% of claim) 0.1 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 0 Extent of director liability index (0-10) 3 Closing a business (rank) 181 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 4 Time (years) No practice Rigidity of employment index (0-100) 7 Strength of investor protection index (0-10) 4.0 Cost (% of estate) No practice Firing cost (weeks of salary) 10 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 82 Payments (number per year) 19 Time (hours per year) 274 Total tax rate (% of profit) 39.8 92 Doing Business 2009 boLivia Latin America & Caribbean GNI per capita (US$) 1,260 Ease of doing business (rank) 150 Lower middle income Population (m) 9.5 Starting a business (rank) 165 Registering property (rank) 129 Trading across borders (rank) 117 Procedures (number) 15 Procedures (number) 7 Documents to export (number) 8 Time (days) 50 Time (days) 92 Time to export (days) 19 Cost (% of income per capita) 112.4 Cost (% of property value) 4.9 Cost to export (US$ per container) 1,425 Minimum capital (% of income per capita) 2.8 Documents to import (number) 7 Getting credit (rank) 109 Time to import (days) 23 Dealing with construction permits (rank) 98 Strength of legal rights index (0-10) 1 Cost to import (US$ per container) 1,747 Procedures (number) 17 Depth of credit information index (0-6) 6 Time (days) 249 Public registry coverage (% of adults) 11.9 Enforcing contracts (rank) 133 Cost (% of income per capita) 121.6 Private bureau coverage (% of adults) 29.7 Procedures (number) 40 Time (days) 591 Employing workers (rank) 180 Protecting investors (rank) 126 Cost (% of claim) 33.2 Difficulty of hiring index (0-100) 78 Extent of disclosure index (0-10) 1 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 5 Closing a business (rank) 59 Difficulty of firing index (0-100) 100 Ease of shareholder suits index (0-10) 6 Time (years) 1.8 Rigidity of employment index (0-100) 79 Strength of investor protection index (0-10) 4.0 Cost (% of estate) 15 Firing cost (weeks of salary) Not possible Recovery rate (cents on the dollar) 37.3 Paying taxes (rank) 176 Payments (number per year) 41 Time (hours per year) 1,080 Total tax rate (% of profit) 78.1 bosnia and herZegovina Eastern Europe & Central Asia GNI per capita (US$) 3,580 Ease of doing business (rank) 119 Lower middle income Population (m) 3.9 Starting a business (rank) 161 Registering property (rank) 144 Trading across borders (rank) 55 Procedures (number) 12 Procedures (number) 7 Documents to export (number) 6 Time (days) 60 Time (days) 128 Time to export (days) 16 Cost (% of income per capita) 30.8 Cost (% of property value) 5.2 Cost to export (US$ per container) 1,070 Minimum capital (% of income per capita) 36.3 Documents to import (number) 7 Getting credit (rank) 59 Time to import (days) 16 Dealing with construction permits (rank) 137 Strength of legal rights index (0-10) 5 Cost to import (US$ per container) 1,035 Procedures (number) 16 Depth of credit information index (0-6) 5 Time (days) 296 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 123 Cost (% of income per capita) 666.9 Private bureau coverage (% of adults) 69.2 Procedures (number) 38 Time (days) 595 Employing workers (rank) 117 Protecting investors (rank) 88 Cost (% of claim) 38.4 Difficulty of hiring index (0-100) 67 Extent of disclosure index (0-10) 3 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 6 Closing a business (rank) 60 Difficulty of firing index (0-100) 30 Ease of shareholder suits index (0-10) 6 Time (years) 3.3 Rigidity of employment index (0-100) 46 Strength of investor protection index (0-10) 5.0 Cost (% of estate) 9 Firing cost (weeks of salary) 31 Recovery rate (cents on the dollar) 35.9 Paying taxes (rank) 154 Payments (number per year) 51 Time (hours per year) 428 Total tax rate (% of profit) 44.1 botswana Sub-Saharan Africa GNI per capita (US$) 5,840 Ease of doing business (rank) 38 Upper middle income Population (m) 1.9 Starting a business (rank) 80 Registering property (rank) 29 Trading across borders (rank) 149 Procedures (number) 10 Procedures (number) 4 Documents to export (number) 6 Time (days) 78 Time (days) 11 Time to export (days) 31 Cost (% of income per capita) 2.3 Cost (% of property value) 5.0 Cost to export (US$ per container) 2,508 Minimum capital (% of income per capita) 0.0 Documents to import (number) 9 Getting credit (rank) 43 Time to import (days) 42 Dealing with construction permits (rank) 119 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 3,064 Procedures (number) 24 Depth of credit information index (0-6) 4 Time (days) 167 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 92 Cost (% of income per capita) 311.9 Private bureau coverage (% of adults) 52.9 Procedures (number) 29 Time (days) 987 Employing workers (rank) 73 Protecting investors (rank) 38 Cost (% of claim) 28.1 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 7 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 8 Closing a business (rank) 26 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 3 Time (years) 1.7 Rigidity of employment index (0-100) 20 Strength of investor protection index (0-10) 6.0 Cost (% of estate) 15 Firing cost (weeks of salary) 90 Recovery rate (cents on the dollar) 60.3 Paying taxes (rank) 17 Payments (number per year) 19 Time (hours per year) 140 Total tax rate (% of profit) 17.1 counTRy TABles 93 braZiL Latin America & Caribbean GNI per capita (US$) 5,910 Ease of doing business (rank) 125 Upper middle income Population (m) 191.6 Starting a business (rank) 127 Registering property (rank) 111 Trading across borders (rank) 92 Procedures (number) 18 Procedures (number) 14 Documents to export (number) 8 Time (days) 152 Time (days) 42 Time to export (days) 14 Cost (% of income per capita) 8.2 Cost (% of property value) 2.7 Cost to export (US$ per container) 1,240 Minimum capital (% of income per capita) 0.0 Documents to import (number) 7 Getting credit (rank) 84 Time to import (days) 19 Dealing with construction permits (rank) 108 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,275 Procedures (number) 18 Depth of credit information index (0-6) 5 Time (days) 411 Public registry coverage (% of adults) 20.2 Enforcing contracts (rank) 100 Cost (% of income per capita) 46.7 Private bureau coverage (% of adults) 62.2 Procedures (number) 45 Time (days) 616 Employing workers (rank) 121 Protecting investors (rank) 70 Cost (% of claim) 16.5 Difficulty of hiring index (0-100) 78 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 7 Closing a business (rank) 127 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 3 Time (years) 4.0 Rigidity of employment index (0-100) 46 Strength of investor protection index (0-10) 5.3 Cost (% of estate) 12 Firing cost (weeks of salary) 37 Recovery rate (cents on the dollar) 17.1 Paying taxes (rank) 145 Payments (number per year) 11 Time (hours per year) 2,600 Total tax rate (% of profit) 69.4 brunei East Asia & Pacific GNI per capita (US$) 36,216 Ease of doing business (rank) 88 High income Population (m) 0.4 Starting a business (rank) 130 Registering property (rank) 177 Trading across borders (rank) 42 Procedures (number) 18 Procedures (number) No practice Documents to export (number) 6 Time (days) 116 Time (days) No practice Time to export (days) 28 Cost (% of income per capita) 9.2 Cost (% of property value) No practice Cost to export (US$ per container) 630 Minimum capital (% of income per capita) 0.0 Documents to import (number) 6 Getting credit (rank) 109 Time to import (days) 19 Dealing with construction permits (rank) 72 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 708 Procedures (number) 32 Depth of credit information index (0-6) 0 Time (days) 167 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 157 Cost (% of income per capita) 5.3 Private bureau coverage (% of adults) 0.0 Procedures (number) 58 Time (days) 540 Employing workers (rank) 5 Protecting investors (rank) 113 Cost (% of claim) 36.6 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 3 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 2 Closing a business (rank) 35 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 8 Time (years) 2.5 Rigidity of employment index (0-100) 7 Strength of investor protection index (0-10) 4.3 Cost (% of estate) 4 Firing cost (weeks of salary) 4 Recovery rate (cents on the dollar) 47.2 Paying taxes (rank) 35 Payments (number per year) 15 Time (hours per year) 144 Total tax rate (% of profit) 37.4 buLgaria Eastern Europe & Central Asia GNI per capita (US$) 4,590 Ease of doing business (rank) 45 Upper middle income Population (m) 7.6 Starting a business (rank) 81 Registering property (rank) 59 Trading across borders (rank) 102 Procedures (number) 4 Procedures (number) 8 Documents to export (number) 5 Time (days) 49 Time (days) 19 Time to export (days) 23 Cost (% of income per capita) 2.0 Cost (% of property value) 2.3 Cost to export (US$ per container) 1,626 Minimum capital (% of income per capita) 47.8 Documents to import (number) 7 Getting credit (rank) 5 Time to import (days) 21 Dealing with construction permits (rank) 117 Strength of legal rights index (0-10) 8 Cost to import (US$ per container) 1,776 Procedures (number) 24 Depth of credit information index (0-6) 6 Time (days) 139 Public registry coverage (% of adults) 30.7 Enforcing contracts (rank) 86 Cost (% of income per capita) 493.6 Private bureau coverage (% of adults) 5.0 Procedures (number) 39 Time (days) 564 Employing workers (rank) 60 Protecting investors (rank) 38 Cost (% of claim) 23.8 Difficulty of hiring index (0-100) 17 Extent of disclosure index (0-10) 10 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 75 Difficulty of firing index (0-100) 10 Ease of shareholder suits index (0-10) 7 Time (years) 3.3 Rigidity of employment index (0-100) 29 Strength of investor protection index (0-10) 6.0 Cost (% of estate) 9 Firing cost (weeks of salary) 9 Recovery rate (cents on the dollar) 32.1 Paying taxes (rank) 94 Payments (number per year) 17 Time (hours per year) 616 Total tax rate (% of profit) 34.9 94 Doing Business 2009 burkina faso Sub-Saharan Africa GNI per capita (US$) 430 Ease of doing business (rank) 148 Low income Population (m) 14.8 Starting a business (rank) 113 Registering property (rank) 148 Trading across borders (rank) 173 Procedures (number) 5 Procedures (number) 6 Documents to export (number) 11 Time (days) 16 Time (days) 136 Time to export (days) 45 Cost (% of income per capita) 62.3 Cost (% of property value) 10.2 Cost to export (US$ per container) 2,132 Minimum capital (% of income per capita) 458.8 Documents to import (number) 11 Getting credit (rank) 145 Time to import (days) 54 Dealing with construction permits (rank) 106 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 3,630 Procedures (number) 15 Depth of credit information index (0-6) 1 Time (days) 214 Public registry coverage (% of adults) 1.9 Enforcing contracts (rank) 110 Cost (% of income per capita) 577.9 Private bureau coverage (% of adults) 0.0 Procedures (number) 37 Time (days) 446 Employing workers (rank) 57 Protecting investors (rank) 142 Cost (% of claim) 107.4 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 1 Closing a business (rank) 110 Difficulty of firing index (0-100) 10 Ease of shareholder suits index (0-10) 4 Time (years) 4.0 Rigidity of employment index (0-100) 21 Strength of investor protection index (0-10) 3.7 Cost (% of estate) 9 Firing cost (weeks of salary) 34 Recovery rate (cents on the dollar) 21.7 Paying taxes (rank) 132 Payments (number per year) 45 Time (hours per year) 270 Total tax rate (% of profit) 44.6 burundi Sub-Saharan Africa GNI per capita (US$) 110 Ease of doing business (rank) 177 Low income Population (m) 8.5 Starting a business (rank) 138 Registering property (rank) 125 Trading across borders (rank) 170 Procedures (number) 11 Procedures (number) 5 Documents to export (number) 9 Time (days) 43 Time (days) 94 Time to export (days) 47 Cost (% of income per capita) 215.0 Cost (% of property value) 10.7 Cost to export (US$ per container) 2,147 Minimum capital (% of income per capita) 0.0 Documents to import (number) 10 Getting credit (rank) 163 Time to import (days) 71 Dealing with construction permits (rank) 173 Strength of legal rights index (0-10) 2 Cost to import (US$ per container) 3,705 Procedures (number) 20 Depth of credit information index (0-6) 1 Time (days) 384 Public registry coverage (% of adults) 0.3 Enforcing contracts (rank) 170 Cost (% of income per capita) 8,515.8 Private bureau coverage (% of adults) 0.0 Procedures (number) 44 Time (days) 832 Employing workers (rank) 70 Protecting investors (rank) 150 Cost (% of claim) 38.6 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 4 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 181 Difficulty of firing index (0-100) 30 Ease of shareholder suits index (0-10) 5 Time (years) No practice Rigidity of employment index (0-100) 30 Strength of investor protection index (0-10) 3.3 Cost (% of estate) No practice Firing cost (weeks of salary) 26 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 114 Payments (number per year) 32 Time (hours per year) 140 Total tax rate (% of profit) 278.7 Cambodia East Asia & Pacific GNI per capita (US$) 540 Ease of doing business (rank) 135 Low income Population (m) 14.4 Starting a business (rank) 169 Registering property (rank) 108 Trading across borders (rank) 122 Procedures (number) 9 Procedures (number) 7 Documents to export (number) 11 Time (days) 85 Time (days) 56 Time to export (days) 22 Cost (% of income per capita) 151.7 Cost (% of property value) 4.4 Cost to export (US$ per container) 732 Minimum capital (% of income per capita) 43.9 Documents to import (number) 11 Getting credit (rank) 68 Time to import (days) 30 Dealing with construction permits (rank) 147 Strength of legal rights index (0-10) 9 Cost to import (US$ per container) 872 Procedures (number) 23 Depth of credit information index (0-6) 0 Time (days) 709 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 136 Cost (% of income per capita) 64.3 Private bureau coverage (% of adults) 0.0 Procedures (number) 44 Time (days) 401 Employing workers (rank) 134 Protecting investors (rank) 70 Cost (% of claim) 102.7 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 9 Closing a business (rank) 181 Difficulty of firing index (0-100) 30 Ease of shareholder suits index (0-10) 2 Time (years) No practice Rigidity of employment index (0-100) 45 Strength of investor protection index (0-10) 5.3 Cost (% of estate) No practice Firing cost (weeks of salary) 39 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 24 Payments (number per year) 27 Time (hours per year) 137 Total tax rate (% of profit) 22.6 counTRy TABles 95 Cameroon Sub-Saharan Africa GNI per capita (US$) 1,050 Ease of doing business (rank) 164 Lower middle income Population (m) 18.5 Starting a business (rank) 171 Registering property (rank) 138 Trading across borders (rank) 137 Procedures (number) 13 Procedures (number) 5 Documents to export (number) 9 Time (days) 37 Time (days) 93 Time to export (days) 27 Cost (% of income per capita) 137.1 Cost (% of property value) 17.8 Cost to export (US$ per container) 995 Minimum capital (% of income per capita) 188.0 Documents to import (number) 8 Getting credit (rank) 131 Time to import (days) 33 Dealing with construction permits (rank) 154 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,672 Procedures (number) 15 Depth of credit information index (0-6) 2 Time (days) 426 Public registry coverage (% of adults) 4.9 Enforcing contracts (rank) 172 Cost (% of income per capita) 1,277.2 Private bureau coverage (% of adults) 0.0 Procedures (number) 43 Time (days) 800 Employing workers (rank) 124 Protecting investors (rank) 113 Cost (% of claim) 46.6 Difficulty of hiring index (0-100) 28 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 1 Closing a business (rank) 95 Difficulty of firing index (0-100) 70 Ease of shareholder suits index (0-10) 6 Time (years) 3.2 Rigidity of employment index (0-100) 46 Strength of investor protection index (0-10) 4.3 Cost (% of estate) 15 Firing cost (weeks of salary) 33 Recovery rate (cents on the dollar) 25.5 Paying taxes (rank) 171 Payments (number per year) 41 Time (hours per year) 1,400 Total tax rate (% of profit) 51.4 Canada OECD: High Income GNI per capita (US$) 39,420 Ease of doing business (rank) 8 High income Population (m) 33.0 Starting a business (rank) 2 Registering property (rank) 32 Trading across borders (rank) 44 Procedures (number) 1 Procedures (number) 6 Documents to export (number) 3 Time (days) 5 Time (days) 17 Time to export (days) 7 Cost (% of income per capita) 0.5 Cost (% of property value) 1.8 Cost to export (US$ per container) 1,660 Minimum capital (% of income per capita) 0.0 Documents to import (number) 4 Getting credit (rank) 28 Time to import (days) 11 Dealing with construction permits (rank) 29 Strength of legal rights index (0-10) 6 Cost to import (US$ per container) 1,785 Procedures (number) 14 Depth of credit information index (0-6) 6 Time (days) 75 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 58 Cost (% of income per capita) 103.7 Private bureau coverage (% of adults) 100.0 Procedures (number) 36 Time (days) 570 Employing workers (rank) 18 Protecting investors (rank) 5 Cost (% of claim) 22.3 Difficulty of hiring index (0-100) 11 Extent of disclosure index (0-10) 8 Rigidity of hours index (0-100) 0 Extent of director liability index (0-10) 9 Closing a business (rank) 4 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 8 Time (years) 0.8 Rigidity of employment index (0-100) 4 Strength of investor protection index (0-10) 8.3 Cost (% of estate) 4 Firing cost (weeks of salary) 28 Recovery rate (cents on the dollar) 88.7 Paying taxes (rank) 28 Payments (number per year) 9 Time (hours per year) 119 Total tax rate (% of profit) 45.4 Cape verde Sub-Saharan Africa GNI per capita (US$) 2,430 Ease of doing business (rank) 143 Lower middle income Population (m) 0.5 Starting a business (rank) 163 Registering property (rank) 124 Trading across borders (rank) 56 Procedures (number) 12 Procedures (number) 6 Documents to export (number) 5 Time (days) 52 Time (days) 73 Time to export (days) 19 Cost (% of income per capita) 35.7 Cost (% of property value) 7.7 Cost to export (US$ per container) 1,325 Minimum capital (% of income per capita) 47.5 Documents to import (number) 5 Getting credit (rank) 123 Time to import (days) 18 Dealing with construction permits (rank) 79 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,129 Procedures (number) 18 Depth of credit information index (0-6) 3 Time (days) 120 Public registry coverage (% of adults) 21.8 Enforcing contracts (rank) 40 Cost (% of income per capita) 639.1 Private bureau coverage (% of adults) 0.0 Procedures (number) 37 Time (days) 425 Employing workers (rank) 169 Protecting investors (rank) 126 Cost (% of claim) 21.8 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 1 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 5 Closing a business (rank) 181 Difficulty of firing index (0-100) 70 Ease of shareholder suits index (0-10) 6 Time (years) No practice Rigidity of employment index (0-100) 54 Strength of investor protection index (0-10) 4.0 Cost (% of estate) No practice Firing cost (weeks of salary) 93 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 115 Payments (number per year) 57 Time (hours per year) 100 Total tax rate (% of profit) 54.0 96 Doing Business 2009 CentraL afriCan repubLiC Sub-Saharan Africa GNI per capita (US$) 380 Ease of doing business (rank) 180 Low income Population (m) 4.3 Starting a business (rank) 152 Registering property (rank) 133 Trading across borders (rank) 175 Procedures (number) 10 Procedures (number) 5 Documents to export (number) 8 Time (days) 14 Time (days) 75 Time to export (days) 57 Cost (% of income per capita) 232.3 Cost (% of property value) 18.6 Cost to export (US$ per container) 5,121 Minimum capital (% of income per capita) 513.9 Documents to import (number) 18 Getting credit (rank) 131 Time to import (days) 66 Dealing with construction permits (rank) 138 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 5,074 Procedures (number) 21 Depth of credit information index (0-6) 2 Time (days) 239 Public registry coverage (% of adults) 1.2 Enforcing contracts (rank) 169 Cost (% of income per capita) 278.9 Private bureau coverage (% of adults) 0.0 Procedures (number) 43 Time (days) 660 Employing workers (rank) 151 Protecting investors (rank) 126 Cost (% of claim) 82.0 Difficulty of hiring index (0-100) 72 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 181 Difficulty of firing index (0-100) 50 Ease of shareholder suits index (0-10) 5 Time (years) 4.8 Rigidity of employment index (0-100) 61 Strength of investor protection index (0-10) 4.0 Cost (% of estate) 76 Firing cost (weeks of salary) 22 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 178 Payments (number per year) 54 Time (hours per year) 504 Total tax rate (% of profit) 203.8 Chad Sub-Saharan Africa GNI per capita (US$) 540 Ease of doing business (rank) 175 Low income Population (m) 10.8 Starting a business (rank) 180 Registering property (rank) 132 Trading across borders (rank) 159 Procedures (number) 19 Procedures (number) 6 Documents to export (number) 6 Time (days) 75 Time (days) 44 Time to export (days) 78 Cost (% of income per capita) 175.0 Cost (% of property value) 22.7 Cost to export (US$ per container) 5,367 Minimum capital (% of income per capita) 365.1 Documents to import (number) 9 Getting credit (rank) 145 Time to import (days) 102 Dealing with construction permits (rank) 70 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 6,020 Procedures (number) 9 Depth of credit information index (0-6) 1 Time (days) 181 Public registry coverage (% of adults) 0.6 Enforcing contracts (rank) 166 Cost (% of income per capita) 974.7 Private bureau coverage (% of adults) 0.0 Procedures (number) 41 Time (days) 743 Employing workers (rank) 139 Protecting investors (rank) 126 Cost (% of claim) 77.4 Difficulty of hiring index (0-100) 39 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 181 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 5 Time (years) No practice Rigidity of employment index (0-100) 46 Strength of investor protection index (0-10) 4.0 Cost (% of estate) No practice Firing cost (weeks of salary) 36 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 130 Payments (number per year) 54 Time (hours per year) 122 Total tax rate (% of profit) 60.5 ChiLe Latin America & Caribbean GNI per capita (US$) 8,350 Ease of doing business (rank) 40 Upper middle income Population (m) 16.6 Starting a business (rank) 55 Registering property (rank) 39 Trading across borders (rank) 53 Procedures (number) 9 Procedures (number) 6 Documents to export (number) 6 Time (days) 27 Time (days) 31 Time to export (days) 21 Cost (% of income per capita) 7.5 Cost (% of property value) 1.3 Cost to export (US$ per container) 745 Minimum capital (% of income per capita) 0.0 Documents to import (number) 7 Getting credit (rank) 68 Time to import (days) 21 Dealing with construction permits (rank) 62 Strength of legal rights index (0-10) 4 Cost to import (US$ per container) 795 Procedures (number) 18 Depth of credit information index (0-6) 5 Time (days) 155 Public registry coverage (% of adults) 28.1 Enforcing contracts (rank) 65 Cost (% of income per capita) 101.3 Private bureau coverage (% of adults) 34.5 Procedures (number) 36 Time (days) 480 Employing workers (rank) 74 Protecting investors (rank) 38 Cost (% of claim) 28.6 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 7 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 6 Closing a business (rank) 112 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 5 Time (years) 4.5 Rigidity of employment index (0-100) 24 Strength of investor protection index (0-10) 6.0 Cost (% of estate) 15 Firing cost (weeks of salary) 52 Recovery rate (cents on the dollar) 21.3 Paying taxes (rank) 41 Payments (number per year) 10 Time (hours per year) 316 Total tax rate (% of profit) 25.9 counTRy TABles 97 China East Asia & Pacific GNI per capita (US$) 2,360 Ease of doing business (rank) 83 Lower middle income Population (m) 1,320.0 Starting a business (rank) 151 Registering property (rank) 30 Trading across borders (rank) 48 Procedures (number) 14 Procedures (number) 4 Documents to export (number) 7 Time (days) 40 Time (days) 29 Time to export (days) 21 Cost (% of income per capita) 8.4 Cost (% of property value) 3.2 Cost to export (US$ per container) 460 Minimum capital (% of income per capita) 158.1 Documents to import (number) 6 Getting credit (rank) 59 Time to import (days) 24 Dealing with construction permits (rank) 176 Strength of legal rights index (0-10) 6 Cost to import (US$ per container) 545 Procedures (number) 37 Depth of credit information index (0-6) 4 Time (days) 336 Public registry coverage (% of adults) 58.8 Enforcing contracts (rank) 18 Cost (% of income per capita) 698.4 Private bureau coverage (% of adults) 0.0 Procedures (number) 34 Time (days) 406 Employing workers (rank) 111 Protecting investors (rank) 88 Cost (% of claim) 11.1 Difficulty of hiring index (0-100) 11 Extent of disclosure index (0-10) 10 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 1 Closing a business (rank) 62 Difficulty of firing index (0-100) 50 Ease of shareholder suits index (0-10) 4 Time (years) 1.7 Rigidity of employment index (0-100) 27 Strength of investor protection index (0-10) 5.0 Cost (% of estate) 22 Firing cost (weeks of salary) 91 Recovery rate (cents on the dollar) 35.3 Paying taxes (rank) 132 Payments (number per year) 9 Time (hours per year) 504 Total tax rate (% of profit) 79.9 CoLombia Latin America & Caribbean GNI per capita (US$) 3,250 Ease of doing business (rank) 53 Lower middle income Population (m) 46.1 Starting a business (rank) 79 Registering property (rank) 78 Trading across borders (rank) 96 Procedures (number) 9 Procedures (number) 9 Documents to export (number) 6 Time (days) 36 Time (days) 23 Time to export (days) 14 Cost (% of income per capita) 14.1 Cost (% of property value) 2.4 Cost to export (US$ per container) 1,690 Minimum capital (% of income per capita) 0.0 Documents to import (number) 8 Getting credit (rank) 59 Time to import (days) 15 Dealing with construction permits (rank) 54 Strength of legal rights index (0-10) 5 Cost to import (US$ per container) 1,640 Procedures (number) 13 Depth of credit information index (0-6) 5 Time (days) 114 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 149 Cost (% of income per capita) 661.6 Private bureau coverage (% of adults) 42.5 Procedures (number) 34 Time (days) 1,346 Employing workers (rank) 80 Protecting investors (rank) 24 Cost (% of claim) 52.6 Difficulty of hiring index (0-100) 11 Extent of disclosure index (0-10) 8 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 2 Closing a business (rank) 30 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 9 Time (years) 3.0 Rigidity of employment index (0-100) 24 Strength of investor protection index (0-10) 6.3 Cost (% of estate) 1 Firing cost (weeks of salary) 59 Recovery rate (cents on the dollar) 52.8 Paying taxes (rank) 141 Payments (number per year) 31 Time (hours per year) 256 Total tax rate (% of profit) 78.4 Comoros Sub-Saharan Africa GNI per capita (US$) 680 Ease of doing business (rank) 155 Low income Population (m) 0.6 Starting a business (rank) 160 Registering property (rank) 93 Trading across borders (rank) 129 Procedures (number) 11 Procedures (number) 5 Documents to export (number) 10 Time (days) 23 Time (days) 24 Time to export (days) 30 Cost (% of income per capita) 188.6 Cost (% of property value) 20.8 Cost to export (US$ per container) 1,073 Minimum capital (% of income per capita) 280.8 Documents to import (number) 10 Getting credit (rank) 163 Time to import (days) 21 Dealing with construction permits (rank) 64 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,057 Procedures (number) 18 Depth of credit information index (0-6) 0 Time (days) 164 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 150 Cost (% of income per capita) 77.9 Private bureau coverage (% of adults) 0.0 Procedures (number) 43 Time (days) 506 Employing workers (rank) 162 Protecting investors (rank) 126 Cost (% of claim) 89.4 Difficulty of hiring index (0-100) 39 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 181 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 5 Time (years) No practice Rigidity of employment index (0-100) 46 Strength of investor protection index (0-10) 4.0 Cost (% of estate) No practice Firing cost (weeks of salary) 100 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 55 Payments (number per year) 20 Time (hours per year) 100 Total tax rate (% of profit) 48.8 98 Doing Business 2009 Congo, dem. rep. Sub-Saharan Africa GNI per capita (US$) 140 Ease of doing business (rank) 181 Low income Population (m) 62.4 Starting a business (rank) 154 Registering property (rank) 152 Trading across borders (rank) 160 Procedures (number) 13 Procedures (number) 8 Documents to export (number) 8 Time (days) 155 Time (days) 57 Time to export (days) 46 Cost (% of income per capita) 435.4 Cost (% of property value) 9.2 Cost to export (US$ per container) 2,607 Minimum capital (% of income per capita) 0.0 Documents to import (number) 9 Getting credit (rank) 163 Time to import (days) 66 Dealing with construction permits (rank) 141 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 2,483 Procedures (number) 14 Depth of credit information index (0-6) 0 Time (days) 322 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 173 Cost (% of income per capita) 1,725.8 Private bureau coverage (% of adults) 0.0 Procedures (number) 43 Time (days) 645 Employing workers (rank) 175 Protecting investors (rank) 150 Cost (% of claim) 151.8 Difficulty of hiring index (0-100) 72 Extent of disclosure index (0-10) 3 Rigidity of hours index (0-100) 80 Extent of director liability index (0-10) 3 Closing a business (rank) 150 Difficulty of firing index (0-100) 70 Ease of shareholder suits index (0-10) 4 Time (years) 5.2 Rigidity of employment index (0-100) 74 Strength of investor protection index (0-10) 3.3 Cost (% of estate) 29 Firing cost (weeks of salary) 31 Recovery rate (cents on the dollar) 5.4 Paying taxes (rank) 153 Payments (number per year) 32 Time (hours per year) 308 Total tax rate (% of profit) 229.8 Congo, rep. Sub-Saharan Africa GNI per capita (US$) 1,540 Ease of doing business (rank) 178 Lower middle income Population (m) 3.8 Starting a business (rank) 157 Registering property (rank) 171 Trading across borders (rank) 176 Procedures (number) 10 Procedures (number) 7 Documents to export (number) 11 Time (days) 37 Time (days) 116 Time to export (days) 50 Cost (% of income per capita) 106.4 Cost (% of property value) 16.5 Cost to export (US$ per container) 2,490 Minimum capital (% of income per capita) 131.2 Documents to import (number) 12 Getting credit (rank) 131 Time to import (days) 62 Dealing with construction permits (rank) 68 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 2,959 Procedures (number) 14 Depth of credit information index (0-6) 2 Time (days) 169 Public registry coverage (% of adults) 6.9 Enforcing contracts (rank) 155 Cost (% of income per capita) 345.6 Private bureau coverage (% of adults) 0.0 Procedures (number) 44 Time (days) 560 Employing workers (rank) 170 Protecting investors (rank) 150 Cost (% of claim) 53.2 Difficulty of hiring index (0-100) 78 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 117 Difficulty of firing index (0-100) 70 Ease of shareholder suits index (0-10) 3 Time (years) 3.0 Rigidity of employment index (0-100) 69 Strength of investor protection index (0-10) 3.3 Cost (% of estate) 24 Firing cost (weeks of salary) 33 Recovery rate (cents on the dollar) 20.4 Paying taxes (rank) 179 Payments (number per year) 61 Time (hours per year) 606 Total tax rate (% of profit) 65.5 Costa riCa Latin America & Caribbean GNI per capita (US$) 5,560 Ease of doing business (rank) 117 Upper middle income Population (m) 4.5 Starting a business (rank) 123 Registering property (rank) 45 Trading across borders (rank) 94 Procedures (number) 12 Procedures (number) 6 Documents to export (number) 7 Time (days) 60 Time (days) 21 Time to export (days) 18 Cost (% of income per capita) 20.5 Cost (% of property value) 3.4 Cost to export (US$ per container) 1,050 Minimum capital (% of income per capita) 0.0 Documents to import (number) 8 Getting credit (rank) 59 Time to import (days) 25 Dealing with construction permits (rank) 123 Strength of legal rights index (0-10) 5 Cost to import (US$ per container) 1,050 Procedures (number) 23 Depth of credit information index (0-6) 5 Time (days) 191 Public registry coverage (% of adults) 5.9 Enforcing contracts (rank) 132 Cost (% of income per capita) 211.7 Private bureau coverage (% of adults) 51.6 Procedures (number) 40 Time (days) 877 Employing workers (rank) 77 Protecting investors (rank) 164 Cost (% of claim) 24.3 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 2 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 5 Closing a business (rank) 98 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 2 Time (years) 3.5 Rigidity of employment index (0-100) 28 Strength of investor protection index (0-10) 3.0 Cost (% of estate) 15 Firing cost (weeks of salary) 35 Recovery rate (cents on the dollar) 25.4 Paying taxes (rank) 152 Payments (number per year) 43 Time (hours per year) 282 Total tax rate (% of profit) 55.7 counTRy TABles 99 CÔte d'ivoire Sub-Saharan Africa GNI per capita (US$) 910 Ease of doing business (rank) 161 Low income Population (m) 19.3 Starting a business (rank) 167 Registering property (rank) 139 Trading across borders (rank) 155 Procedures (number) 10 Procedures (number) 6 Documents to export (number) 10 Time (days) 40 Time (days) 62 Time to export (days) 23 Cost (% of income per capita) 135.1 Cost (% of property value) 13.9 Cost to export (US$ per container) 1,904 Minimum capital (% of income per capita) 215.9 Documents to import (number) 9 Getting credit (rank) 145 Time to import (days) 43 Dealing with construction permits (rank) 160 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 2,437 Procedures (number) 21 Depth of credit information index (0-6) 1 Time (days) 628 Public registry coverage (% of adults) 2.9 Enforcing contracts (rank) 124 Cost (% of income per capita) 243.3 Private bureau coverage (% of adults) 0.0 Procedures (number) 33 Time (days) 770 Employing workers (rank) 112 Protecting investors (rank) 150 Cost (% of claim) 41.7 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 68 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 3 Time (years) 2.2 Rigidity of employment index (0-100) 38 Strength of investor protection index (0-10) 3.3 Cost (% of estate) 18 Firing cost (weeks of salary) 49 Recovery rate (cents on the dollar) 34.0 Paying taxes (rank) 148 Payments (number per year) 66 Time (hours per year) 270 Total tax rate (% of profit) 45.4 Croatia Eastern Europe & Central Asia GNI per capita (US$) 10,460 Ease of doing business (rank) 106 Upper middle income Population (m) 4.4 Starting a business (rank) 117 Registering property (rank) 109 Trading across borders (rank) 97 Procedures (number) 8 Procedures (number) 5 Documents to export (number) 7 Time (days) 40 Time (days) 174 Time to export (days) 20 Cost (% of income per capita) 11.5 Cost (% of property value) 5.0 Cost to export (US$ per container) 1,281 Minimum capital (% of income per capita) 16.6 Documents to import (number) 8 Getting credit (rank) 68 Time to import (days) 16 Dealing with construction permits (rank) 163 Strength of legal rights index (0-10) 6 Cost to import (US$ per container) 1,141 Procedures (number) 19 Depth of credit information index (0-6) 3 Time (days) 410 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 44 Cost (% of income per capita) 655.2 Private bureau coverage (% of adults) 71.8 Procedures (number) 38 Time (days) 561 Employing workers (rank) 146 Protecting investors (rank) 126 Cost (% of claim) 13.8 Difficulty of hiring index (0-100) 61 Extent of disclosure index (0-10) 1 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 5 Closing a business (rank) 79 Difficulty of firing index (0-100) 50 Ease of shareholder suits index (0-10) 6 Time (years) 3.1 Rigidity of employment index (0-100) 50 Strength of investor protection index (0-10) 4.0 Cost (% of estate) 15 Firing cost (weeks of salary) 39 Recovery rate (cents on the dollar) 30.5 Paying taxes (rank) 33 Payments (number per year) 17 Time (hours per year) 196 Total tax rate (% of profit) 32.5 CZeCh repubLiC OECD: High Income GNI per capita (US$) 14,450 Ease of doing business (rank) 75 High income Population (m) 10.3 Starting a business (rank) 86 Registering property (rank) 65 Trading across borders (rank) 49 Procedures (number) 8 Procedures (number) 4 Documents to export (number) 4 Time (days) 15 Time (days) 123 Time to export (days) 17 Cost (% of income per capita) 9.6 Cost (% of property value) 3.0 Cost to export (US$ per container) 985 Minimum capital (% of income per capita) 31.8 Documents to import (number) 7 Getting credit (rank) 43 Time to import (days) 20 Dealing with construction permits (rank) 86 Strength of legal rights index (0-10) 6 Cost to import (US$ per container) 1,087 Procedures (number) 36 Depth of credit information index (0-6) 5 Time (days) 180 Public registry coverage (% of adults) 4.6 Enforcing contracts (rank) 95 Cost (% of income per capita) 16.9 Private bureau coverage (% of adults) 65.2 Procedures (number) 27 Time (days) 820 Employing workers (rank) 59 Protecting investors (rank) 88 Cost (% of claim) 33.0 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 2 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 5 Closing a business (rank) 113 Difficulty of firing index (0-100) 10 Ease of shareholder suits index (0-10) 8 Time (years) 6.5 Rigidity of employment index (0-100) 28 Strength of investor protection index (0-10) 5.0 Cost (% of estate) 15 Firing cost (weeks of salary) 22 Recovery rate (cents on the dollar) 20.9 Paying taxes (rank) 118 Payments (number per year) 12 Time (hours per year) 930 Total tax rate (% of profit) 48.6 100 Doing Business 2009 denmark OECD: High Income GNI per capita (US$) 54,910 Ease of doing business (rank) 5 High income Population (m) 5.5 Starting a business (rank) 16 Registering property (rank) 43 Trading across borders (rank) 3 Procedures (number) 4 Procedures (number) 6 Documents to export (number) 4 Time (days) 6 Time (days) 42 Time to export (days) 5 Cost (% of income per capita) 0.0 Cost (% of property value) 0.6 Cost to export (US$ per container) 681 Minimum capital (% of income per capita) 40.1 Documents to import (number) 3 Getting credit (rank) 12 Time to import (days) 5 Dealing with construction permits (rank) 7 Strength of legal rights index (0-10) 9 Cost to import (US$ per container) 681 Procedures (number) 6 Depth of credit information index (0-6) 4 Time (days) 69 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 29 Cost (% of income per capita) 60.9 Private bureau coverage (% of adults) 5.0 Procedures (number) 34 Time (days) 380 Employing workers (rank) 10 Protecting investors (rank) 24 Cost (% of claim) 23.3 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 7 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 5 Closing a business (rank) 7 Difficulty of firing index (0-100) 10 Ease of shareholder suits index (0-10) 7 Time (years) 1.1 Rigidity of employment index (0-100) 10 Strength of investor protection index (0-10) 6.3 Cost (% of estate) 4 Firing cost (weeks of salary) 0 Recovery rate (cents on the dollar) 86.5 Paying taxes (rank) 13 Payments (number per year) 9 Time (hours per year) 135 Total tax rate (% of profit) 29.9 dJibouti Middle East & North Africa GNI per capita (US$) 1,090 Ease of doing business (rank) 153 Lower middle income Population (m) 0.8 Starting a business (rank) 173 Registering property (rank) 134 Trading across borders (rank) 35 Procedures (number) 11 Procedures (number) 7 Documents to export (number) 5 Time (days) 37 Time (days) 40 Time to export (days) 19 Cost (% of income per capita) 200.2 Cost (% of property value) 13.2 Cost to export (US$ per container) 1,058 Minimum capital (% of income per capita) 514.0 Documents to import (number) 5 Getting credit (rank) 172 Time to import (days) 16 Dealing with construction permits (rank) 99 Strength of legal rights index (0-10) 1 Cost to import (US$ per container) 978 Procedures (number) 14 Depth of credit information index (0-6) 1 Time (days) 195 Public registry coverage (% of adults) 0.2 Enforcing contracts (rank) 159 Cost (% of income per capita) 982.8 Private bureau coverage (% of adults) 0.0 Procedures (number) 40 Time (days) 1,225 Employing workers (rank) 137 Protecting investors (rank) 177 Cost (% of claim) 34.0 Difficulty of hiring index (0-100) 67 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 2 Closing a business (rank) 132 Difficulty of firing index (0-100) 30 Ease of shareholder suits index (0-10) 0 Time (years) 5.0 Rigidity of employment index (0-100) 46 Strength of investor protection index (0-10) 2.3 Cost (% of estate) 18 Firing cost (weeks of salary) 56 Recovery rate (cents on the dollar) 15.9 Paying taxes (rank) 61 Payments (number per year) 35 Time (hours per year) 114 Total tax rate (% of profit) 38.7 dominiCa Latin America & Caribbean GNI per capita (US$) 4,250 Ease of doing business (rank) 74 Upper middle income Population (m) 0.1 Starting a business (rank) 21 Registering property (rank) 103 Trading across borders (rank) 82 Procedures (number) 5 Procedures (number) 5 Documents to export (number) 7 Time (days) 14 Time (days) 42 Time to export (days) 13 Cost (% of income per capita) 25.5 Cost (% of property value) 13.7 Cost to export (US$ per container) 1,297 Minimum capital (% of income per capita) 0.0 Documents to import (number) 8 Getting credit (rank) 68 Time to import (days) 15 Dealing with construction permits (rank) 24 Strength of legal rights index (0-10) 9 Cost to import (US$ per container) 1,310 Procedures (number) 13 Depth of credit information index (0-6) 0 Time (days) 182 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 164 Cost (% of income per capita) 12.8 Private bureau coverage (% of adults) 0.0 Procedures (number) 47 Time (days) 681 Employing workers (rank) 61 Protecting investors (rank) 24 Cost (% of claim) 36.0 Difficulty of hiring index (0-100) 11 Extent of disclosure index (0-10) 4 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 8 Closing a business (rank) 181 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 7 Time (years) No practice Rigidity of employment index (0-100) 17 Strength of investor protection index (0-10) 6.3 Cost (% of estate) No practice Firing cost (weeks of salary) 58 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 63 Payments (number per year) 38 Time (hours per year) 120 Total tax rate (% of profit) 37.0 counTRy TABles 101 dominiCan repubLiC Latin America & Caribbean GNI per capita (US$) 3,550 Ease of doing business (rank) 97 Lower middle income Population (m) 9.8 Starting a business (rank) 84 Registering property (rank) 106 Trading across borders (rank) 32 Procedures (number) 8 Procedures (number) 7 Documents to export (number) 6 Time (days) 19 Time (days) 60 Time to export (days) 9 Cost (% of income per capita) 19.4 Cost (% of property value) 3.8 Cost to export (US$ per container) 916 Minimum capital (% of income per capita) 0.0 Documents to import (number) 7 Getting credit (rank) 68 Time to import (days) 10 Dealing with construction permits (rank) 77 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,150 Procedures (number) 17 Depth of credit information index (0-6) 6 Time (days) 214 Public registry coverage (% of adults) 33.9 Enforcing contracts (rank) 83 Cost (% of income per capita) 93.2 Private bureau coverage (% of adults) 35.0 Procedures (number) 34 Time (days) 460 Employing workers (rank) 97 Protecting investors (rank) 126 Cost (% of claim) 40.9 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 0 Closing a business (rank) 144 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 7 Time (years) 3.5 Rigidity of employment index (0-100) 28 Strength of investor protection index (0-10) 4.0 Cost (% of estate) 38 Firing cost (weeks of salary) 88 Recovery rate (cents on the dollar) 8.9 Paying taxes (rank) 72 Payments (number per year) 9 Time (hours per year) 480 Total tax rate (% of profit) 35.7 eCuador Latin America & Caribbean GNI per capita (US$) 3,080 Ease of doing business (rank) 136 Lower middle income Population (m) 13.3 Starting a business (rank) 158 Registering property (rank) 64 Trading across borders (rank) 124 Procedures (number) 14 Procedures (number) 9 Documents to export (number) 9 Time (days) 65 Time (days) 16 Time to export (days) 20 Cost (% of income per capita) 38.5 Cost (% of property value) 2.2 Cost to export (US$ per container) 1,345 Minimum capital (% of income per capita) 12.7 Documents to import (number) 7 Getting credit (rank) 84 Time to import (days) 29 Dealing with construction permits (rank) 85 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,332 Procedures (number) 19 Depth of credit information index (0-6) 5 Time (days) 155 Public registry coverage (% of adults) 37.7 Enforcing contracts (rank) 101 Cost (% of income per capita) 272.7 Private bureau coverage (% of adults) 46.8 Procedures (number) 39 Time (days) 588 Employing workers (rank) 171 Protecting investors (rank) 126 Cost (% of claim) 27.2 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 1 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 5 Closing a business (rank) 131 Difficulty of firing index (0-100) 50 Ease of shareholder suits index (0-10) 6 Time (years) 5.3 Rigidity of employment index (0-100) 51 Strength of investor protection index (0-10) 4.0 Cost (% of estate) 18 Firing cost (weeks of salary) 135 Recovery rate (cents on the dollar) 16.1 Paying taxes (rank) 69 Payments (number per year) 8 Time (hours per year) 600 Total tax rate (% of profit) 34.9 egypt Middle East & North Africa GNI per capita (US$) 1,580 Ease of doing business (rank) 114 Lower middle income Population (m) 75.5 Starting a business (rank) 41 Registering property (rank) 85 Trading across borders (rank) 24 Procedures (number) 6 Procedures (number) 7 Documents to export (number) 6 Time (days) 7 Time (days) 72 Time to export (days) 14 Cost (% of income per capita) 18.3 Cost (% of property value) 0.9 Cost to export (US$ per container) 737 Minimum capital (% of income per capita) 2.0 Documents to import (number) 6 Getting credit (rank) 84 Time to import (days) 15 Dealing with construction permits (rank) 165 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 823 Procedures (number) 28 Depth of credit information index (0-6) 5 Time (days) 249 Public registry coverage (% of adults) 2.2 Enforcing contracts (rank) 151 Cost (% of income per capita) 376.7 Private bureau coverage (% of adults) 4.7 Procedures (number) 42 Time (days) 1,010 Employing workers (rank) 107 Protecting investors (rank) 70 Cost (% of claim) 26.2 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 8 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 3 Closing a business (rank) 128 Difficulty of firing index (0-100) 60 Ease of shareholder suits index (0-10) 5 Time (years) 4.2 Rigidity of employment index (0-100) 27 Strength of investor protection index (0-10) 5.3 Cost (% of estate) 22 Firing cost (weeks of salary) 132 Recovery rate (cents on the dollar) 16.8 Paying taxes (rank) 144 Payments (number per year) 29 Time (hours per year) 711 Total tax rate (% of profit) 46.1 102 Doing Business 2009 eL saLvador Latin America & Caribbean GNI per capita (US$) 2,850 Ease of doing business (rank) 72 Lower middle income Population (m) 6.9 Starting a business (rank) 103 Registering property (rank) 42 Trading across borders (rank) 57 Procedures (number) 8 Procedures (number) 5 Documents to export (number) 8 Time (days) 17 Time (days) 31 Time to export (days) 14 Cost (% of income per capita) 49.6 Cost (% of property value) 3.7 Cost to export (US$ per container) 880 Minimum capital (% of income per capita) 3.5 Documents to import (number) 9 Getting credit (rank) 43 Time to import (days) 10 Dealing with construction permits (rank) 121 Strength of legal rights index (0-10) 5 Cost to import (US$ per container) 820 Procedures (number) 34 Depth of credit information index (0-6) 6 Time (days) 155 Public registry coverage (% of adults) 18.4 Enforcing contracts (rank) 53 Cost (% of income per capita) 176.3 Private bureau coverage (% of adults) 83.0 Procedures (number) 30 Time (days) 786 Employing workers (rank) 87 Protecting investors (rank) 113 Cost (% of claim) 19.2 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 2 Closing a business (rank) 78 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 6 Time (years) 4.0 Rigidity of employment index (0-100) 24 Strength of investor protection index (0-10) 4.3 Cost (% of estate) 9 Firing cost (weeks of salary) 86 Recovery rate (cents on the dollar) 30.8 Paying taxes (rank) 124 Payments (number per year) 53 Time (hours per year) 320 Total tax rate (% of profit) 34.9 eQuatoriaL guinea Sub-Saharan Africa GNI per capita (US$) 12,860 Ease of doing business (rank) 167 High income Population (m) 0.5 Starting a business (rank) 174 Registering property (rank) 69 Trading across borders (rank) 133 Procedures (number) 20 Procedures (number) 6 Documents to export (number) 7 Time (days) 136 Time (days) 23 Time to export (days) 30 Cost (% of income per capita) 101.7 Cost (% of property value) 6.2 Cost to export (US$ per container) 1,411 Minimum capital (% of income per capita) 15.4 Documents to import (number) 7 Getting credit (rank) 131 Time to import (days) 49 Dealing with construction permits (rank) 87 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,411 Procedures (number) 18 Depth of credit information index (0-6) 2 Time (days) 201 Public registry coverage (% of adults) 2.7 Enforcing contracts (rank) 69 Cost (% of income per capita) 159.4 Private bureau coverage (% of adults) 0.0 Procedures (number) 40 Time (days) 553 Employing workers (rank) 178 Protecting investors (rank) 142 Cost (% of claim) 18.5 Difficulty of hiring index (0-100) 67 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 181 Difficulty of firing index (0-100) 70 Ease of shareholder suits index (0-10) 4 Time (years) No practice Rigidity of employment index (0-100) 66 Strength of investor protection index (0-10) 3.7 Cost (% of estate) No practice Firing cost (weeks of salary) 133 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 161 Payments (number per year) 46 Time (hours per year) 296 Total tax rate (% of profit) 59.5 eritrea Sub-Saharan Africa GNI per capita (US$) 230 Ease of doing business (rank) 173 Low income Population (m) 4.8 Starting a business (rank) 178 Registering property (rank) 165 Trading across borders (rank) 163 Procedures (number) 13 Procedures (number) 12 Documents to export (number) 9 Time (days) 84 Time (days) 101 Time to export (days) 50 Cost (% of income per capita) 102.2 Cost (% of property value) 5.2 Cost to export (US$ per container) 1,431 Minimum capital (% of income per capita) 396.7 Documents to import (number) 13 Getting credit (rank) 172 Time to import (days) 60 Dealing with construction permits (rank) 181 Strength of legal rights index (0-10) 2 Cost to import (US$ per container) 1,581 Procedures (number) No practice Depth of credit information index (0-6) 0 Time (days) No practice Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 51 Cost (% of income per capita) No practice Private bureau coverage (% of adults) 0.0 Procedures (number) 39 Time (days) 405 Employing workers (rank) 65 Protecting investors (rank) 104 Cost (% of claim) 22.6 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 4 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 5 Closing a business (rank) 181 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 5 Time (years) No practice Rigidity of employment index (0-100) 20 Strength of investor protection index (0-10) 4.7 Cost (% of estate) No practice Firing cost (weeks of salary) 69 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 105 Payments (number per year) 18 Time (hours per year) 216 Total tax rate (% of profit) 84.5 counTRy TABles 103 estonia Eastern Europe & Central Asia GNI per capita (US$) 13,200 Ease of doing business (rank) 22 High income Population (m) 1.3 Starting a business (rank) 23 Registering property (rank) 24 Trading across borders (rank) 5 Procedures (number) 5 Procedures (number) 3 Documents to export (number) 3 Time (days) 7 Time (days) 51 Time to export (days) 5 Cost (% of income per capita) 1.7 Cost (% of property value) 0.4 Cost to export (US$ per container) 730 Minimum capital (% of income per capita) 23.7 Documents to import (number) 4 Getting credit (rank) 43 Time to import (days) 5 Dealing with construction permits (rank) 19 Strength of legal rights index (0-10) 6 Cost to import (US$ per container) 740 Procedures (number) 14 Depth of credit information index (0-6) 5 Time (days) 118 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 30 Cost (% of income per capita) 27.5 Private bureau coverage (% of adults) 20.6 Procedures (number) 36 Time (days) 425 Employing workers (rank) 163 Protecting investors (rank) 53 Cost (% of claim) 18.9 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 8 Rigidity of hours index (0-100) 80 Extent of director liability index (0-10) 3 Closing a business (rank) 58 Difficulty of firing index (0-100) 60 Ease of shareholder suits index (0-10) 6 Time (years) 3.0 Rigidity of employment index (0-100) 58 Strength of investor protection index (0-10) 5.7 Cost (% of estate) 9 Firing cost (weeks of salary) 35 Recovery rate (cents on the dollar) 37.5 Paying taxes (rank) 34 Payments (number per year) 10 Time (hours per year) 81 Total tax rate (% of profit) 48.6 ethiopia Sub-Saharan Africa GNI per capita (US$) 220 Ease of doing business (rank) 116 Low income Population (m) 79.1 Starting a business (rank) 118 Registering property (rank) 154 Trading across borders (rank) 152 Procedures (number) 7 Procedures (number) 13 Documents to export (number) 8 Time (days) 16 Time (days) 43 Time to export (days) 46 Cost (% of income per capita) 29.8 Cost (% of property value) 7.1 Cost to export (US$ per container) 2,087 Minimum capital (% of income per capita) 693.6 Documents to import (number) 8 Getting credit (rank) 123 Time to import (days) 42 Dealing with construction permits (rank) 59 Strength of legal rights index (0-10) 4 Cost to import (US$ per container) 2,893 Procedures (number) 12 Depth of credit information index (0-6) 2 Time (days) 128 Public registry coverage (% of adults) 0.1 Enforcing contracts (rank) 78 Cost (% of income per capita) 790.7 Private bureau coverage (% of adults) 0.0 Procedures (number) 39 Time (days) 690 Employing workers (rank) 95 Protecting investors (rank) 113 Cost (% of claim) 15.2 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 4 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 4 Closing a business (rank) 74 Difficulty of firing index (0-100) 30 Ease of shareholder suits index (0-10) 5 Time (years) 3.0 Rigidity of employment index (0-100) 34 Strength of investor protection index (0-10) 4.3 Cost (% of estate) 15 Firing cost (weeks of salary) 40 Recovery rate (cents on the dollar) 32.2 Paying taxes (rank) 37 Payments (number per year) 20 Time (hours per year) 198 Total tax rate (% of profit) 31.1 fiJi East Asia & Pacific GNI per capita (US$) 3,800 Ease of doing business (rank) 39 Upper middle income Population (m) 0.8 Starting a business (rank) 87 Registering property (rank) 40 Trading across borders (rank) 108 Procedures (number) 8 Procedures (number) 3 Documents to export (number) 13 Time (days) 46 Time (days) 68 Time to export (days) 24 Cost (% of income per capita) 25.2 Cost (% of property value) 2.0 Cost to export (US$ per container) 654 Minimum capital (% of income per capita) 0.0 Documents to import (number) 13 Getting credit (rank) 12 Time to import (days) 24 Dealing with construction permits (rank) 55 Strength of legal rights index (0-10) 9 Cost to import (US$ per container) 630 Procedures (number) 19 Depth of credit information index (0-6) 4 Time (days) 135 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 64 Cost (% of income per capita) 51.2 Private bureau coverage (% of adults) 42.3 Procedures (number) 34 Time (days) 397 Employing workers (rank) 32 Protecting investors (rank) 38 Cost (% of claim) 38.9 Difficulty of hiring index (0-100) 11 Extent of disclosure index (0-10) 3 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 8 Closing a business (rank) 119 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 7 Time (years) 1.8 Rigidity of employment index (0-100) 17 Strength of investor protection index (0-10) 6.0 Cost (% of estate) 38 Firing cost (weeks of salary) 22 Recovery rate (cents on the dollar) 20.1 Paying taxes (rank) 71 Payments (number per year) 33 Time (hours per year) 140 Total tax rate (% of profit) 41.5 104 Doing Business 2009 finLand OECD: High Income GNI per capita (US$) 44,400 Ease of doing business (rank) 14 High income Population (m) 5.3 Starting a business (rank) 18 Registering property (rank) 21 Trading across borders (rank) 4 Procedures (number) 3 Procedures (number) 3 Documents to export (number) 4 Time (days) 14 Time (days) 14 Time to export (days) 8 Cost (% of income per capita) 1.0 Cost (% of property value) 4.0 Cost to export (US$ per container) 495 Minimum capital (% of income per capita) 7.4 Documents to import (number) 5 Getting credit (rank) 28 Time to import (days) 8 Dealing with construction permits (rank) 43 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 575 Procedures (number) 18 Depth of credit information index (0-6) 5 Time (days) 38 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 5 Cost (% of income per capita) 118.3 Private bureau coverage (% of adults) 14.8 Procedures (number) 32 Time (days) 235 Employing workers (rank) 129 Protecting investors (rank) 53 Cost (% of claim) 10.4 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 4 Closing a business (rank) 5 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 7 Time (years) 0.9 Rigidity of employment index (0-100) 48 Strength of investor protection index (0-10) 5.7 Cost (% of estate) 4 Firing cost (weeks of salary) 26 Recovery rate (cents on the dollar) 87.3 Paying taxes (rank) 97 Payments (number per year) 20 Time (hours per year) 269 Total tax rate (% of profit) 47.8 franCe OECD: High Income GNI per capita (US$) 38,500 Ease of doing business (rank) 31 High income Population (m) 61.7 Starting a business (rank) 14 Registering property (rank) 166 Trading across borders (rank) 22 Procedures (number) 5 Procedures (number) 9 Documents to export (number) 2 Time (days) 7 Time (days) 113 Time to export (days) 9 Cost (% of income per capita) 1.0 Cost (% of property value) 6.3 Cost to export (US$ per container) 1,078 Minimum capital (% of income per capita) 0.0 Documents to import (number) 2 Getting credit (rank) 43 Time to import (days) 11 Dealing with construction permits (rank) 18 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 1,248 Procedures (number) 13 Depth of credit information index (0-6) 4 Time (days) 137 Public registry coverage (% of adults) 28.3 Enforcing contracts (rank) 10 Cost (% of income per capita) 23.8 Private bureau coverage (% of adults) 0.0 Procedures (number) 30 Time (days) 331 Employing workers (rank) 148 Protecting investors (rank) 70 Cost (% of claim) 17.4 Difficulty of hiring index (0-100) 67 Extent of disclosure index (0-10) 10 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 40 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 5 Time (years) 1.9 Rigidity of employment index (0-100) 56 Strength of investor protection index (0-10) 5.3 Cost (% of estate) 9 Firing cost (weeks of salary) 32 Recovery rate (cents on the dollar) 44.7 Paying taxes (rank) 66 Payments (number per year) 11 Time (hours per year) 132 Total tax rate (% of profit) 65.4 gabon Sub-Saharan Africa GNI per capita (US$) 6,670 Ease of doing business (rank) 151 Upper middle income Population (m) 1.3 Starting a business (rank) 148 Registering property (rank) 158 Trading across borders (rank) 128 Procedures (number) 9 Procedures (number) 8 Documents to export (number) 7 Time (days) 58 Time (days) 60 Time to export (days) 20 Cost (% of income per capita) 20.3 Cost (% of property value) 10.5 Cost to export (US$ per container) 1,945 Minimum capital (% of income per capita) 30.2 Documents to import (number) 8 Getting credit (rank) 131 Time to import (days) 22 Dealing with construction permits (rank) 60 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,955 Procedures (number) 16 Depth of credit information index (0-6) 2 Time (days) 210 Public registry coverage (% of adults) 20.7 Enforcing contracts (rank) 147 Cost (% of income per capita) 39.4 Private bureau coverage (% of adults) 0.0 Procedures (number) 38 Time (days) 1,070 Employing workers (rank) 154 Protecting investors (rank) 150 Cost (% of claim) 34.3 Difficulty of hiring index (0-100) 17 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 134 Difficulty of firing index (0-100) 80 Ease of shareholder suits index (0-10) 3 Time (years) 5.0 Rigidity of employment index (0-100) 52 Strength of investor protection index (0-10) 3.3 Cost (% of estate) 15 Firing cost (weeks of salary) 43 Recovery rate (cents on the dollar) 15.2 Paying taxes (rank) 101 Payments (number per year) 26 Time (hours per year) 272 Total tax rate (% of profit) 44.7 counTRy TABles 105 gambia, the Sub-Saharan Africa GNI per capita (US$) 320 Ease of doing business (rank) 130 Low income Population (m) 1.7 Starting a business (rank) 101 Registering property (rank) 111 Trading across borders (rank) 73 Procedures (number) 8 Procedures (number) 5 Documents to export (number) 6 Time (days) 27 Time (days) 371 Time to export (days) 24 Cost (% of income per capita) 254.9 Cost (% of property value) 4.6 Cost to export (US$ per container) 831 Minimum capital (% of income per capita) 0.0 Documents to import (number) 8 Getting credit (rank) 131 Time to import (days) 23 Dealing with construction permits (rank) 74 Strength of legal rights index (0-10) 5 Cost to import (US$ per container) 922 Procedures (number) 17 Depth of credit information index (0-6) 0 Time (days) 146 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 63 Cost (% of income per capita) 394.0 Private bureau coverage (% of adults) 0.0 Procedures (number) 32 Time (days) 434 Employing workers (rank) 55 Protecting investors (rank) 170 Cost (% of claim) 37.9 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 2 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 1 Closing a business (rank) 120 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 5 Time (years) 3.0 Rigidity of employment index (0-100) 27 Strength of investor protection index (0-10) 2.7 Cost (% of estate) 15 Firing cost (weeks of salary) 26 Recovery rate (cents on the dollar) 19.5 Paying taxes (rank) 175 Payments (number per year) 50 Time (hours per year) 376 Total tax rate (% of profit) 292.4 georgia Eastern Europe & Central Asia GNI per capita (US$) 2,120 Ease of doing business (rank) 15 Lower middle income Population (m) 4.4 Starting a business (rank) 4 Registering property (rank) 2 Trading across borders (rank) 81 Procedures (number) 3 Procedures (number) 2 Documents to export (number) 8 Time (days) 3 Time (days) 3 Time to export (days) 12 Cost (% of income per capita) 4.0 Cost (% of property value) 0.0 Cost to export (US$ per container) 1,380 Minimum capital (% of income per capita) 0.0 Documents to import (number) 7 Getting credit (rank) 28 Time to import (days) 14 Dealing with construction permits (rank) 10 Strength of legal rights index (0-10) 6 Cost to import (US$ per container) 1,340 Procedures (number) 12 Depth of credit information index (0-6) 6 Time (days) 113 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 43 Cost (% of income per capita) 20.3 Private bureau coverage (% of adults) 4.5 Procedures (number) 36 Time (days) 285 Employing workers (rank) 5 Protecting investors (rank) 38 Cost (% of claim) 29.9 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 8 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 6 Closing a business (rank) 92 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 4 Time (years) 3.3 Rigidity of employment index (0-100) 7 Strength of investor protection index (0-10) 6.0 Cost (% of estate) 4 Firing cost (weeks of salary) 4 Recovery rate (cents on the dollar) 27.9 Paying taxes (rank) 110 Payments (number per year) 30 Time (hours per year) 387 Total tax rate (% of profit) 38.6 germany OECD: High Income GNI per capita (US$) 38,860 Ease of doing business (rank) 25 High income Population (m) 82.3 Starting a business (rank) 102 Registering property (rank) 52 Trading across borders (rank) 11 Procedures (number) 9 Procedures (number) 4 Documents to export (number) 4 Time (days) 18 Time (days) 40 Time to export (days) 7 Cost (% of income per capita) 5.6 Cost (% of property value) 5.2 Cost to export (US$ per container) 822 Minimum capital (% of income per capita) 42.2 Documents to import (number) 5 Getting credit (rank) 12 Time to import (days) 7 Dealing with construction permits (rank) 15 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 887 Procedures (number) 12 Depth of credit information index (0-6) 6 Time (days) 100 Public registry coverage (% of adults) 0.7 Enforcing contracts (rank) 9 Cost (% of income per capita) 62.2 Private bureau coverage (% of adults) 98.4 Procedures (number) 30 Time (days) 394 Employing workers (rank) 142 Protecting investors (rank) 88 Cost (% of claim) 14.4 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 5 Closing a business (rank) 33 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 5 Time (years) 1.2 Rigidity of employment index (0-100) 44 Strength of investor protection index (0-10) 5.0 Cost (% of estate) 8 Firing cost (weeks of salary) 69 Recovery rate (cents on the dollar) 52.2 Paying taxes (rank) 80 Payments (number per year) 16 Time (hours per year) 196 Total tax rate (% of profit) 50.5 106 Doing Business 2009 ghana Sub-Saharan Africa GNI per capita (US$) 590 Ease of doing business (rank) 87 Low income Population (m) 23.5 Starting a business (rank) 137 Registering property (rank) 31 Trading across borders (rank) 76 Procedures (number) 9 Procedures (number) 5 Documents to export (number) 6 Time (days) 34 Time (days) 34 Time to export (days) 19 Cost (% of income per capita) 32.7 Cost (% of property value) 1.2 Cost to export (US$ per container) 1,003 Minimum capital (% of income per capita) 16.6 Documents to import (number) 7 Getting credit (rank) 109 Time to import (days) 29 Dealing with construction permits (rank) 142 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 1,130 Procedures (number) 18 Depth of credit information index (0-6) 0 Time (days) 220 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 50 Cost (% of income per capita) 1,282.6 Private bureau coverage (% of adults) 0.0 Procedures (number) 36 Time (days) 487 Employing workers (rank) 145 Protecting investors (rank) 38 Cost (% of claim) 23.0 Difficulty of hiring index (0-100) 22 Extent of disclosure index (0-10) 7 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 5 Closing a business (rank) 104 Difficulty of firing index (0-100) 50 Ease of shareholder suits index (0-10) 6 Time (years) 1.9 Rigidity of employment index (0-100) 37 Strength of investor protection index (0-10) 6.0 Cost (% of estate) 22 Firing cost (weeks of salary) 178 Recovery rate (cents on the dollar) 24.0 Paying taxes (rank) 65 Payments (number per year) 33 Time (hours per year) 224 Total tax rate (% of profit) 32.7 greeCe OECD: High Income GNI per capita (US$) 29,630 Ease of doing business (rank) 96 High income Population (m) 11.2 Starting a business (rank) 133 Registering property (rank) 101 Trading across borders (rank) 70 Procedures (number) 15 Procedures (number) 11 Documents to export (number) 5 Time (days) 19 Time (days) 22 Time to export (days) 20 Cost (% of income per capita) 10.2 Cost (% of property value) 3.8 Cost to export (US$ per container) 1,153 Minimum capital (% of income per capita) 19.6 Documents to import (number) 6 Getting credit (rank) 109 Time to import (days) 25 Dealing with construction permits (rank) 45 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,265 Procedures (number) 15 Depth of credit information index (0-6) 4 Time (days) 169 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 85 Cost (% of income per capita) 46.4 Private bureau coverage (% of adults) 39.0 Procedures (number) 39 Time (days) 819 Employing workers (rank) 133 Protecting investors (rank) 150 Cost (% of claim) 14.4 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 1 Rigidity of hours index (0-100) 80 Extent of director liability index (0-10) 4 Closing a business (rank) 41 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 5 Time (years) 2.0 Rigidity of employment index (0-100) 51 Strength of investor protection index (0-10) 3.3 Cost (% of estate) 9 Firing cost (weeks of salary) 24 Recovery rate (cents on the dollar) 44.2 Paying taxes (rank) 62 Payments (number per year) 10 Time (hours per year) 224 Total tax rate (% of profit) 47.4 grenada Latin America & Caribbean GNI per capita (US$) 4,670 Ease of doing business (rank) 84 Upper middle income Population (m) 0.1 Starting a business (rank) 40 Registering property (rank) 156 Trading across borders (rank) 63 Procedures (number) 6 Procedures (number) 8 Documents to export (number) 6 Time (days) 20 Time (days) 77 Time to export (days) 16 Cost (% of income per capita) 30.2 Cost (% of property value) 7.4 Cost to export (US$ per container) 1,131 Minimum capital (% of income per capita) 0.0 Documents to import (number) 5 Getting credit (rank) 68 Time to import (days) 20 Dealing with construction permits (rank) 16 Strength of legal rights index (0-10) 9 Cost to import (US$ per container) 1,478 Procedures (number) 10 Depth of credit information index (0-6) 0 Time (days) 149 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 163 Cost (% of income per capita) 31.1 Private bureau coverage (% of adults) 0.0 Procedures (number) 47 Time (days) 723 Employing workers (rank) 51 Protecting investors (rank) 24 Cost (% of claim) 32.6 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 4 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 8 Closing a business (rank) 181 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 7 Time (years) No practice Rigidity of employment index (0-100) 21 Strength of investor protection index (0-10) 6.3 Cost (% of estate) No practice Firing cost (weeks of salary) 29 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 74 Payments (number per year) 30 Time (hours per year) 140 Total tax rate (% of profit) 45.3 counTRy TABles 107 guatemaLa Latin America & Caribbean GNI per capita (US$) 2,440 Ease of doing business (rank) 112 Lower middle income Population (m) 13.3 Starting a business (rank) 147 Registering property (rank) 27 Trading across borders (rank) 123 Procedures (number) 11 Procedures (number) 5 Documents to export (number) 10 Time (days) 26 Time (days) 30 Time to export (days) 19 Cost (% of income per capita) 50.6 Cost (% of property value) 1.1 Cost to export (US$ per container) 1,182 Minimum capital (% of income per capita) 26.3 Documents to import (number) 10 Getting credit (rank) 28 Time to import (days) 18 Dealing with construction permits (rank) 164 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 1,302 Procedures (number) 22 Depth of credit information index (0-6) 5 Time (days) 215 Public registry coverage (% of adults) 16.1 Enforcing contracts (rank) 106 Cost (% of income per capita) 1,204.1 Private bureau coverage (% of adults) 19.7 Procedures (number) 31 Time (days) 1,459 Employing workers (rank) 106 Protecting investors (rank) 126 Cost (% of claim) 26.5 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 3 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 3 Closing a business (rank) 90 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 6 Time (years) 3.0 Rigidity of employment index (0-100) 28 Strength of investor protection index (0-10) 4.0 Cost (% of estate) 15 Firing cost (weeks of salary) 101 Recovery rate (cents on the dollar) 28.2 Paying taxes (rank) 120 Payments (number per year) 39 Time (hours per year) 344 Total tax rate (% of profit) 36.5 guinea Sub-Saharan Africa GNI per capita (US$) 400 Ease of doing business (rank) 171 Low income Population (m) 9.4 Starting a business (rank) 177 Registering property (rank) 157 Trading across borders (rank) 110 Procedures (number) 13 Procedures (number) 6 Documents to export (number) 7 Time (days) 41 Time (days) 104 Time to export (days) 33 Cost (% of income per capita) 135.7 Cost (% of property value) 13.9 Cost to export (US$ per container) 720 Minimum capital (% of income per capita) 476.9 Documents to import (number) 9 Getting credit (rank) 163 Time to import (days) 32 Dealing with construction permits (rank) 162 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 1,191 Procedures (number) 32 Depth of credit information index (0-6) 0 Time (days) 255 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 131 Cost (% of income per capita) 243.0 Private bureau coverage (% of adults) 0.0 Procedures (number) 50 Time (days) 276 Employing workers (rank) 114 Protecting investors (rank) 170 Cost (% of claim) 45.0 Difficulty of hiring index (0-100) 33 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 109 Difficulty of firing index (0-100) 40 Ease of shareholder suits index (0-10) 1 Time (years) 3.8 Rigidity of employment index (0-100) 44 Strength of investor protection index (0-10) 2.7 Cost (% of estate) 8 Firing cost (weeks of salary) 26 Recovery rate (cents on the dollar) 22.0 Paying taxes (rank) 168 Payments (number per year) 56 Time (hours per year) 416 Total tax rate (% of profit) 49.9 guinea-bissau Sub-Saharan Africa GNI per capita (US$) 200 Ease of doing business (rank) 179 Low income Population (m) 1.7 Starting a business (rank) 181 Registering property (rank) 170 Trading across borders (rank) 111 Procedures (number) 17 Procedures (number) 9 Documents to export (number) 6 Time (days) 233 Time (days) 211 Time to export (days) 25 Cost (% of income per capita) 257.7 Cost (% of property value) 5.4 Cost to export (US$ per container) 1,545 Minimum capital (% of income per capita) 1,015.0 Documents to import (number) 6 Getting credit (rank) 145 Time to import (days) 24 Dealing with construction permits (rank) 109 Strength of legal rights index (0-10) 3 Cost to import (US$ per container) 2,349 Procedures (number) 15 Depth of credit information index (0-6) 1 Time (days) 167 Public registry coverage (% of adults) 1.0 Enforcing contracts (rank) 139 Cost (% of income per capita) 2,628.9 Private bureau coverage (% of adults) 0.0 Procedures (number) 41 Time (days) 1,140 Employing workers (rank) 176 Protecting investors (rank) 126 Cost (% of claim) 25.0 Difficulty of hiring index (0-100) 67 Extent of disclosure index (0-10) 6 Rigidity of hours index (0-100) 60 Extent of director liability index (0-10) 1 Closing a business (rank) 181 Difficulty of firing index (0-100) 70 Ease of shareholder suits index (0-10) 5 Time (years) No practice Rigidity of employment index (0-100) 66 Strength of investor protection index (0-10) 4.0 Cost (% of estate) No practice Firing cost (weeks of salary) 87 Recovery rate (cents on the dollar) 0.0 Paying taxes (rank) 117 Payments (number per year) 46 Time (hours per year) 208 Total tax rate (% of profit) 45.9 108 Doing Business 2009 guyana Latin America & Caribbean GNI per capita (US$) 1,300 Ease of doing business (rank) 105 Lower middle income Population (m) 0.7 Starting a business (rank) 100 Registering property (rank) 63 Trading across borders (rank) 113 Procedures (number) 8 Procedures (number) 6 Documents to export (number) 7 Time (days) 40 Time (days) 34 Time to export (days) 30 Cost (% of income per capita) 68.4 Cost (% of property value) 4.5 Cost to export (US$ per container) 1,050 Minimum capital (% of income per capita) 0.0 Documents to import (number) 8 Getting credit (rank) 145 Time to import (days) 35 Dealing with construction permits (rank) 37 Strength of legal rights index (0-10) 4 Cost to import (US$ per container) 1,056 Procedures (number) 11 Depth of credit information index (0-6) 0 Time (days) 133 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 73 Cost (% of income per capita) 255.8 Private bureau coverage (% of adults) 0.0 Procedures (number) 36 Time (days) 581 Employing workers (rank) 72 Protecting investors (rank) 70 Cost (% of claim) 25.2 Difficulty of hiring index (0-100) 22 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 5 Closing a business (rank) 126 Difficulty of firing index (0-100) 20 Ease of shareholder suits index (0-10) 6 Time (years) 3.0 Rigidity of employment index (0-100) 21 Strength of investor protection index (0-10) 5.3 Cost (% of estate) 29 Firing cost (weeks of salary) 56 Recovery rate (cents on the dollar) 17.6 Paying taxes (rank) 108 Payments (number per year) 34 Time (hours per year) 288 Total tax rate (% of profit) 39.4 haiti Latin America & Caribbean GNI per capita (US$) 560 Ease of doing business (rank) 154 Low income Population (m) 9.6 Starting a business (rank) 176 Registering property (rank) 128 Trading across borders (rank) 146 Procedures (number) 13 Procedures (number) 5 Documents to export (number) 8 Time (days) 195 Time (days) 405 Time to export (days) 43 Cost (% of income per capita) 159.6 Cost (% of property value) 6.4 Cost to export (US$ per container) 1,020 Minimum capital (% of income per capita) 26.6 Documents to import (number) 10 Getting credit (rank) 145 Time to import (days) 37 Dealing with construction permits (rank) 126 Strength of legal rights index (0-10) 2 Cost to import (US$ per container) 1,560 Procedures (number) 11 Depth of credit information index (0-6) 2 Time (days) 1,179 Public registry coverage (% of adults) 0.7 Enforcing contracts (rank) 92 Cost (% of income per capita) 675.2 Private bureau coverage (% of adults) 0.0 Procedures (number) 35 Time (days) 508 Employing workers (rank) 35 Protecting investors (rank) 164 Cost (% of claim) 42.6 Difficulty of hiring index (0-100) 22 Extent of disclosure index (0-10) 2 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 3 Closing a business (rank) 153 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 4 Time (years) 5.7 Rigidity of employment index (0-100) 21 Strength of investor protection index (0-10) 3.0 Cost (% of estate) 30 Firing cost (weeks of salary) 17 Recovery rate (cents on the dollar) 2.7 Paying taxes (rank) 91 Payments (number per year) 42 Time (hours per year) 160 Total tax rate (% of profit) 40.1 honduras Latin America & Caribbean GNI per capita (US$) 1,600 Ease of doing business (rank) 133 Lower middle income Population (m) 7.1 Starting a business (rank) 146 Registering property (rank) 90 Trading across borders (rank) 107 Procedures (number) 13 Procedures (number) 7 Documents to export (number) 7 Time (days) 20 Time (days) 23 Time to export (days) 20 Cost (% of income per capita) 52.6 Cost (% of property value) 5.6 Cost to export (US$ per container) 1,163 Minimum capital (% of income per capita) 20.0 Documents to import (number) 10 Getting credit (rank) 28 Time to import (days) 23 Dealing with construction permits (rank) 71 Strength of legal rights index (0-10) 6 Cost to import (US$ per container) 1,190 Procedures (number) 17 Depth of credit information index (0-6) 6 Time (days) 125 Public registry coverage (% of adults) 11.3 Enforcing contracts (rank) 176 Cost (% of income per capita) 464.6 Private bureau coverage (% of adults) 60.5 Procedures (number) 45 Time (days) 900 Employing workers (rank) 156 Protecting investors (rank) 150 Cost (% of claim) 35.2 Difficulty of hiring index (0-100) 89 Extent of disclosure index (0-10) 1 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 5 Closing a business (rank) 115 Difficulty of firing index (0-100) 50 Ease of shareholder suits index (0-10) 4 Time (years) 3.8 Rigidity of employment index (0-100) 53 Strength of investor protection index (0-10) 3.3 Cost (% of estate) 15 Firing cost (weeks of salary) 74 Recovery rate (cents on the dollar) 20.8 Paying taxes (rank) 137 Payments (number per year) 47 Time (hours per year) 224 Total tax rate (% of profit) 49.3 counTRy TABles 109 hong kong, China East Asia & Pacific GNI per capita (US$) 31,610 Ease of doing business (rank) 4 High income Population (m) 6.9 Starting a business (rank) 15 Registering property (rank) 74 Trading across borders (rank) 2 Procedures (number) 5 Procedures (number) 5 Documents to export (number) 4 Time (days) 11 Time (days) 54 Time to export (days) 6 Cost (% of income per capita) 2.0 Cost (% of property value) 5.0 Cost to export (US$ per container) 625 Minimum capital (% of income per capita) 0.0 Documents to import (number) 4 Getting credit (rank) 2 Time to import (days) 5 Dealing with construction permits (rank) 20 Strength of legal rights index (0-10) 10 Cost to import (US$ per container) 633 Procedures (number) 15 Depth of credit information index (0-6) 5 Time (days) 119 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 1 Cost (% of income per capita) 18.7 Private bureau coverage (% of adults) 69.9 Procedures (number) 24 Time (days) 211 Employing workers (rank) 20 Protecting investors (rank) 3 Cost (% of claim) 14.5 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 10 Rigidity of hours index (0-100) 0 Extent of director liability index (0-10) 8 Closing a business (rank) 13 Difficulty of firing index (0-100) 0 Ease of shareholder suits index (0-10) 9 Time (years) 1.1 Rigidity of employment index (0-100) 0 Strength of investor protection index (0-10) 9.0 Cost (% of estate) 9 Firing cost (weeks of salary) 62 Recovery rate (cents on the dollar) 79.8 Paying taxes (rank) 3 Payments (number per year) 4 Time (hours per year) 80 Total tax rate (% of profit) 24.2 hungary OECD: High Income GNI per capita (US$) 11,570 Ease of doing business (rank) 41 High income Population (m) 10.1 Starting a business (rank) 27 Registering property (rank) 57 Trading across borders (rank) 68 Procedures (number) 4 Procedures (number) 4 Documents to export (number) 5 Time (days) 5 Time (days) 17 Time to export (days) 18 Cost (% of income per capita) 8.4 Cost (% of property value) 11.0 Cost to export (US$ per container) 1,300 Minimum capital (% of income per capita) 10.8 Documents to import (number) 7 Getting credit (rank) 28 Time to import (days) 17 Dealing with construction permits (rank) 89 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 1,290 Procedures (number) 31 Depth of credit information index (0-6) 5 Time (days) 204 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 12 Cost (% of income per capita) 10.3 Private bureau coverage (% of adults) 10.0 Procedures (number) 33 Time (days) 335 Employing workers (rank) 84 Protecting investors (rank) 113 Cost (% of claim) 13.0 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 2 Rigidity of hours index (0-100) 80 Extent of director liability index (0-10) 4 Closing a business (rank) 55 Difficulty of firing index (0-100) 10 Ease of shareholder suits index (0-10) 7 Time (years) 2.0 Rigidity of employment index (0-100) 30 Strength of investor protection index (0-10) 4.3 Cost (% of estate) 15 Firing cost (weeks of salary) 35 Recovery rate (cents on the dollar) 38.4 Paying taxes (rank) 111 Payments (number per year) 14 Time (hours per year) 330 Total tax rate (% of profit) 57.5 iCeLand OECD: High Income GNI per capita (US$) 54,100 Ease of doing business (rank) 11 High income Population (m) 0.3 Starting a business (rank) 17 Registering property (rank) 15 Trading across borders (rank) 34 Procedures (number) 5 Procedures (number) 3 Documents to export (number) 5 Time (days) 5 Time (days) 4 Time to export (days) 15 Cost (% of income per capita) 2.6 Cost (% of property value) 2.4 Cost to export (US$ per container) 1,109 Minimum capital (% of income per capita) 13.6 Documents to import (number) 5 Getting credit (rank) 28 Time to import (days) 14 Dealing with construction permits (rank) 28 Strength of legal rights index (0-10) 7 Cost to import (US$ per container) 1,183 Procedures (number) 18 Depth of credit information index (0-6) 5 Time (days) 75 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 3 Cost (% of income per capita) 19.2 Private bureau coverage (% of adults) 100.0 Procedures (number) 26 Time (days) 393 Employing workers (rank) 62 Protecting investors (rank) 70 Cost (% of claim) 6.2 Difficulty of hiring index (0-100) 44 Extent of disclosure index (0-10) 5 Rigidity of hours index (0-100) 40 Extent of director liability index (0-10) 5 Closing a business (rank) 16 Difficulty of firing index (0-100) 10 Ease of shareholder suits index (0-10) 6 Time (years) 1.0 Rigidity of employment index (0-100) 31 Strength of investor protection index (0-10) 5.3 Cost (% of estate) 4 Firing cost (weeks of salary) 13 Recovery rate (cents on the dollar) 76.6 Paying taxes (rank) 32 Payments (number per year) 31 Time (hours per year) 140 Total tax rate (% of profit) 26.8 110 Doing Business 2009 india South Asia GNI per capita (US$) 950 Ease of doing business (rank) 122 Lower middle income Population (m) 1,123.3 Starting a business (rank) 121 Registering property (rank) 105 Trading across borders (rank) 90 Procedures (number) 13 Procedures (number) 6 Documents to export (number) 8 Time (days) 30 Time (days) 45 Time to export (days) 17 Cost (% of income per capita) 70.1 Cost (% of property value) 7.5 Cost to export (US$ per container) 945 Minimum capital (% of income per capita) 0.0 Documents to import (number) 9 Getting credit (rank) 28 Time to import (days) 20 Dealing with construction permits (rank) 136 Strength of legal rights index (0-10) 8 Cost to import (US$ per container) 960 Procedures (number) 20 Depth of credit information index (0-6) 4 Time (days) 224 Public registry coverage (% of adults) 0.0 Enforcing contracts (rank) 180 Cost (% of income per capita) 414.7 Private bureau coverage (% of adults) 10.5 Procedures (number) 46 Time (days) 1,420 Employing workers (rank) 89 Protecting investors (rank) 38 Cost (% of claim) 39.6 Difficulty of hiring index (0-100) 0 Extent of disclosure index (0-10) 7 Rigidity of hours index (0-100) 20 Extent of director liability index (0-10) 4 Closing a business (rank) 140 Difficulty of firing index (0-100) 70 Ease of shareholder suits index (0-10) 7 Time (years) 10.0 Rigidity of employment index (0-100) 30 Strength of investor protection index (0-10) 6.0 Cost (% of estate) 9 Firing cost (weeks of salary) 56 Recovery rate (cents on the dollar) 10.4 Paying taxes (rank) 169 Payments (number per year) 60 Time (hours per year) 271 Total tax rate (% of profit) 71.5 indonesia East Asia & Pacific GNI per capita (US$) 1,650 Ease of doing business (rank) 129 Lower middle income Population (m) 225.6 Starting a business (rank) 171 Registering property (rank) 107 Trading across borders (rank) 37 Procedures (number) 11 Procedures (number) 6 Documents to export (number) 5 Time (days) 76 Time (days) 39 Time to export (days) 21 Cost (% of income per capita) 77.9 Cost (% of property value) 10.7 Cost to export (US$ per container) 704 Minimum capital (% of income per capita)