Doing Business 2018 Serbia Economy Pro le of Serbia Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Serbia Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Serbia Income Category Upper middle income 43 Population 7,057,412 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 5,280 0 100 73.13 City Covered Belgrade DB 2018 Distance to Frontier (DTF) 0 100 73.13: Serbia (Rank: 43) 72.39: Hungary (Rank: 48) 71.91: Bulgaria (Rank: 50) 71.70: Croatia (Rank: 51) 71.33: Regional Average (Europe & Central Asia) Page 3   68.02: Greece (Rank: 67) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Serbia Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Serbia Income Category Upper middle income 43 Population 7,057,412 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 5,280 0 100 73.13 City Covered Belgrade DB 2018 Distance to Frontier (DTF) 0 100 73.13: Serbia (Rank: 43) 72.39: Hungary (Rank: 48) 71.91: Bulgaria (Rank: 50) 71.70: Croatia (Rank: 51) 71.33: Regional Average (Europe & Central Asia) 68.02: Greece (Rank: 67) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Serbia 1 10 23 32 28 48 57 55 60 55 76 82 82 96 Rank 109 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Serbia 100 96.64 92.57 82.38 80 72.59 73.63 69.97 65.00 61.41 60.49 60 56.67 DTF 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.04 Change:+0.86 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:+0.83 Change:+0.77 Permits Change:0.00 Change:0.00 Change:+0.13 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.04 Change:+0.86 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:+0.83 Change:+0.77 Permits Change:0.00 Change:0.00 Doing Business 2018 Serbia Change:+0.13 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Serbia Standardized Company Legal form Društvo sa ograničenom odgovornošću (DOO) - Limited Liability Company Paid-in minimum capital requirement RSD 0 City Covered Belgrade Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Procedure – Men (number) 5 5.2 4.9 1.00 (New Zealand) Time – Men (days) 5.5 10.1 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 2.3 4.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 5 5.2 4.9 1.00 (New Zealand) Time – Women (days) 5.5 10.1 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 2.3 4.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 3.4 8.7 0.00 (113 Economies) Figure – Starting a Business in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.57: Serbia (Rank: 32) 92.30: Greece (Rank: 37) 90.62: Regional Average (Europe & Central Asia) 87.60: Hungary (Rank: 79) 86.39: Croatia (Rank: 87) 85.37: Bulgaria (Rank: 95) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Serbia – Procedure, Time and Cost Time Cost 1.2 5 1 ost (% of income per capita) 4 0.8 Time (days) 3 0.6 2 0.4 Page 6   starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Serbia Figure – Starting a Business in Serbia – Procedure, Time and Cost Time Cost 1.2 5 1 Cost (% of income per capita) 4 0.8 Time (days) 3 0.6 2 0.4 1 0.2 0 0 1 2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Serbia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Notarize the memorandum of association at the Basic Court, at the 1 day RSD 300 per Municipality or Public Notary signature per copy Agency : Public Notary The founders shall notarize 3 copies of agreement on foundation of the company before the Public Notary and provide Serbian Business Registers Agency (hereinafter the "SBRA") with one notarized copy, among other documents, according to the Article 10 of the new Rulebook on the Contents of the Register of Business Entities and the Documentation Needed for Registration (“The O cial Gazette of the Republic of Serbia”, no. 6/2012). The notary fees are regulated by the Tari for Public Notaries (Javnobeležnička tarifa, "O cial Gazette of RS", No. 91/2014, 103/2014, 138/2014, 12/2016, and 17/2017), which provides for a "points"-based amount of the fees. According to Art. 10, the value of one point is RSD 150 without VAT. According to Tari 8 of the Art. 21, the notary fee for veri cation of signatures on a private document by which the notary con rms that the parties in the legal transaction or the parties which make a legal statement personally signed or personally placed a ngerprint, is 2 points per signature and per copy of a notary document. Therefore, notary fee for certi cation of one signature on the MoA is RSD 300 (i.e., 2 points * 150 RSD/per point) without VAT. Provided that it is assumed that 5 founders are creating an LLC, the applicable fee for the case study company is RSD 1,500 (i.e., RSD 300 * 5 signatures) per copy. Page 7   Two additional copies of the MoA need to be certi ed. This can be done by (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Serbia Details – Starting a Business in Serbia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Notarize the memorandum of association at the Basic Court, at the 1 day RSD 300 per Municipality or Public Notary signature per copy Agency : Public Notary The founders shall notarize 3 copies of agreement on foundation of the company before the Public Notary and provide Serbian Business Registers Agency (hereinafter the "SBRA") with one notarized copy, among other documents, according to the Article 10 of the new Rulebook on the Contents of the Register of Business Entities and the Documentation Needed for Registration (“The O cial Gazette of the Republic of Serbia”, no. 6/2012). The notary fees are regulated by the Tari for Public Notaries (Javnobeležnička tarifa, "O cial Gazette of RS", No. 91/2014, 103/2014, 138/2014, 12/2016, and 17/2017), which provides for a "points"-based amount of the fees. According to Art. 10, the value of one point is RSD 150 without VAT. According to Tari 8 of the Art. 21, the notary fee for veri cation of signatures on a private document by which the notary con rms that the parties in the legal transaction or the parties which make a legal statement personally signed or personally placed a ngerprint, is 2 points per signature and per copy of a notary document. Therefore, notary fee for certi cation of one signature on the MoA is RSD 300 (i.e., 2 points * 150 RSD/per point) without VAT. Provided that it is assumed that 5 founders are creating an LLC, the applicable fee for the case study company is RSD 1,500 (i.e., RSD 300 * 5 signatures) per copy. Two additional copies of the MoA need to be certi ed. This can be done by either "original" certi cation (i.e., RSD 300 per signature per copy), or by certifying the copy of the original MoA, which is done at the rate of 2 points (i.e., RSD 300 without VAT, based on the Tari 10 of the Art. 21) per page. 2 Open a bank account and pay registration fees 1 day RSD 4,900 Agency : Bank (administrative fee for foundation of a The registration fees must be paid at a commercial bank. The proof of limited liability payment is required at the moment of registration with the Serbian Business company) + RSD Registration Agency. 1,000 (fee for registration and The Company Law does not provide for the minimum amount of the company's initial capital that needs to be paid-in until the company's publication of the registration with the SBRA. However, in case the Foundation Act prescribes Incorporation Act) that the relevant amount of the capital contribution is going to be paid until the company's registration, the temporary bank account should be opened with the commercial bank. Otherwise, once the company is registered with the SBRA, the capital contribution will be paid-in directly to the company's permanent bank account. Once the company is registered with the SBRA, the permanent bank account should be opened with the commercial bank. In case the temporary bank account was opened before the company's registration with the SBRA, the funds will be transferred to the permanent bank account. Page 8   (i.e., RSD 300 without VAT, based on the Tari 10 of the Art. 21) per page. Doing Business 2018 Serbia 2 Open a bank account and pay registration fees 1 day RSD 4,900 Agency : Bank (administrative fee for foundation of a The registration fees must be paid at a commercial bank. The proof of limited liability payment is required at the moment of registration with the Serbian Business company) + RSD Registration Agency. 1,000 (fee for registration and The Company Law does not provide for the minimum amount of the company's initial capital that needs to be paid-in until the company's publication of the registration with the SBRA. However, in case the Foundation Act prescribes Incorporation Act) that the relevant amount of the capital contribution is going to be paid until the company's registration, the temporary bank account should be opened with the commercial bank. Otherwise, once the company is registered with the SBRA, the capital contribution will be paid-in directly to the company's permanent bank account. Once the company is registered with the SBRA, the permanent bank account should be opened with the commercial bank. In case the temporary bank account was opened before the company's registration with the SBRA, the funds will be transferred to the permanent bank account. Otherwise, once the company is registered with the SBRA, the capital contribution will be paid-in directly to the company's permanent bank account. In order to open the permanent bank account, the bank is generally provided with the following documents: • Request for opening of the permanent bank account (original); • Specimen signatures card (original); • Contract on opening and maintaining of a RSD/foreign currency account (original); • The company’s excerpt from the SBRA, not older than three months (original or certi ed copy); • Certi cate on the tax identi cation number, issued by the Tax Authority (copy); • Certi ed signatures of the persons authorized to dispose with the funds (original or certi ed copy); and • Passport or ID card of the persons authorized to dispose with the funds (copy). In case an authorized person opens the permanent bank account, on behalf of the company, the bank should also be provided with (i) a Power of Attorney (original or certi ed copy), and (i) a copy of passport or ID card of the authorized person. The Law on Prevention of Money Laundering and Financing of Terrorism (Zakon o sprečavanju pranja novca i nansiranja terorizma, "O cial Gazette of the Republic of Serbia", Nos. 20/2009, 72/2009, 91/2010 and 139/2014) provides that in order to open the permanent bank account, the bank must verify the company’s ownership structure. Therefore, the bank must be provided with the registry excerpt for each legal entity in the company’s ownership chain, holding directly or indirectly 25% or more of the ownership interest. This procedure shall be repeatedly carried out down to the ultimate owners, i.e. private individuals who hold directly or indirectly 25% or more of the ownership interest. 3 Apply and obtain the registration certi cate, tax identi cation number, 2 days no charge pension fund (PIO Fund)and Health Fund certi cates, certify the Page 9   signatures (three copies) for opening bank account owners, i.e. private individuals who hold directly or indirectly 25% or more of the ownership interest. Doing Business 2018 Serbia 3 Apply and obtain the registration certi cate, tax identi cation number, 2 days no charge pension fund (PIO Fund)and Health Fund certi cates, certify the signatures (three copies) for opening bank account Agency : Serbian Business Registers Agency (SBRA) According to the Rulebook on Issuing of Tax Identi cation Number for Legal Entities, Entrepreneurs and Other Entities Registered with the Business Registers Agency (Pravilnik o dodeli poreskog identi kacionog broja pravnim licima, preduzetnicima i drugim subjektima za čiju je registraciju nadležna Agencija za privredne registre, "O cial Gazette of the Republic of Serbia", no.32/2009, 70/2010, 6/2012 and 11/2016), the Serbian Business Registers Agency provides the company with the certi cate on the tax identi cation number (issued by the Tax Authority) together with the certi cate on registration of the company with the Serbian Business Registers Agency. Legal entities, sole traders and other entities when apply for incorporation with SBRA submit only JRPPS form through which they can simultaneously apply also for at-rate taxation or VAT with Tax authority. Legal entities, sole traders and other entities are no longer required to submit additional documents to the local Tax authority. Upon receiving the required authorization in the application for the company’s registration, the Serbian Business Registers Agency: (i) forwards to the competent Pension and Disability Insurance Fund the application for insurance, on behalf of the founders who state in their application that they will not be employed in the company, and an application for registration of commencement of the company’s business activity; and (ii) forwards to the Republic Health Insurance Fund the necessary data for registration of a payer of health insurance. If the requirements for registration of a payer of health insurance with the Republic Health Insurance Fund are not ful lled, the company will be registered with the Serbian Business Registers Agency and referred to the Republic Health Insurance Fund for the registration as a payer of health insurance. In order to register the company with the SBRA, the following documents need to be submitted: - Application form (can be downloaded free of charge from the o cial web page of the SBRA www.apr.gov.rs); - Foundation Act with certi ed signatures of the company's founders (shareholders); - Proof of identity of the company's founders (if the founder is natural person: for Serbian nationals – photocopy of personal ID card, and for foreign nationals – photocopy of passport; if the founder is legal entity: original extract from the commercial registry); - Decision on Appointment of Representatives (if the representatives are not speci ed in the Foundation Act); Page 10   - Bank con rmation of the payment of the contribution in cash if the - Decision on Appointment of Representatives (if the representatives are not Business Doing speci 2018 ed in the Serbia Foundation Act); - Bank con rmation of the payment of the contribution in cash if the contribution is payable prior to incorporation, i.e., founders’ agreement on the appraisal of the value of contribution in kind if the contribution is made to the company prior to incorporation; - Proof of payment of the registration fee; and - Power of Attorney (if an attorney les the registration). Documents in a foreign language must be accompanied by their translation into Serbian, certi ed by a certi ed court interpreter. Under the Law on Procedure of Registration with the Business Registers Agency (Zakon o postupku registracije u Agenciji za privredne registre, "O cial Gazette of the Republic of Serbia", No. 99/2011), the Serbian Business Registers Agency must issue its decision on registration within 5 ( ve) days from the date of receipt of the application for registration. The company’s registration is published on the o cial web-page of the Serbian Business Registers Agency. 4 Make Stamp and seal 1 day RSD 1,660 - RSD Agency : Sealmaker 2,800 Although use of the stamp is not mandatory under the new Companies Act, a majority of the companies in Serbia are still using the stamps in their business operations in order to have additional level of security in the legal actions. In addition, contrary to the provisions of the new law, some authorities still require the stamps to be a xed on business letters/documents of the companies. 5 Register the employment contracts with the Employment Less than one day no charge Organization/Fund (online procedure) Agency : Employment organization/Fund - Central Registry of Compulsory Social Insurance (CROSO) The new and old forms M1 are replaced by the form M, which includes employee's application for registration with social insurance, health care insurance and insurance against unemployment (application may be downloaded online from the website http://www.pio.rs). Starting from 2014, companies register employees online at www.crosco.gov.rs. Pursuant to the Regulation on Unique Application for Mandatory Social Insurance (Uredba o sadržini, obrascu i načinu podnošenja jedinstvene prijave na obavezno socijalno osiguranje, jedinstvenim metodološkim principima i jedinstvenom kodeksu šifara za unos podataka u jedinstvenu bazu centralnog registra obaveznog socijalnog osiguranja, "O cial Gazette of the Republic of Serbia", Nos. 54/2010 and 124/2012), which is applicable as of 1 October 2010, the company, as an employer, is obligated to submit the following documents for registration of each employee either to the Republic Health Insurance Fund or Pension and Disability Insurance Fund: Page 11   • Unique application form M (which can be downloaded free of charge from authorities still require the stamps to be a xed on business Business 2018 ofSerbia Doing letters/documents the companies. 5 Register the employment contracts with the Employment Less than one day no charge Organization/Fund (online procedure) Agency : Employment organization/Fund - Central Registry of Compulsory Social Insurance (CROSO) The new and old forms M1 are replaced by the form M, which includes employee's application for registration with social insurance, health care insurance and insurance against unemployment (application may be downloaded online from the website http://www.pio.rs). Starting from 2014, companies register employees online at www.crosco.gov.rs. Pursuant to the Regulation on Unique Application for Mandatory Social Insurance (Uredba o sadržini, obrascu i načinu podnošenja jedinstvene prijave na obavezno socijalno osiguranje, jedinstvenim metodološkim principima i jedinstvenom kodeksu šifara za unos podataka u jedinstvenu bazu centralnog registra obaveznog socijalnog osiguranja, "O cial Gazette of the Republic of Serbia", Nos. 54/2010 and 124/2012), which is applicable as of 1 October 2010, the company, as an employer, is obligated to submit the following documents for registration of each employee either to the Republic Health Insurance Fund or Pension and Disability Insurance Fund: • Unique application form M (which can be downloaded free of charge from the o cial web-page of the Republic Health Insurance Fund www.rzzo.rs); • Employment contract; • ID card; and • Old medical care booklet (if applicable). Work booklet is not being issued as of January 01, 2016. Therefore, employees who has been employed before this date have work booklet and can use the same as the evidence of their previous work experience. However, employees who are being employed after January 01, 2016 do not have work booklet. This documents is not necessary for registration of the employment contracts with relevant authority. In addition, under the Law on Employment and Insurance in Case of Unemployment (Zakon o zapošljavanju i osiguranju za slučaj nezaposlenosti, "O cial Gazette of the Republic of Serbia", Nos. 36/2009 and 88/2010), the employer is obligated to submit application on vacancy for working place to the National Employment O ce. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits Page 12   This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Serbia Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 13   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Serbia Standardized Warehouse Estimated value of warehouse RSD 28,059,307.20 City Covered Belgrade Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Procedures (number) 11 16.0 12.5 7.00 (Denmark) Time (days) 110 168.3 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 1.8 4.0 1.6 0.10 (5 Economies) Building quality control index (0-15) 13.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 82.38: Serbia (Rank: 10) 73.35: Bulgaria (Rank: 51) 72.48: Greece (Rank: 58) 68.09: Regional Average (Europe & Central Asia) 67.93: Hungary (Rank: 90) 63.00: Croatia (Rank: 126) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Serbia – Procedure, Time and Cost Time Cost 0.45 100 0.4 Cost (% of warehouse value) 0.35 80 0.3 Time (days) 60 0.25 0.2 40 0.15 0.1 20 0.05 0 0 1 *2 3 4 5 6 7 8 9 10 11 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 14   component indicators. Doing Business 2018 Serbia Figure – Dealing with Construction Permits in Serbia – Procedure, Time and Cost Time Cost 0.45 100 0.4 Cost (% of warehouse value) 0.35 80 0.3 Time (days) 60 0.25 0.2 40 0.15 0.1 20 0.05 0 0 1 *2 3 4 5 6 7 8 9 10 11 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Serbia and comparator economies – Measure of Quality 13.5 13.0 13.0 13.0 13 12.5 Index score 12.0 12.0 12 11.4 11.5 11 10.5 Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Details – Dealing with Construction Permits in Serbia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain location conditions from the Secretariat of Urban 33 days RSD 58,914 Planning and Construction of the City of Belgrade Agency : Secretariat for Urban Planning and Construction of the City of Belgrade BuildCo applies for the Location conditions through the ePermit system to the City of Belgrade Secretariat for Urban Planning and Construction. The concept design/plan and proof of payment of administrative fees must also be attached. The Municipal One Stop Shop is required to obtain copies of the plan of the parcel and its installations from the Republic Geodetic Authority, check the Page 15   size of the parcel on the web site of the Republic Geodetic Authority, check Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Doing Business 2018 Serbia Details – Dealing with Construction Permits in Serbia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain location conditions from the Secretariat of Urban 33 days RSD 58,914 Planning and Construction of the City of Belgrade Agency : Secretariat for Urban Planning and Construction of the City of Belgrade BuildCo applies for the Location conditions through the ePermit system to the City of Belgrade Secretariat for Urban Planning and Construction. The concept design/plan and proof of payment of administrative fees must also be attached. The Municipal One Stop Shop is required to obtain copies of the plan of the parcel and its installations from the Republic Geodetic Authority, check the size of the parcel on the web site of the Republic Geodetic Authority, check the zoning requirements for the parcel and obtain all system operators' (waterworks, sewerage, power company) technical conditions for the project. After checking the zoning requirements, and based on the documentation obtained from the Republic Geodetic Authority and system operators' technical conditions, the permitting authority issues the Location Conditions as an eDocument and makes it publicly available at the City of Belgrade website. 2 Obtain a topographical survey of the land 13 days RSD 108,129 Agency : Private Geodetic agency According to Art. 47 of the Rulebook on mandatory content of the project design, a topographical survey is needed for the development of the concept design - Idejni projekat - and must be done by a certi ed surveying agency (Art. 56 of the Rulebook). This topographical survey can be done while obtaining the location conditions from the secretariat of Urban Planning and construction. 3 Request and obtain technical control of the main project 10 days RSD 92,071 Agency : Licensed Company A duly licensed company other than the one that designed the main building plans must verify whether the main construction project is in accordance with the law and with the technical standards, and whether it has all necessary clearances described in the previous procedures. The main construction project must be certi ed and stamped to that e ect. 4 Request and obtain building permit 11 days RSD 5,500 Agency : Secretariat for Urban Planning and Construction of the City of Belgrade The new Rulebook on Electronic One Stop Shops, implemented in December 2015 made it mandatory to request a building permit online through the epermitting system. The following documents must be provided: • building permit plan (project design), • technical control of the building permit plan by a licenses engineer • proofs of payment of administrative fees for the eSystem • Payment for the City of Belgrade for lling and processing a request The permitting authority checks the building permit plan with the zoning requirements and previously issued Location Conditions. There is are no Page 16   necessary clearances described in the previous procedures. The main Doing construction project must Business 2018 be certi ed and stamped to that e ect. Serbia 4 Request and obtain building permit 11 days RSD 5,500 Agency : Secretariat for Urban Planning and Construction of the City of Belgrade The new Rulebook on Electronic One Stop Shops, implemented in December 2015 made it mandatory to request a building permit online through the epermitting system. The following documents must be provided: • building permit plan (project design), • technical control of the building permit plan by a licenses engineer • proofs of payment of administrative fees for the eSystem • Payment for the City of Belgrade for lling and processing a request The permitting authority checks the building permit plan with the zoning requirements and previously issued Location Conditions. There is are no issues, the building plan will request the proof of ownership via the ePermits system 5 Notify the Ministry of Labor of commencement of works 1 day no charge Agency : Ministry of Labor According to Article 18 of the Law on workplace safety and health , BuildCo must notify the Ministry of Labor of the commencement of work in person. This noti cation is done prior to start of construction work. 6 Notify and obtain approval for commencement of works from the 1 day RSD 1,100 Secretariat for Urbanism and Construction A airs Agency : Secretariat for Urban Planning and Construction of the City of Belgrade The start of construction activities must be reported to the Municipality at least 8 days before commencement. The noti cation must be accompanied by all necessary documentation described in the previous procedures, including the main construction project design and description of the equipment to be used which must be certi ed by the municipality within 8 days of submission. After this certi cation has been obtained, construction may commence. It is also processed through the ePermit system. 7 Notify about the completion of foundation works and request 7 days RSD 800 inspection Agency : Secretariat for Urban Planning and Construction of the City of Belgrade According to Article 152 of the Law on Construction and Planning, BuildCo must notify the Secretariat for Urbanism and Construction A airs of the City of Belgrade (competent authority) about the completion of foundation works. The Secretariat shall, within three days of the receipt of the noti cation, notify the Inspection Authority, which has to conduct the inspection within 3 business days. 8 Receive inspection of foundation works 1 day no charge Agency : The Secretariat for Inspection of the City of Belgrade - Department for Construction and Urban Planning Inspection 9 Request and obtain water and sewerage connection 18 days RSD 111,929 Agency : JP Vodovod-Kanalizacija d.o.o 10 Hire an external engineer to conduct the nal inspection 1 day RSD 40,000 Agency : Certi ed Independent rm Page 17   Prior to the new law from 2015, this inspection was conducted by the 9 Request and obtain water and sewerage connection 18 days RSD 111,929 Agency : JP Vodovod-Kanalizacija d.o.o Doing Business 2018 Serbia 10 Hire an external engineer to conduct the nal inspection 1 day RSD 40,000 Agency : Certi ed Independent rm Prior to the new law from 2015, this inspection was conducted by the Municipality. Now it is conducted by an independent expert. After the inspection, the expert writes the recommendations to the Municipality and based on those recommendations, the Municipality will issue the usage permit. 11 Obtain usage permit and register the building with the Geodetic 27 days RSD 83,219 Authority Agency : Secretariat for Urban Planning and Construction of the City of Belgrade BuildCo must submit a formal request along with the building and the usage permit to register the building at the Republic Geodesy Institute. Article 125 of the Law on Planning and Construction provides for a time limit of 7 days for this permit to be issued following the issuance of technical examination. However, there is no time-limit for the Commission to perform the technical examination. In practice, it may take up to 6 months for the Commission to convene and issue its decision. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Serbia – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 1.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 0.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer; Private rm. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections at 1.0 construction? (0-2) various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Page 18   Takes place simultaneously with previous procedure. Doing Business 2018 Serbia Details – Dealing with Construction Permits in Serbia – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 1.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 0.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer; Private rm. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections at 1.0 construction? (0-2) various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, external engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 2.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction Page 19   company. Liability Doing 2018 regimes and insurance Business index (0-2) Serbia 2.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover Architect or 1.0 possible structural aws or problems in the building once it is in use (Latent Defect engineer; Liability Insurance or Decennial Insurance)? (0-1) Professional in charge of the supervision; Construction company. Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certi cation exam. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certi cation exam. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 20   certi cation exam. Doing Business 2018 Serbia Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 21   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Serbia Standardized Connection Price of electricity (US cents per kWh) 6.6 Name of utility Elektroprivreda Srbije (EPS): Elektrodistribucija Beograd plc City Covered Belgrade Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Procedures (number) 5 5.4 4.7 2 (United Arab Emirates) Time (days) 125 113.7 79.1 10 (United Arab Emirates) Cost (% of income per capita) 223.5 344.3 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 5 5.3 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.26: Croatia (Rank: 75) 75.97: Greece (Rank: 76) 70.35: Regional Average (Europe & Central Asia) 69.97: Serbia (Rank: 96) 63.26: Hungary (Rank: 110) 54.80: Bulgaria (Rank: 141) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Serbia – Procedure, Time and Cost Time Cost 250 120 100 200 Cost (% of income per capita) 80 Time (days) 150 60 100 40 50 20 Page 22   getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Serbia Figure – Getting Electricity in Serbia – Procedure, Time and Cost Time Cost 250 120 100 200 Cost (% of income per capita) 80 Time (days) 150 60 100 40 50 20 0 0 1 2 *3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Serbia and comparator economies – Measure of Quality 8 7 7 7 6 6 5.3 5 5 Index score 5 4 3 2 1 0 Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Details – Getting Electricity in Serbia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to One Stop Shop (OSS) for location conditions 28 calendar days RSD 1,254,418.7 Agency : One Stop Shop 1) Investor submits application for location conditions via online ePermits system to the One Stop Shop (OSS). The application has to be digitally signed. Documents to be attached are the urban plan or planned object that is approved by the city’s Secretary for Urban Planning (“Gradski sekretarijat za urbanizam”). This is the building permit before the warehouse is built. A prove of ownership/renting over the land under the future object has to be attached as well. 2) OSS sends request for conditions for project design and connection to the EPS Distribucija (EPSD) Page 23   3) EPSD prepares conditions for project design and connection, including the Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Doing Business 2018 Serbia Details – Getting Electricity in Serbia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to One Stop Shop (OSS) for location conditions 28 calendar days RSD 1,254,418.7 Agency : One Stop Shop 1) Investor submits application for location conditions via online ePermits system to the One Stop Shop (OSS). The application has to be digitally signed. Documents to be attached are the urban plan or planned object that is approved by the city’s Secretary for Urban Planning (“Gradski sekretarijat za urbanizam”). This is the building permit before the warehouse is built. A prove of ownership/renting over the land under the future object has to be attached as well. 2) OSS sends request for conditions for project design and connection to the EPS Distribucija (EPSD) 3) EPSD prepares conditions for project design and connection, including the connection fee, and send the to the OSS 4) OSS provides EPSD's conditions for project design and connection to investor as a part of the location conditions 5) Investor pays for external works by EPSD (electronic payments are prevailing practice) 2 Await completion of external works by EPSD 89 calendar days RSD 0 Agency : EPS Distribucija" d.o.o. Beograd (EPSD) 1) EPSD prepares technical design for external works 2) EPSD obtains permit for external works 3) EPSD obtains permit for excavations 4) EPSD completes external works, performs technical control of the external works and issues certi cate on readiness of the completed external works for connection The utility is obtaining all necessary approvals for the customer. 3 Receive internal inspection by EPSD 4 calendar days RSD 0 Agency : EPS Distribucija" d.o.o. Beograd (EPSD) An internal inspection of the wiring might be required depending on the object’s volume and technical solution. An inspection would be done before the connection to the public electrical power distribution network. The inspection can be requested after making the internal installation and before the connection. Someone from the customer’s party has to be present. The inspection is done by the utility. A proof of the safety of the internal wiring needs to be submitted to the utility for every new connection. 4 Sign contract with power supply company 1 calendar day RSD 0 Agency : Public or Private power supply company In order to nish nal connection to the electric network, investor needs to sign contract with some power supply company (public or private). This procedure is not simultaneous with previous one (it cannot be started until the previous one is nished). 5 Receive meter installation and await nal connection 7 calendar days USD 0 Agency : One Stop Shop 1) Investor submits request for connection to the OSS through the ePermits Page 24   system until the previous one is nished). Doing Business 2018 Serbia 5 Receive meter installation and await nal connection 7 calendar days USD 0 Agency : One Stop Shop 1) Investor submits request for connection to the OSS through the ePermits system 2) OSS submits the connection request to the EPSD 3) EPSD performs control of the connection point 4) EPSD issues approval for connection on the grid 5) EPSD completes the connection 6) EPSD sends noti cation to the OSS on completed connection Takes place simultaneously with previous procedure. Details – Getting Electricity in Serbia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 1 System average interruption duration index (SAIDI) 4.0 System average interruption frequency index (SAIFI) 3.5 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.eps- snabdevanje.rs/regu lativa/Pages/Tarifni- sistem.aspx Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. Page 25   Takes place simultaneously with previous procedure. Doing Business 2018 Serbia Details – Getting Electricity in Serbia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 1 System average interruption duration index (SAIDI) 4.0 System average interruption frequency index (SAIFI) 3.5 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.eps- snabdevanje.rs/regu lativa/Pages/Tarifni- sistem.aspx Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 26   If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Serbia Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value RSD 28,059,307.20 City Covered Belgrade Page 27   Europe & OECD high Doing Business 2018 Serbia Standard Property Transfer Property value RSD 28,059,307.20 City Covered Belgrade Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Procedures (number) 6 5.3 4.6 1.00 (4 Economies) Time (days) 21 20.4 22.3 1.00 (3 Economies) Cost (% of property value) 2.8 2.5 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 18.0 19.8 22.7 29.00 (Singapore) Figure – Registering Property in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.09: Hungary (Rank: 29) 76.02: Regional Average (Europe & Central Asia) 72.59: Serbia (Rank: 57) 71.44: Croatia (Rank: 59) 69.30: Bulgaria (Rank: 67) 49.67: Greece (Rank: 145) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Serbia – Procedure, Time and Cost Time Cost 3 20 2.5 Cost (% of property value) 15 2 Time (days) 1.5 10 1 5 0.5 0 0 1 2 3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 28   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Serbia Figure – Registering Property in Serbia – Procedure, Time and Cost Time Cost 3 20 2.5 Cost (% of property value) 15 2 Time (days) 1.5 10 1 5 0.5 0 0 1 2 3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Serbia and comparator economies – Measure of Quality 30 26.0 25 22.5 19.0 19.8 20 18.0 Index score 15 10 4.5 5 0 Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Details – Registering Property in Serbia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain the extract from the Commercial Registers Agency 1 day RSD 3400 Agency : Commercial Registers Agency The cost consists of RSD 1,700 per extract. Considering the transaction involves two companies, they each must obtain the extract from the Commercial Registers Agency con rming that the persons signing the contract are authorized to sign on behalf of the companies. Although the new Notarial Rules of Procedure adopted on June 26, 2016, allow the status of a legal representative to be determined either by insight into public records (register of the Serbian Business Registers Agency (SBRA), birth registers, real estate cadastre, etc.) or by examining submitted public Page 29   documents that o er proof of existence of a relationship with a participant, Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Doing Business 2018 Serbia Details – Registering Property in Serbia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain the extract from the Commercial Registers Agency 1 day RSD 3400 Agency : Commercial Registers Agency The cost consists of RSD 1,700 per extract. Considering the transaction involves two companies, they each must obtain the extract from the Commercial Registers Agency con rming that the persons signing the contract are authorized to sign on behalf of the companies. Although the new Notarial Rules of Procedure adopted on June 26, 2016, allow the status of a legal representative to be determined either by insight into public records (register of the Serbian Business Registers Agency (SBRA), birth registers, real estate cadastre, etc.) or by examining submitted public documents that o er proof of existence of a relationship with a participant, from which the authority to represent the company is derived, in practice, public notaries still require company excerpt from the SBRA to be presented prior to notarization of sale and purchase agreement. 2 Prepare the sale contract and colemnize it 1 day Agency : Notary Real estate price range Notary Fee In 2016 the notary fees were updated by the Notary Public Tari (“O cial (RSD) Notary Fee Gazette of RS” no. 91/2014, 103/2014, 138/2014 and 12/2016), which entered (EUR) into force on February 20, 2016. Please note that all the fees given in the 1,00 - 600.000,00 RSD attached table do not include value added tax (20%) which is paid besides 9.000,00 RSD 73,39 the amount of the respective notary fees. EUR There is no more possibility to draft the sale purchase agreement as a (0,01 – 4.892,77 EUR) Notary Public deed. Only the form of Notarial certi cation (of signatures) is 600.001,00 - available, pursuant to amendments to the Law on Public Notary. 2.500.000,00 RSD 15.000,00 RSD 122,32 EUR (4.892,78 – 20.386,53 EUR) 2.500.001,00 - 5.000.000,00 RSD 21.000,00 RSD 171,27 EUR (20.386,54 – 40.773,06 EUR) 5.000.001,00 - 7.000.000,00 RSD 30.000,00 RSD 244,64 EUR (40.773,06 – 57.082,28 EUR) 7.000.001,00 - 10.000.000,00 RSD 36.000,00 RSD 293,57 EUR (57,082.29 – 81,546.11 EUR) 10.000.001,00 - Page 30   14.000.000,00 RSD public notaries still require company excerpt from the SBRA to be presented Doing prior 2018 of to notarization Business sale and purchase agreement. Serbia 2 Prepare the sale contract and colemnize it 1 day Agency : Notary Real estate price range Notary Fee In 2016 the notary fees were updated by the Notary Public Tari (“O cial (RSD) Notary Fee Gazette of RS” no. 91/2014, 103/2014, 138/2014 and 12/2016), which entered (EUR) into force on February 20, 2016. Please note that all the fees given in the 1,00 - 600.000,00 RSD attached table do not include value added tax (20%) which is paid besides 9.000,00 RSD 73,39 the amount of the respective notary fees. EUR There is no more possibility to draft the sale purchase agreement as a (0,01 – 4.892,77 EUR) Notary Public deed. Only the form of Notarial certi cation (of signatures) is 600.001,00 - available, pursuant to amendments to the Law on Public Notary. 2.500.000,00 RSD 15.000,00 RSD 122,32 EUR (4.892,78 – 20.386,53 EUR) 2.500.001,00 - 5.000.000,00 RSD 21.000,00 RSD 171,27 EUR (20.386,54 – 40.773,06 EUR) 5.000.001,00 - 7.000.000,00 RSD 30.000,00 RSD 244,64 EUR (40.773,06 – 57.082,28 EUR) 7.000.001,00 - 10.000.000,00 RSD 36.000,00 RSD 293,57 EUR (57,082.29 – 81,546.11 EUR) 10.000.001,00 - 14.000.000,00 RSD 42.000,00 RSD 342,49 EUR (81,546.11 – 114.164.56 EUR) 3 Submit the request for registration to the Republic Geodesy Institute 1 day RSD 5000 Agency : Republic Geodetic Authority (RGA) The registration request should be submitted to the competent Cadastre. The Cadastre provides a uni ed system for registration of real property and is maintained by an administrative body: the Republic Geodetic Authority (RGA). All fees charged by the RGA are provided in its "Rulebook on Fees for Services of the Republic Geodetic Authority" and expressed in RSD. An online platform for ling the requests to cadastar in electronic form exists: http://www.rgz.gov.rs/zahtevi/Account/LogOn?ReturnUrl=%2fzahtevi. However, vast majority of requests are submitted directly at the competent o ce of real property cadaster. Art. 123 of the Law on State Survey and Cadaster prescribed that (as of 1 March 2016) requests for registration may also be led in electronic form. Page 31   (81,546.11 – Doing Business 2018 Serbia 114.164.56 EUR) 3 Submit the request for registration to the Republic Geodesy Institute 1 day RSD 5000 Agency : Republic Geodetic Authority (RGA) The registration request should be submitted to the competent Cadastre. The Cadastre provides a uni ed system for registration of real property and is maintained by an administrative body: the Republic Geodetic Authority (RGA). All fees charged by the RGA are provided in its "Rulebook on Fees for Services of the Republic Geodetic Authority" and expressed in RSD. An online platform for ling the requests to cadastar in electronic form exists: http://www.rgz.gov.rs/zahtevi/Account/LogOn?ReturnUrl=%2fzahtevi. However, vast majority of requests are submitted directly at the competent o ce of real property cadaster. Art. 123 of the Law on State Survey and Cadaster prescribed that (as of 1 March 2016) requests for registration may also be led in electronic form. However, there were signi cant problems related to RGA's technological capacity (e.g. lack of appropriate computers, other obsolete equipment, etc.) to achieve the transformation within the deadline given, and in that regard we are not aware if such system has been implemented in practice. In accordance to the Rulebook on Fees for Services of the Republic Geodetic Authority (O cial Gazette no. 116/2013, 5/2014, 8/2014, 120/2014, 29/2015, 35/2016 and 110/2016) 4 Submit the application to Tax Authorities for the approval of the 2 days no cost transaction value and for the authorization of the transfer tax payment Agency : Tax Administration According to the amendments to the VAT Law it is now possible for the transferor and the transferee which are registered VAT payers to have the transfer of immovable taxed under VAT instead of Tax on transfer of absolute rights. As such the transfer shall be subjected to the procedure applicable for reporting and payment of VAT. The parties have 10 days after the sale contract has been veri ed by the court to submit this application. The request will be approved in a few days and then the parties have 15 days to pay the transfer tax." 5 Pay the transfer tax 1 day 2.5% of the property Agency : Commercial Bank or Treasury department value estimated by the Tax Authority The tax is paid at a commercial bank into the account of the local Tax authority. This can be done in person or via e-banking. 6 The Cadastre issues the decision on the property title 15 calendar days RSD 660 Agency : Real Estate Cadastre (REC) Amendments to the Act on State Survey and Cadastre (O cial Gazette of the Republic of Serbia nos. 72/2009, 18/2010, 65/2013 and 15/2015) introduced 15 days deadline for the competent Cadastre to render the decision. Takes place simultaneously with previous procedure. Details – Registering Property in Serbia – Measure of Quality Answer Score Page 32   Quality of the land administration index (0-30) 18.0 Takes place simultaneously with previous procedure. Doing Business 2018 Serbia Details – Registering Property in Serbia – Measure of Quality Answer Score Quality of the land administration index (0-30) 18.0 Reliability of infrastructure index (0-8) 5.0 What is the institution in charge of immovable property registration? Republic Geodetic Authority - Service for Cadastre of Immovable Property In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Republic Geodetic Authority - Service for Cadastre of Immovable Property In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 4.0 Who is able to obtain information on land ownership at the agency in charge of Freely accessible 1.0 immovable property registration in the largest business city? by anyone Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://www.rgz.g ov.rs/template1a .asp? PageName=2012 _08_10_01 Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– Page 33   and if so, how? PageName=2012 Doing Business 2018 Serbia _08_10_01 Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: http://www.rgz.g ov.rs/web_preuzi manje_datotetka. asp? LanguageID=1&Fi leID=2063 Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: http://www.rgz.g ov.rs/web_preuzi manje_datotetka. asp?FileID=1793 Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2015: For 2016 in all of Belgrade: 40,766 Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, online 0.5 —and if so, how? Link for online access: http://www.rgz.g ov.rs/web_preuzi manje_datotetka. asp?FileID=2423 Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Page 34   Are all privately held land plots in the economy formally registered at the immovable No 0.0 property Doing registry? Business 2018 Serbia Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 5.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary; Lawyer; Interested Parties. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a The High court of property worth 50 times gross national income (GNI) per capita and located in the the Republic of largest business city, what court would be in charge of the case in the rst instance? Serbia or Commercial court How long does it take on average to obtain a decision from the rst-instance court for Between 1 and 2 2.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy Page 35   laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Serbia Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Strength of legal rights index (0-12) 6 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 6.3 6.6 8.00 (34 Economies) Page 36   Credit registry coverage (% of adults) 0.0 22.2 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Serbia Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Strength of legal rights index (0-12) 6 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 6.3 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 22.2 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 100.0 42.8 63.7 100.00 (23 Economies) Figure – Getting Credit in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: Hungary (Rank: 29) 70.00: Bulgaria (Rank: 42) 65.00: Serbia (Rank: 55) 64.58: Regional Average (Europe & Central Asia) 55.00: Croatia (Rank: 77) 50.00: Greece (Rank: 90) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Serbia and comparator economies 12 10 10 9 8 Index score 6.6 6 6 5 4 3 2 0 Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Details – Legal Rights in Serbia Strength of legal rights index (0-12) 6 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Page 37   Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Doing Business 2018 Serbia Details – Legal Rights in Serbia Strength of legal rights index (0-12) 6 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring No a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and No obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Serbia and comparator economies 8 7 7 6.3 6 6 5 5 Index score 4 2 0 Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Details – Credit Information in Serbia Page 38   0 Serbia Doing Business 2018 SerbiaBulgaria Croatia Greece Hungary Europe & Central Asia Details – Credit Information in Serbia Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - No No 0 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes No 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 6,470,002 0 Number of firms 935,757 0 Total 7,405,759 0 Percentage of adult population 100.0 0.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 39   transactions; Available legal remedies (damages, Percentage of adult population 100.0 0.0 Doing Business 2018 Serbia Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 5 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6.3 6.6 6.4 Page 40   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Serbia Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 5 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6.3 6.6 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 70.00: Bulgaria (Rank: 24) 68.33: Croatia (Rank: 29) 64.31: Regional Average (Europe & Central Asia) 63.33: Greece (Rank: 43) 56.67: Serbia (Rank: 76) 50.00: Hungary (Rank: 108) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Serbia and comparator economies – Measure of Quality Serbia 6 6 4 7 6 5 Bulgaria 9 2 10 5 8 8 Croatia 7 6 5 9 8 6 Greece 8 4 7 7 7 5 Hungary 7 4 2 5 6 6 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Europe & Central Asia 7.4 4.6 7 5.5 7.2 6.8 0 5 10 15 20 25 30 35 40 45 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Serbia – Measure of Quality Answer Score Page 41   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Serbia Details – Protecting Minority Investors in Serbia – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 5 Extent of disclosure index (0-10) 4 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Existence of a 1.0 con ict without any speci cs Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 1.0 the transaction only Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- No disclosure 0.0 2) obligation Extent of director liability index (0-10) 6 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 5 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 1.0 the defendant relied on Page 42   Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction Doing 2018 (0-1) documents? Business Serbia Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 1.0 the defendant relied on Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) No 0.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 6.3 Extent of shareholder rights index (0-10) 6 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a No 0.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 7 Is it forbidden to appoint the same individual as CEO and chair of the board of Yes 1.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Page 43   Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board Doing members? Business 2018 Serbia Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 6 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and No 0.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Page 44   Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Doing Business 2018 Serbia Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Payments (number per year) 33 16.5 10.9 3 (Hong Kong SAR, China) Page 45   return, but within the tax assessment period. Doing Business 2018 Serbia Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Payments (number per year) 33 16.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 225.5 218.4 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 39.7 33.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 91.09 65.20 83.45 99.38 (Estonia) Figure – Paying Taxes in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.97: Greece (Rank: 65) 75.78: Regional Average (Europe & Central Asia) 73.63: Serbia (Rank: 82) 71.78: Bulgaria (Rank: 90) 71.49: Hungary (Rank: 93) 70.90: Croatia (Rank: 95) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Serbia and comparator economies – Measure of Quality 100 91.09 90 80 75.70 69.30 70 63.94 65.20 61.20 Index score 60 50 40 30 20 10 0 Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Details – Paying Taxes in Serbia Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate (% Notes contribution (number) Payments (hours) tax rate Tax base of profit) on TTR Page 46   Social security - employer 1 online 103 17.9% gross salaries 20.19 Doing Business 2018 Serbia Figure – Paying Taxes in Serbia and comparator economies – Measure of Quality 100 91.09 90 80 75.70 69.30 70 63.94 65.20 61.20 Index score 60 50 40 30 20 10 0 Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Details – Paying Taxes in Serbia Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate (% Notes contribution (number) Payments (hours) tax rate Tax base of profit) on TTR Social security - employer 1 online 103 17.9% gross salaries 20.19 Corporate income tax 1 online 38 15% taxable profits 16.01 Property tax 4 0 0.4% property value 1.95 Property transfer tax 1 2.5% sale price 1.52 Environmental tax 1 RSD 306 ton of waste 0.03 Environment protection 12 RSD 2.64 square meter of 0.01 and enhancement fee qualifying real estate Value added tax (VAT) 1 online 85 20% value added 0.00 not included Other municipality charges 12 variable various 0.00 small amount Employee paid - Social 0 jointly 19.9% gross salaries 0.00 withheld security and personal income tax Totals 33 225.5 39.7 Details – Paying Taxes in Serbia – Tax by Type Taxes by type Answer Profit tax (% of profit) 16.0 Labor tax and contributions (% of profit) 20.2 Other taxes (% of profit) 3.5 Page 47   Totals 33 225.5 39.7 Doing Business 2018 Serbia Details – Paying Taxes in Serbia – Tax by Type Taxes by type Answer Profit tax (% of profit) 16.0 Labor tax and contributions (% of profit) 20.2 Other taxes (% of profit) 3.5 Details – Paying Taxes in Serbia – Measure of Quality Answer Score Post ling index (0-100) 91.09 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process None Percentage of cases exposed to a VAT audit (%) 75% - 100% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 4.0 92 Time to obtain a VAT refund (weeks) 14.7 77.86 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 4.5 94.5 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border recent compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The mostPage 48   round of data collection for the project was completed in June 2017. See the methodology for more information. a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Serbia Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the Traffic delays and road police checks while largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 49   of agriculture or industry, national security agencies and any other Doing Business 2018 Serbia government authorities. Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Time to export: Border compliance (hours) 4 28.0 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 47 191.4 149.9 0.00 (19 Economies) Time to export: Documentary compliance 2 27.9 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 35 113.8 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 4 25.9 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 52 185.1 111.6 0.00 (27 Economies) Time to import: Documentary compliance 3 27.3 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 35 94.7 25.6 0.00 (30 Economies) Figure – Trading across Borders in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 97.41: Bulgaria (Rank: 21) 96.64: Serbia (Rank: 23) 93.72: Greece (Rank: 29) 83.96: Regional Average (Europe & Central Asia) 100.00: Croatia (Rank: 1) 100.00: Hungary (Rank: 1) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Serbia – Time and Cost Time Cost 4.5 60 4 4 52 4 47 50 3.5 3 3 40 Time (hours) 35 35 Cost (USD) 2.5 2 30 2 1.5 20 1 10 0.5 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Page 50   Doing Business 2018 Serbia Figure – Trading across Borders in Serbia – Time and Cost Time Cost 4.5 60 4 4 52 4 47 50 3.5 3 3 40 Time (hours) 35 35 Cost (USD) 2.5 2 30 2 1.5 20 1 10 0.5 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Serbia Characteristics Export Import Product HS 85 : Electrical machinery and equipment and parts thereof; sound recorders and HS 8708: Parts and reproducers, television image and sound recorders and reproducers, and parts and accessories of motor accessories of such articles vehicles Trade partner Germany Italy Border Rozske border crossing Batrovci border crossing Distance (km) 200 200 Domestic 3 3 transport time (hours) Domestic 267 214 transport cost (USD) Details – Trading across Borders in Serbia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 3.1 47.3 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 1.3 0.0 Import: Clearance and inspections required by customs authorities 3.0 52.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 2.0 0.0 Page 51   (USD) Doing Business 2018 Serbia Details – Trading across Borders in Serbia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 3.1 47.3 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 1.3 0.0 Import: Clearance and inspections required by customs authorities 3.0 52.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 2.0 0.0 Details – Trading across Borders in Serbia – Trade Documents Export Import Commercial invoice (5 copies) Commercial invoice CMR waybill Packing list EUR 1 - Certificate of origin CMR waybill Customs Transit Declaration Parking receipts Packing List Customs import declaration Customs Export Declaration EUR 1 (Certificate of origin) Parking Receipts Customs transit document Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita Page 52   or the Enforcement fees Parking Receipts Customs transit document Doing Business 2018 Serbia Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value RSD 1,063,814.00 Court name Belgrade Commercial Court City Covered Belgrade Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Time (days) 635 489.9 577.8 164.00 (Singapore) Cost (% of claim value) 40.8 26.2 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 13.0 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.75: Hungary (Rank: 13) 70.60: Croatia (Rank: 23) 67.04: Bulgaria (Rank: 40) Page 53   of judicial processes Quality Business Doing index (0-18) 2018 Serbia 13.0 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.75: Hungary (Rank: 13) 70.60: Croatia (Rank: 23) 67.04: Bulgaria (Rank: 40) 65.38: Regional Average (Europe & Central Asia) 61.41: Serbia (Rank: 60) 50.19: Greece (Rank: 131) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Serbia – Time and Cost Time Cost 1800 40.8 45 1580 1600 40 Cost (% of claim value) 1400 35 1200 30 Time (days) 26.2 1000 21.5 25 18.6 800 650 635 20 564 15.2 14.4 605 15.0 577.8 600 489.9 15 400 10 200 5 0 0 Bulgaria Croatia Europe & Greece Hungary OECD high income Serbia Central Asia Figure – Enforcing Contracts in Serbia and comparator economies – Measure of Quality Serbia 2 4.5 1.5 5 Bulgaria 2.5 2.5 2 3.5 Croatia 2.5 3.5 2 5 Greece 2.5 4.5 2 3 Hungary 3 4 2.5 4.5 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 Page 54   16 Bulgaria Croatia Europe & Greece Hungary OECD high income Serbia Central Asia Doing Business 2018 Serbia Figure – Enforcing Contracts in Serbia and comparator economies – Measure of Quality Serbia 2 4.5 1.5 5 Bulgaria 2.5 2.5 2 3.5 Croatia 2.5 3.5 2 5 Greece 2.5 4.5 2 3 Hungary 3 4 2.5 4.5 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Serbia Indicator Time (days) 635 Filing and service 30 Trial and judgment 495 Enforcement of judgment 110 Cost (% of claim value) 40.8 Attorney fees 14.5 Court fees 13.9 Enforcement fees 12.4 Quality of judicial processes index (0-18) 13.0 Court structure and proceedings (-1-5) 5.0 Case management (0-6) 4.5 Court automation (0-4) 1.5 Alternative dispute resolution (0-3) 2.0 Details – Enforcing Contracts in Serbia – Measure of Quality Page 55   Alternative dispute resolution (0-3) 2.0 Doing Business 2018 Serbia Details – Enforcing Contracts in Serbia – Measure of Quality Answer Score Quality of judicial processes index (0-18) 13.0 Court structure and proceedings (-1-5) 5.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 4.5 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.5 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 3. Can two of the following four reports be generated about the competent court: (i) Yes 1.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court No 0.0 for use by lawyers? Court automation (0-4) 1.5 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 56   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Serbia 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 0.5 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.0 1. Arbitration 1.0 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public Yes order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 57   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Serbia Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 34.0 38.0 71.2 93.1 (Norway) Time (years) 2.0 2.3 1.7 0.4 (Ireland) Page 58   Cost (% of estate) 20.0 13.1 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Serbia Europe & OECD high Indicator Serbia Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 34.0 38.0 71.2 93.1 (Norway) Time (years) 2.0 2.3 1.7 0.4 (Ireland) Cost (% of estate) 20.0 13.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 13.5 10.8 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Serbia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 60.49: Serbia (Rank: 48) 60.02: Bulgaria (Rank: 50) 55.59: Greece (Rank: 57) 55.11: Croatia (Rank: 60) 54.75: Hungary (Rank: 62) 54.19: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Serbia – Time and Cost Time Cost 4 25 3.5 3.5 3.3 20.0 3.1 20 3 Cost (% of estate) Time (years) 2.5 14.5 2.3 14.5 13.1 15 2.0 2.0 2 1.7 9.0 9.0 9.1 10 1.5 1 5 0.5 0 0 Bulgaria Croatia Europe & Greece Hungary OECD high income Serbia Central Asia Figure – Resolving Insolvency in Serbia and comparator economies – Measure of Quality Serbia 6 2.5 2 3 Page 59   Bulgaria 4 2.5 4 2.5 Bulgaria Croatia Europe & Greece Hungary OECD high income Serbia Central Asia Doing Business 2018 Serbia Figure – Resolving Insolvency in Serbia and comparator economies – Measure of Quality Serbia 6 2.5 2 3 Bulgaria 4 2.5 4 2.5 Croatia 4 3 2 3 Greece 5.5 2.5 1 3 Hungary 5 2.5 2 0.5 OECD high income 5.4 2.8 2.3 1.9 Europe & Central Asia 4.4 2.6 2.1 1.8 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Serbia and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 50 43.7 45 40 38.0 36.0 34.0 32.7 33.6 35 30 25 20 15 10 5 0 Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Details – Resolving Insolvency in Serbia Indicator Answer Explanation Proceeding liquidation As Mirage management wants to keep the hotel operating, it will petition the court to (after an commence reorganization proceedings - either pre-packaged reorganization under Article attempt at 155 or regular reorganization under Article 162 of the Bankruptcy Law. As all creditors vote reorganization) on the reorganization plan and BizBank is the principal creditor, the Bank is likely to reject the claim, which will trigger mandatory liquidation proceedings under Article 165 of the Bankruptcy Law. Outcome piecemeal sale As the hotel is unable to repay its loan to BizBank and expects negative cash flow for the next two years, it is then unlikely that the hotel will continue operating. Additionally, continuous operation is only possible if reorganization plan is approved, which is not likely in this case. Time (in years) 2.0 It takes approximately 2 years to resolve insolvency in Serbia. Mirage management will file a Page 60   petition for reorganization. It will take at least 6 months for all the procedures related to Serbia Bulgaria Croatia Greece Hungary Europe & Central Asia Doing Business 2018 Serbia Details – Resolving Insolvency in Serbia Indicator Answer Explanation Proceeding liquidation As Mirage management wants to keep the hotel operating, it will petition the court to (after an commence reorganization proceedings - either pre-packaged reorganization under Article attempt at 155 or regular reorganization under Article 162 of the Bankruptcy Law. As all creditors vote reorganization) on the reorganization plan and BizBank is the principal creditor, the Bank is likely to reject the claim, which will trigger mandatory liquidation proceedings under Article 165 of the Bankruptcy Law. Outcome piecemeal sale As the hotel is unable to repay its loan to BizBank and expects negative cash flow for the next two years, it is then unlikely that the hotel will continue operating. Additionally, continuous operation is only possible if reorganization plan is approved, which is not likely in this case. Time (in years) 2.0 It takes approximately 2 years to resolve insolvency in Serbia. Mirage management will file a petition for reorganization. It will take at least 6 months for all the procedures related to reorganization to take place, for the plan to be proposed and rejected by the creditors. 90 days for submitting reorganization plan, which can be extended up to 120 days (which is very common). Once the plan is filed, the court is required to schedule a hearing in 20 days, which is usually prolonged up to 30-60 days. All creditors vote on the reorganization plan. As BizBank is the principal creditor, the Bank is likely to reject the claim, which will trigger mandatory liquidation proceedings. The proceedings will then be converted into liquidation. Then, the Court will appoint an administrator to review creditors' claims, prepare a preliminary balance sheet and a list of creditors. . Creditors can then dispute the administrator's decision on accepting or denying their claims. Once all the claims are finalized, the creditors will take a decision on whether to sell the hotel as a going concern or to sell the assets separately. The administrator will then organize an auction, where assets will be sold. After the sale, another hearing will take place to finalize the distribution list, after which the proceeds of the sale will be distributed. Cost (% of 20.0 Major expenses include remuneration of the insolvency representative (both regular fees estate) and percent of the realized assets) - up to 10-15%; attorneys' fees - up to 5-6%; accountants' fees - up to 3%; auctioneers’ fees - 1%; court fees - 1%. Recovery rate (cents on the 34.0 dollar) Details – Resolving Insolvency in Serbia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 13.5 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only Page 61   What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 dollar) Doing Business 2018 Serbia Details – Resolving Insolvency in Serbia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 13.5 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 6.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit Yes 1.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over 1.0 ordinary unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 3.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are a ected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated Page 62   equally? Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive Doing at least as Business much as 2018 what they would obtain in a liquidation? Serbia Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial Yes 1.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost Page 63   (i) notice period for redundancy dismissal; (ii) the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Serbia Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Serbia Answer Hiring Page 64   Fixed-term contracts prohibited for permanent tasks? Yes days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Serbia Details – Labor Market Regulation in Serbia Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) 24.0 Maximum length of xed-term contracts, including renewals (months) 24.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 212.0 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) 6.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 26.0 Premium for work on weekly rest day (% of hourly pay) 110.0 Premium for overtime work (% of hourly pay) 26.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 20.0 Paid annual leave for a worker with 5 years of tenure (working days) 20.0 Paid annual leave for a worker with 10 years of tenure (working days) 20.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 20.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? Yes Page 65   Third-party Doing approval Business 2018 if nine workers are dismissed? Serbia No Retraining or reassignment obligation before redundancy? Yes Priority rules for redundancies? No Priority rules for reemployment? Yes Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 0.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 0.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 0.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 0.0 Severance pay for redundancy dismissal for a worker with 1 year of tenure 1.4 Severance pay for redundancy dismissal for a worker with 5 years of tenure 7.2 Severance pay for redundancy dismissal for a worker with 10 years of tenure 14.4 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 7.7 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 135.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? No Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 12.0 Business Reforms in Serbia In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Serbia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Serbia made starting a business easier by reducing the signature certi cation fee and increasing the e ciency of the registry, reducing the time for business registration. Registering Property: Serbia improved the reliability of its land administration system by implementing a geographic information system. Enforcing Contracts: Serbia made enforcing contracts easier by adopting a new enforcement law that broadens and clari es the responsibilities of enforcement agents as well as the powers of the courts during the enforcement process. Page 66   Minimum contribution period for unemployment protection (months)? 12.0 Doing Business 2018 Serbia Business Reforms in Serbia In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Serbia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Serbia made starting a business easier by reducing the signature certi cation fee and increasing the e ciency of the registry, reducing the time for business registration. Registering Property: Serbia improved the reliability of its land administration system by implementing a geographic information system. Enforcing Contracts: Serbia made enforcing contracts easier by adopting a new enforcement law that broadens and clari es the responsibilities of enforcement agents as well as the powers of the courts during the enforcement process. DB2017 Starting a Business: Serbia simpli ed the process of starting a business by reducing the time to register a company. Dealing with Construction Permits: Serbia made dealing with construction permits faster by implementing an online system and streamlining the process of obtaining technical conditions for the building permit. Registering Property: Serbia simpli ed property transfer process by introducing e ective time limits. DB2016 Dealing with Construction Permits: Serbia made dealing with construction permits less costly by eliminating the land development tax for warehouses. On the other hand, it also introduced a mandatory inspection of foundation works. Paying Taxes: Serbia made paying taxes easier for companies by introducing an electronic system for ling and paying VAT and social security contributions as well as by abolishing the urban land usage fee. On the other hand, Serbia increased the property tax and environmental tax rates. DB2015 Registering Property: Serbia made transferring property more di cult by eliminating the expedited procedure for registering a property transfer. DB2014 Paying Taxes: Serbia made paying taxes more costly for companies by increasing the corporate income tax. DB2013 Starting a Business: Serbia made starting a business easier by eliminating the paid-in minimum capital requirement. Enforcing Contracts: Serbia made enforcing contracts easier by introducing a private baili system. Resolving Insolvency: Serbia strengthened its insolvency process by introducing private baili s, reducing the starting prices for the sale of assets, prohibiting appeals, expediting service of process and adopting an electronic registry for injunctions to make public all prohibitions on the disposal or pledge of movable or immovable property. DB2012 Registering Property: Serbia made transferring property quicker by o ering an expedited option. Resolving Insolvency: Serbia adopted legislation introducing professional requirements for insolvency administrators and regulating their compensation. DB2011 Page 67   Resolving Insolvency: Serbia adopted legislation introducing professional requirements for insolvency administrators and regulating their compensation. Doing Business 2018 Serbia DB2011 Resolving Insolvency: Serbia passed a new bankruptcy law that introduced out-of-court workouts and a uni ed reorganization procedure. DB2010 Starting a Business: Serbia made starting a business easier by creating a one-stop shop for company registration. Getting Credit: Serbia improved access to credit information by guaranteeing by law borrowers’ right to inspect their own data. Labor Market Regulation: Serbia introduced priority rules applying to redundancy dismissals or layo s. DB2009 Dealing with Construction Permits: In Serbia an administrative backlog at the Belgrade Municipality’s Construction Department increased the time required for obtaining building permits. Registering Property: Serbia reduced the cost to transfer property by lowering the property transfer tax. Page 68   increased the time required for obtaining building permits. Registering Doing 2018Serbia Property: Business reduced the cost to transfer property by lowering the property transfer tax. Serbia Page 69