59424 Zimbabwe © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A copublication of The World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. 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ISBN: 978-0-8213-7960-8 E-ISBN: 978-0-8213-8630-9 DOI: 10.1596/978-0-8213-7960-8 ISSN: 1729-2638 Library of Congress Cataloging-in-Publication data has been applied for. Printed in the United States Current features News on the Doing Business project http://www.doingbusiness.org Rankings How economies rank-from 1 to 183 http://www.doingbusiness.org/rankings/ Contents Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004 Introduction and a ranking simulation tool and Aggregate Rankings http://www.doingbusiness.org/reforms/ 5 - Year Measure of Historical data Cumulative Change Customized data sets since DB2004 http://www.doingbusiness.org/custom-query/ Starting a Business Methodology and research Dealing with The methodologies and research papers underlying Doing Business Construction Permits http://www.doingbusiness.org/Methodology/ Registering Property Download reports Access to Doing Business reports as well as subnational and regional Getting Credit reports, reform case studies and customized country and regional profiles Protecting Investors http://www.doingbusiness.org/reports/ Paying Taxes Subnational and regional projects Differences in business regulations at the subnational and regional Trading Across Borders level http://www.doingbusiness.org/subnational-reports/ Enforcing Contracts Law Library Closing a Business Online collection of business laws and regulations relating to business and gender issues Doing Business 2011 http://www.doingbusiness.org/law-library/ Business Reforms http://wbl.worldbank.org/ Local partners More than 8,200 specialists in 183 economies who participate in Doing Business http://www.doingbusiness.org/Local-Partners/Doing-Business/ Business Planet Interactive map on the ease of doing business http://rru.worldbank.org/businessplanet Doing Business 2011 : Making a Difference for Entrepreneurs is the eighth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business's life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The Doing Business methodology has limitations. Other areas important to business such as an economy 's proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions, are not studied directly by Doing Business. To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following pages present the summary Doing Business indicators for Zimbabwe. The data used for this economy profile come from the Doing Business database and are summarized in graphs. These graphs allow a comparison of the economies in each region not only with one another but also with the "good practice" economy for each indicator. The good-practice economies are identified by their position in each indicator as well as their overall ranking and by their capacity to provide good examples of business regulation to other countries. These good -practice economies do not necessarily rank number 1 in the topic or indicator, but they are in the top 10. More information is available in the full report. Doing Business 2011 : Making a Difference for Entrepreneurs presents the indicators, analyzes their relationship with economic outcomes and recommends reforms. The data, along with information on ordering the report, are available on the Doing Business website (www.doingbusiness.org). * Except for the Paying Taxes indicator that refers to the period January to December of 2009. Note: 2008-2010 Doing Business data and rankings have been recalculated to reflect changes to the methodology and the addition of new economies (in the case of the rankings). 1 Economy Rankings - Ease of Doing Business Zimbabwe is ranked 157 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business. Zimbabwe - Compared to global good practice economy as well as selected economies: Zimbabwe's ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 157 Starting a Business 143 Dealing with Construction Permits 172 Registering Property 82 Getting Credit 128 Protecting Investors 120 Paying Taxes 131 Trading Across Borders 168 Enforcing Contracts 110 Closing a Business 156 2 Summary of Indicators - Zimbabwe Starting a Business Procedures (number) 9 Time (days) 90 Cost (% of income per capita) 182.8 Min. capital (% of income per capita) 0.0 Dealing with Construction Permits Procedures (number) 17 Time (days) 1012 Cost (% of income per capita) 8020.6 Registering Property Procedures (number) 5 Time (days) 31 Cost (% of property value) 8.5 Getting Credit Strength of legal rights index (0-10) 6 Depth of credit information index (0-6) 0 Public registry coverage (% of adults) 0.0 Private bureau coverage (% of adults) 0.0 Protecting Investors Extent of disclosure index (0-10) 8 Extent of director liability index (0-10) 1 Ease of shareholder suits index (0-10) 4 Strength of investor protection index (0-10) 4.3 Paying Taxes Payments (number per year) 49 Time (hours per year) 242 Profit tax (%) 24.0 Labor tax and contributions (%) 6.2 Other taxes (%) 10.1 Total tax rate (% profit) 40.3 Trading Across Borders Documents to export (number) 7 Time to export (days) 53 Cost to export (US$ per container) 3280 Documents to import (number) 9 Time to import (days) 73 Cost to import (US$ per container) 5101 3 Enforcing Contracts Procedures (number) 38 Time (days) 410 Cost (% of claim) 113.1 Closing a Business Recovery rate (cents on the dollar) 0.2 Time (years) 3.3 Cost (% of estate) 22 The 5 year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies from Doing Business 2006 to Doing Business 2011. Instead of highlighting which countries currently have the most business friendly environment, this new approach shows the extent to which an economy's regulatory environment for business has changed compared with 5 years ago. This snapshot reflects all cumulative changes in an economy's business regulation as measured by the Doing Business indicators-such as a reduction in the time to start a business thanks to a one-stop shop or an increase in the strength of investor protection index thanks to new stock exchange rules that tighten disclosure requirements for related -party transactions. This figure shows the distribution of cumulative change across the 9 indicators and time between Doing Business 2006 and Doing Business 2011 0.12 0.10 Doing 0.08 business has become easier (DB 0.06 change score) 0.04 0.02 Doing business has 0.00 become more difficult or more -0.02 Angola Swaziland Botswana Lesotho South Namibia Zimbabwe costly Africa 6 1. Benchmarking Starting a Business Regulations: Zimbabwe is ranked 143 overall for Starting a Business. Ranking of Zimbabwe in Starting a Business - Compared to good practice and selected economies: 7 The following table shows Starting a Business data for Zimbabwe compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of Min. capital (number) income per (% of income Economies capita) per capita) Denmark* 0.0 New Zealand* 1 1 0.0 Selected Economy Zimbabwe 9 90 182.8 0.0 Comparator Economies Angola 8 68 163.0 28.7 Botswana 10 61 2.2 0.0 Lesotho 7 40 26.0 12.0 Namibia 10 66 18.5 0.0 South Africa 6 22 6.0 0.0 Swaziland 12 56 33.0 0.5 * The following economies are also good practice economies for : Procedures (number): Canada Cost (% of income per capita): Slovenia 8 2. Historical data: Starting a Business in Zimbabwe Starting a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 141 143 Procedures (number) 9 9 9 9 Time (days) 97 97 97 90 Cost (% of income per capita) 676.2 432.7 353.8 182.8 Min. capital (% of income per capita) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Starting a Business sub indicators in Zimbabwe over the past 4 years: 9 Starting a Business Summary - Zimbabwe This table summarizes the procedures and costs associated with setting up a business in Zimbabwe. STANDARDIZED COMPANY Legal Form: Private Limited Liability Company City: Harare Registration Requirements: No: Procedure Time to complete Cost to complete 1 Register the company name with the Chief Registrar of Companies 7 USD 5 2 File memorandum and articles of association with the Registrar of 14 USD 100 Companies 3 Register with the tax authorities for income tax, VAT, and PAYE 14 no charge 4 * Register with the National Social Security Authority for pension and 14 no charge Accident Prevention and Compensation Scheme 5 * Register with the Manpower Development Fund 1 no charge 6 * Pick up the form of license application notice from the City Health 1 USD 20 Department 7 * Advertise on a local newspaper the application for a trade and 35 USD 30 business license 10 8 Submit an application form for issuance of new licenses to the 30 USD 530 Licensing Office in Harare Municipality 9 * Licensing officers visit the company site 1 no charge * Takes place simultaneously with another procedure. 11 Starting a Business Details - Zimbabwe Procedure 1 Register the company name with the Chief Registrar of Companies Time to complete: 7 Cost to complete: USD 5 Comment: The reservation is valid for 30 days and can be extended for another 30 days for an additional fee. Procedure 2 File memorandum and articles of association with the Registrar of Companies Time to complete: 14 Cost to complete: USD 100 Comment: The law provides for model or boilerplate articles of incorporation. on the date of incorporation, the Registrar of Companies must be notified of the appointments of the company's directors and secretaries. This is done by filing the particulars (a) of register of directors and secretaries and any changes therein or a list of directors and principal officers (Form CR 14) These documents must be accompanied by a duplicate original or a printed notarized copy. In practice, companies usually start up with a low amount of capital to avoid the exorbitant stamp duty. A company may also issue shares at a premium to circumvent the requirement. Procedure 3 Register with the tax authorities for income tax, VAT, and PAYE Time to complete: 14 Cost to complete: no charge Comment: Upon formation, a company must register at the regional Zimbabwe Revenue Authority Office. A copy of the company's certificate of incorporation is required for the Collector's records, along with the memorandum and articles of association and a certified copy of the identification of the assigned public officer. The company will be issued a registration number, as well as the current tax tables and the pay-as-you-earn (PAYE) receipt books. The P8 and P6 Forms now must be generated by the applicant itself and are not freely available. The ITF 16 Form must be completed in consultation with the Income Tax Office. According to Zimbabwe's Finance Act (as amended), companies must now budget to pay all their company tax within the trading year. The tax must be paid as follows: 10% by the 25th of March, 10% by the 25th of June, 40% by the 25th of September, and the balance of the estimated tax for the tax year by the 20th of December. Firms with a turnover of US $60,000 must register for VAT with the Zimbabwe Revenue Authority (ZIMRA). An application must be made on an Application for Certificate of Registration (Form VAT 1), which, along with Forms VAT 2 and VAT 3, is found at ZIMRA Web site (www.zimra.co.zw). Firms with a turnover of less than ZWN 120 billion may apply for voluntary VAT registration. Procedure 4 Register with the National Social Security Authority for pension and Accident Prevention and Compensation Scheme Time to complete: 14 12 Cost to complete: no charge Comment: The employer and the employee must each contribute 4% of employee gross monthly salary. Procedure 5 Register with the Manpower Development Fund Time to complete: 1 Cost to complete: no charge Comment: Employers must register with, and contribute 1% of their wage bill to, the state-run Manpower Development Fund. The fund allows employers to recover expenses when employees complete training. Procedure 6 Pick up the form of license application notice from the City Health Department Time to complete: 1 Cost to complete: USD 20 Comment: Procedure 7 Advertise on a local newspaper the application for a trade and business license Time to complete: 35 Cost to complete: USD 30 Comment: A trade and business license applicant must publicly announce the proposed application twice in a local newspaper. The form, Notice of intention to apply for the issuance of a new license, is available from the City Health Department. The first notice must be published no more than 6 weeks, but at least 4 weeks, before the application will be heard by the licensing authority. The second notice must appear 7 days after the first notice. Any objections to the application must be submitted in writing to the licensing authority within 7 days of the second notice. Procedure 8 Submit an application form for issuance of new licenses to the Licensing Office in Harare Municipality Time to complete: 30 Cost to complete: USD 530 Comment: Two copies of the application forms are submitted and proof of both publications in a local newspaper of a notice of intention to operate a business. On receipt of the application, the Licensing Office requests a police report on the applicant, as well as a report on the person who will be in actual and effective control of the premises to which the application relates, that person is not also the applicant. The Licensing Office also seeks a report from the Harare Town Planner to ensure that the application is consistent with the zoned use of the premises. Application for the license can start once the Registrar of Companies grants its approval of the company name. It is also possible to apply for a temporary license pending the grant of the full license, which can take up to a month or longer. Procedure 9 Licensing officers visit the company site Time to complete: 1 Cost to complete: no charge Comment: Officers inspect the company site to check if the intended premises are suitable for the intended use. The criteria used by the officers are specified in the relevant bylaws. 13 14 15 1. Benchmarking Dealing with Construction Permits Regulations: Zimbabwe is ranked 172 overall for Dealing with Construction Permits. Ranking of Zimbabwe in Dealing with Construction Permits - Compared to good practice and selected economies: 16 The following table shows Dealing with Construction Permits data for Zimbabwe compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) income per Economies capita) Denmark 6 Qatar 0.8 Singapore 25 Selected Economy Zimbabwe 17 1012 8020.6 Comparator Economies Angola 12 328 694.3 Botswana 24 167 264.5 Lesotho 15 601 1290.7 Namibia 12 139 113.0 South Africa 17 174 23.1 Swaziland 14 116 143.0 17 2. Historical data: Dealing with Construction Permits in Zimbabwe Dealing with Construction Permits data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 175 172 Procedures (number) 17 17 17 17 Time (days) 538 1012 1012 1012 Cost (% of income per capita) 6571.3 9372.6 13770.3 8020.6 3. The following graphs illustrate the Dealing with Construction Permits sub indicators in Zimbabwe over the past 4 years: 18 Dealing with Construction Permits in Zimbabwe The table below summarizes the procedures, time, and costs to build a warehouse in Zimbabwe. BUILDING A WAREHOUSE City: Harare Registration Requirements: No: Procedure Time to complete Cost to complete 1 Request and obtain approval from the inspector of factories 30 days USD 12,870 2 Request and obtain building plan approval by the Harare City Council 365 days USD 12,870 3 Request and receive inspection from building inspectorate of completion 30 days no charge of foundation by independent structural engineer 4 Inform the building inspectorate of the completion of drainage installation 1 day no charge 5 Inform and receive inspection from the building inspectorate upon 14 days no charge completion of structure 6 Request and receive inspection by the building inspectors upon completion 30 days no charge of construction 7 * Apply for power connection with Zimbabwe Electricity Supply Authority 1 day no charge (ZESA) 19 8 Obtain quotations for power connection with Zimbabwe Electricity Supply 365 days USD 250 Authority (ZESA) 9 Pay and submit notification of commencement of wiring at Zimbabwe 1 day no charge Electricity Supply Authority (ZESA) 10 Receive inspection by Zimbabwe Electricity Supply Authority (ZESA) 1 day no charge 11 Connect to power lines of Zimbabwe Electricity Supply Authority (ZESA) 79 days USD 1,500 12 * Request water and sewage connection from Zimbabwe National Water 1 day USD 2,390 Authority (ZINWA) and connect to its networks 13 * Request telephone connection 1 day USD 180 14 * Receive inspection and connection by telecommunications provider 75 days no charge 15 Request occupancy certificate 1 day no charge 16 Request and receive inspection from the local Fire Department on fire 7 days no charge equipment installation for occupancy certificate 17 Obtain occupancy certificate 88 days no charge * Takes place simultaneously with another procedure. 20 Dealing with Construction Permits Details - Zimbabwe Procedure 1 Request and obtain approval from the inspector of factories Time to complete: 30 days Cost to complete: USD 12,870 Agency: Inspector of Factories Comment: Before an application for approval of building plans can be submitted to the local authority, approval must first be obtained from the Inspector of Factories. This is a separate application and carries its own application fee, established by the Inspector. The approval period is not less than 30 days. The cost is 1% of the project value. Procedure 2 Request and obtain building plan approval by the Harare City Council Time to complete: 365 days Cost to complete: USD 12,870 Agency: Harare City Council Comment: BuildCo needs to submit the following three documents at the same time: the building permit application, the application for the factories inspection and IF NEEDED (not in our case): the TPD-1 form for the planning permit the architects' and structural engineers' drawings and certificates to the relevant local authority for approvals, under the Regional, Town, and Country Planning Act and the model building bylaws. The application must be accompanied by a completed set of plans for the structure, prepared by a qualified draftsman or architect. The application is circulated for approval to all departments, including the Department of Works, Highways and Works, Chemical Laboratory and Trade Waste, City Planning, Water and Sewerage, Land Survey, Traffic Engineering, Valuation and Estates, Department of Health, Department of Fire, Department of Housing and Community Services, and Zimbabwe Electricity Supply Authority (ZESA), and so forth. Each agency contacts the applicant directly for clarification or rectification, if required. Once all agencies have accepted the plans, the Chief Building Inspector makes a final assessment and issues an approval of building plans to the applicant. The form contains a commencement of work notice that must be submitted by the applicant once the footings are ready for inspection. Subsequently, all phases of the construction must be approved by the Building Inspectorate. Procedural and approval costs are either 1% or 1.75% of the construction cost, but this varies from one authority to another. The time required for the entire procedure depends on the local authority; in Harare, it is usually not less than 6 months and can be up to a year. Because the approval cost is based on a percentage of the total construction cost, a certain amount is paid based on the estimated cost. However, the local authority may ask for the difference between the estimate and the actual cost at the end of the project (a common requirement). This causes problems, particularly in an inflationary environment. Pre-contract inflation is currently assessed to be about 75% per month. Post-contract-award inflation is assessed at about 45% per month. Inflationary pressures on the construction project can be limited through the pre-purchase of construction materials. The cost to completion depends on whether the developer is prepared to fund the pre-purchase option. Borrowing money is expensive, with bank overdraft rates 21 currently running at about 700%. In addition, many developers close an insurance bond with the building contractor on the value of the construction materials. Procedure 3 Request and receive inspection from building inspectorate of completion of foundation by independent structural engineer Time to complete: 30 days Cost to complete: no charge Agency: Building Inspectorate Comment: Delays frequently occur because the City of Harare inspectors cannot get transportation to inspect a site. Even if offered a lift to the site by the contractor or consultant, the inspectors are not allowed to accept it because they are not insured for travel provided by a third party. Theoretically, inspections are conducted once a month. A final inspection will occur only if specifically requested (but is required for obtaining the occupancy permit). Theoretically, the builder must stop construction until the inspection is conducted, but doing so is impractical. (In addition, inflation further increases the cost of delays.) The City of Harare inspectors generally allow a structural engineer to cover the inspections of foundations. In practice, since 2007 due to lack of fuel and means of transportation inspections are no longer conducted. Companies use their own engineers for inspections during construction. Procedure 4 Inform the building inspectorate of the completion of drainage installation Time to complete: 1 day Cost to complete: no charge Agency: Building Inspectorate Comment: The officially required inspection almost never happens unless the fuel is provide for transportation. Procedure 5 Inform and receive inspection from the building inspectorate upon completion of structure Time to complete: 14 days Cost to complete: no charge Agency: Building Inspectorate Comment: As of 2007, inspections are undertaken by the Chief Building Inspector and a deputy inspector. This change, implemented after allegations that the lower officers were requesting facilitation payments, has caused the time require for this inspection to increase. Procedure 6 Request and receive inspection by the building inspectors upon completion of construction Time to complete: 30 days Cost to complete: no charge Agency: Building inspectorate 22 Comment: Inspectors will visit the site only if there is fuel for vehicles, or the applicant provides transportation. Once the inspection has taken place, a protocol is written, which generally takes 30 days. Procedure 7 Apply for power connection with Zimbabwe Electricity Supply Authority (ZESA) Time to complete: 1 day Cost to complete: no charge Agency: Zimbabwe Electricity Supply Authority (ZESA) Comment: BuildCo files an application for electricity services. Procedure 8 Obtain quotations for power connection with Zimbabwe Electricity Supply Authority (ZESA) Time to complete: 365 days Cost to complete: USD 250 Agency: Zimbabwe Electricity Supply Authority (ZESA) Comment: On receipt of the application, engineers at the Zimbabwe Electricity Supply Authority (ZESA) prepare a quotation for the work to be done and provide it to the applicant on a "quotation and contract of supply." The quotation remains valid for 2 months. In order to prepare the quotations, it is needed to obtain approvals from (can be obtained simultaneously): City Council - sewer and wayleaves (30 days) Tel One - telephone cable crossing (14 days) ZINWA - water mains crossing (30 days) NRZ - Railway crossing (30 days). One week is required to prepare the quotations and 30 days to obtain the approvals. Procedure 9 Pay and submit notification of commencement of wiring at Zimbabwe Electricity Supply Authority (ZESA) Time to complete: 1 day Cost to complete: no charge Agency: Zimbabwe Electricity Supply Authority (ZESA) Comment: To accept the quotation, the investor must make the specified payment and submit a "notification of commencement of wiring" form. Procedure 10 Receive inspection by Zimbabwe Electricity Supply Authority (ZESA) Time to complete: 1 day Cost to complete: no charge Agency: Zimbabwe Electricity Supply Authority (ZESA) Comment: 23 Procedure 11 Connect to power lines of Zimbabwe Electricity Supply Authority (ZESA) Time to complete: 79 days Cost to complete: USD 1,500 Agency: Zimbabwe Electricity Supply Authority (ZESA) Comment: Forms identifying the property and the type (loading) of supply are submitted to the Zimbabwe Electricity Supply Authority (ZESA). There is no charge for this, and approval generally takes up to 2 weeks. The application must identify the building loading requirement and whether the supply is to be below ground or overhead (as this determines the supply requirements and therefore the cost). ZESA provides a supply from the nearest grid supply to a meter board positioned just within (a maximum of 5 meters) the stand boundary. Assuming that the warehouse requires a three-phase, 100-amp supply, the cost would be around ZWD 30 million (this includes the cost of the cables, glands, trenching, a meter, and labor). The installation takes 3­4 weeks. The meter board itself is supplied by the electrical contractor working on site, as are all the reticulation wiring for small power and lighting installation, all at the developer's cost. Procedure 12 Request water and sewage connection from Zimbabwe National Water Authority (ZINWA) and connect to its networks Time to complete: 1 day Cost to complete: USD 2,390 Agency: Zimbabwe National Water Authority (ZINWA) Comment: As of February 1, 2009 the provision of water supplies reverts back from ZINWA to purview of local municipalities. In 2007, municipal water supplies have been taken over by a new authority, the Zimbabwe National Water Authority (ZINWA). Obtaining a new connection now requires proof of ownership of the stand and account clearance on any other water billing and is undertaken by the developer (in this case BuildCo) or its agents. Separate applications are made by the construction company for water and sewerage connections. There may be an additional charge for this determined by the local authority. BuildCo completes and lodges an application for a "new water connection and supply" form, available at the Water and Sewerage Branch of ZINWA. In addition to the form, BuildCo must provide the following: - A letter of commitment addressed to the Director of Works stating BuildCo's intention to proceed with a connection. - A statement of the quality of water required, to determine the appropriate pipe size and meter needed. The branch will issue the applicant a T.W. number and notate the application form. A receipt for the application specifying the fees to be paid is issued. Fees come in two parts, a supply deposit and a connection fee, and would be USD 626. The applicant must take the notated application form and the receipt to the City Treasury Office, pay the required fees, and have the branch receipt machine-endorsed with the payment. The cost depends on the type of water supply required. The applicant must purchase the 24 water meter; ZINWA are no longer able to supply water meters. Application, connection fee, and account deposit amount to USD 1,764 for a 25-milimeter connection. There is no charge for the application, but there is an upfront charge before the connection is made. It is difficult to provide a precise cost because costs fluctuate so rapidly. The embossed receipt and the application form are returned to the branch, which requests that a job number be issued by the Costing Office. The branch then issues a Location Advice internally for the work to be undertaken. The applicant is required to complete an Installation of Water Service form indicating the site of the connection. Where fire hose reels on site are required (a requirement under the building bylaws for any industrial/warehouse building exceeding 400 sq. m. in floor area), a 2-inch (50mm) water meter is required. Procedure 13 Request telephone connection Time to complete: 1 day Cost to complete: USD 180 Agency: TelOne Comment: The applicant needs to submit to Tel One a form, Application for telephone service, form and complete a Telephone Directory Entry application. Connection to the facilities will be made after the payment of a refundable deposit. Obtaining an additional phone line can be a very lengthy process. Until recently, only analog networks existed (a few fiber optic lines have been laid but are not the rule), so expansion of the network was difficult. The company may also be charged for the installation equipment. In practice, most people use cellular phones now. Procedure 14 Receive inspection and connection by telecommunications provider Time to complete: 75 days Cost to complete: no charge Agency: TelOne Comment: Procedure 15 Request occupancy certificate Time to complete: 1 day Cost to complete: no charge Agency: Local Authority Comment: An occupation certificate is issued by the local authority once the project is complete and inspected by the Fire Department and the Building Inspector. Procedure 16 Request and receive inspection from the local Fire Department on fire equipment installation for occupancy certificate Time to complete: 7 days 25 Cost to complete: no charge Agency: Fire Department and Building Inspectorate Comment: Approval by the Fire Department is required to obtain an occupancy permit. Inspections are made by appointment only. Usually, at least a week's notice is required. The same issues as with other inspections apply (no transportation, long delay). Therefore, in practice, the architect or draftsman picks up the inspector and brings the inspector to the site. Otherwise, it might take weeks before the inspector visits the site. The typical wait is a week. Procedure 17 Obtain occupancy certificate Time to complete: 88 days Cost to complete: no charge Agency: Local Authority Comment: An occupation certificate is issued by the local authority once the project is complete and inspected by the Fire Department and the Building Inspector. 26 27 1. Benchmarking Registering Property Regulations: Zimbabwe is ranked 82 overall for Registering Property. Ranking of Zimbabwe in Registering Property - Compared to good practice and selected economies: 28 The following table shows Registering Property data for Zimbabwe compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) property Economies value) New Zealand* 2 Norway* 1 Saudi Arabia 0.0 Selected Economy Zimbabwe 5 31 8.5 Comparator Economies Angola 7 184 11.5 Botswana 5 16 5.0 Lesotho 6 101 8.0 Namibia 9 23 9.6 South Africa 6 24 8.8 Swaziland 9 44 7.1 * The following economies are also good practice economies for : Procedures (number): United Arab Emirates Time (days): Saudi Arabia, Thailand, United Arab Emirates 29 2. Historical data: Registering Property in Zimbabwe Registering Property data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 81 82 Procedures (number) 4 4 5 5 Time (days) 30 30 31 31 Cost (% of property value) 25.0 25.1 10.1 8.5 3. The following graphs illustrate the Registering Property sub indicators in Zimbabwe over the past 4 years: 30 Registering Property in Zimbabwe This topic examines the steps, time, and cost involved in registering property in Zimbabwe. STANDARDIZED PROPERTY Property Value: 19,788.54 City: Harare Registration Requirements: No: Procedure Time to complete Cost to complete 1 The conveyancer prepares the draft deed, power of 1-3 days 4% property value attorney to pass transfer as well as declarations for (Conveyancer's fees) signing by buyer and seller 2 * The seller applies for a capital gains tax clearance 5 days (simultaneous Capital gains Tax is 5% of certificate (either withholding tax or Capital Gains with procedure 3) the actual gains (not tax) accounted here) 3 * Payment of Capital Gains Tax and obtain CGT 1 day no cost certificate with ZIMRA 4 * The seller applies for the rates clearance certificate to 14 days (simultaneous USD 500 (Approx average the local authority under whose jurisdiction the with procedure 2) for high density suburb, property falls though rates constantly increase) 5 Transfer documents are lodged for registration of title 14 days Registration fee USD 20 with the Registrar of the Deeds' Office and Stamp duty: 1% for first USD 5,0002% for next USD 15,0003% for next USD 80,0004% for USD balance 31 * Takes place simultaneously with another procedure. 32 Registering Property Details - Zimbabwe Procedure 1 The conveyancer prepares the draft deed, power of attorney to pass transfer as well as declarations for signing by buyer and seller Time to complete: 1-3 days Cost to complete: 4% property value (Conveyancer's fees) Agency: Conveyancer Comment: Upon payment of transfer fees to the conveyancer, he will draft a proposal deed of transfer (in duplicate) deriving the powers to do so from the signed and witnessed agreement of sale. A search of the property title is conducted by the Lawyer at the Land Registry In drafting the proposal transfer deed the conveyancer will always refer to the deed from the seller and other information from the Deeds Office. The proposal must also refer to the diagram deed which will be annexed to the first transfer deed. The conveyancer's fee rate is as of November 2006. The documentation shall include: Declaration by seller and by purchaser (for stamp duty purposes) Sale agreement Power of Attorney to make the transfer Procedure 2 The seller applies for a capital gains tax clearance certificate (either withholding tax or Capital Gains tax) Time to complete: 5 days (simultaneous with procedure 3) Cost to complete: Capital gains Tax is 5% of the actual gains (not accounted here) Agency: Zimbabwe Revenue Authority (ZIMRA) Comment: The capital gains tax (CGT) is assessed by the Zimbabwe Revenue Authority (ZIMRA), which determines how much is payable by way of capital gains tax. The rate is 20% on the gains and is paid by the seller. The Conveyancer will deliver the file in person to ZIMRA. ZIMRA customer service helps with the computation. The documentation required: · Completed Capital Gains Tax Form 1 · Copy of Title Deed · Agreement of Sale signed by both the buyer and seller (which will provide the sale price, the expenses of the conveyancer) · Certificate of incorporation for both companies · Directors' resolution to buy/sell this warehouse (1 from the selling company and 1 from the buyer company) · Contact details of the representative of both companies After verification, ZIMRA will tabulate what is the actual cost of the CGT and will inform the conveyancer of the amount to be paid. A notice of payment is delivered to the Conveyancer providing details of ZIMRA bank account where the payment is to be made. Procedure 3 Payment of Capital Gains Tax and obtain CGT certificate with ZIMRA Time to complete: 1 day Cost to complete: no cost 33 Agency: Zimbabwe Revenue Authority (ZIMRA) Comment: The conveyancer will pay the amount representing the CGT at the a commercial Bank. He will then submit the Bank deposit slip at ZIMRA as proof of payment of the CGT. This proof is mandatory for the transfer to actually take place at the Deed's office. Procedure 4 The seller applies for the rates clearance certificate to the local authority under whose jurisdiction the property falls Time to complete: 14 days (simultaneous with procedure 2) Cost to complete: USD 500 (Approx average for high density suburb, though rates constantly increase) Agency: Local Authority Comment: This application is performed by a conveyancer (fees already covered by Procedure 1). The local authority will provide an assessment of how much is payable by way of advance rates and outstanding rates, if any. In Zimbabwe there is at the moment no land tax, instead rates are paid to the local authority. So every property in Zimbabwe is subject to these rates paid by the property owner to the municipality or any other local authority for the services provided, like refuse, sewage etc. Before one can transfer a property all the rates due should be paid to the local authority, so it depends on outstanding amount due to the municipality. The rates in Zimbabwe are based on the value of the property, size and whether there are improvements or not. It is also important to note that the value of the property is a function of the location of the property. For the property we are talking about the rates would therefore be around ZWD 500. When the seller pays the outstanding rates payment he receives what is known as the rates clearance certificate. These rates are paid by the purchaser as pro forma costs, which will then be reimbursed by seller on the date of the transfer for the advance rates paid calculated on pro rata basis from the date of payment to date of transfer (where purchaser does not have vacant possession or occupation prior to transfer since in this event risk and profit in the property has usually passed in terms of the agreement of sale.) The documentation shall include: No documentation is required in applying for this certificate. The local authority will only need to be furnished with details of the seller and buyer and their present postal or physical addresses, and description of the property being transferred Procedure 5 Transfer documents are lodged for registration of title with the Registrar of the Deeds' Office Time to complete: 14 days Cost to complete: Registration fee USD 20 and Stamp duty: 1% for first USD 5,0002% for next USD 15,0003% for next USD 80,0004% for USD balance Agency: Deeds Office Comment: The stamp duty is paid upon lodging at the Deeds Office. The copies of the deeds are lodged with the Registrar of Deeds for examination upon payment of the registration fee and the stamp duty (according to Finance Bill 2009, for payments made in foreign currency). If there are any errors observed by the Deeds Office in form, typographical or in content for amendments/corrections, OR is the resident property valuer seconded from the Ministry of Local Government and Housing is of the view that the declared sale price does not sound genuine, then he will carry out an onsite inspection. Then the deed is returned to the conveyancer. Once the corrections have been attended to and/or valuation has been carried out and additional duties/fees based on this increased value have been obtained from the purchaser, the copies are again returned by the conveyancer to the Deeds Office for further examination. If there are no more errors the deed is signed (registered) by the Registrar of 34 Deeds or his/her designate. One copy of the deed is filed in the Office of the Registrar of Deed and the second one sent back to the conveyancer for onward transmission to his/her client (the new property owner). The documentation shall include: Rates clearance certificate (obtained in Procedure 3) Capital gains tax clearance (obtained in Procedure 2) Two copies of the draft deed Power of attorney to pass transfer Declaration by seller and buyer Original holding deed 35 36 1. Benchmarking Getting Credit Regulations: Zimbabwe is ranked 128 overall for Getting Credit. Ranking of Zimbabwe in Getting Credit - Compared to good practice and selected economies: 37 The following table shows Getting Credit data for Zimbabwe compared to good practice and comparator economies: Good Practice Strength of Depth of Public Private legal rights credit registry bureau Economies index (0-10) information coverage (% coverage (% index (0-6) of adults) of adults) New Zealand* 100.0 Portugal 67.1 Singapore* 10 United Kingdom 6 Selected Economy Zimbabwe 6 0 0.0 0.0 Comparator Economies Angola 4 3 2.4 0.0 Botswana 7 4 0.0 57.6 Lesotho 6 0 0.0 0.0 Namibia 8 5 0.0 58.5 South Africa 9 6 0.0 54.9 Swaziland 6 5 0.0 35.7 * The following economies are also good practice economies for : Strength of legal rights index (0-10): Hong Kong, China, Kenya, Kyrgyz Republic, Malaysia Private bureau coverage (% of adults): Argentina, Australia, Canada, Iceland, Ireland, Norway, Sweden, United Kingdom, United States 27 countries have the highest credit information index. 38 2. Historical data: Getting Credit in Zimbabwe Getting Credit data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 125 128 Strength of legal rights index (0-10) 6 6 6 6 Depth of credit information index (0-6) 0 0 0 0 Private bureau coverage (% of adults) 0.0 0.0 0.0 0.0 Public registry coverage (% of adults) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Getting Credit sub indicators in Zimbabwe over the past 4 years: 39 Getting Credit in Zimbabwe The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in Zimbabwe. Getting Credit Indicators (2010) Indicator Private credit Public credit Private bureau coverage (% of adults) 0 bureau registry Are data on both firms and individuals distributed? No No 0 Are both positive and negative data distributed? No No 0 Does the registry distribute credit information from retailers, trade No No 0 creditors or utility companies as well as financial institutions? Are more than 2 years of historical credit information distributed? No No 0 Is data on all loans below 1% of income per capita distributed? No No 0 Is it guaranteed by law that borrowers can inspect their data in the No No 0 largest credit registry? Coverage 0.0 0.0 Number of individuals 0 0 Number of firms 0 0 40 Strength of legal rights index (0-10) 6 Can any business use movable assets as collateral while keeping possession of the assets; and any financial Yes institution accept such assets as collateral ? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, Yes without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without Yes requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically to the products, Yes proceeds or replacements of the original assets ? Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations Yes and debts can be secured by stating a maximum amount rather than a specific amount between the parties ? Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the No grantor's name of a security right ? Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? Yes Do secured creditors have absolute priority to their collateral in bankruptcy procedures? No During reorganization, are secured creditors' claims exempt from an automatic stay on enforcement? No Does the law authorize parties to agree on out of court enforcement? No 41 42 1. Benchmarking Protecting Investors Regulations: Zimbabwe is ranked 120 overall for Protecting Investors. Ranking of Zimbabwe in Protecting Investors - Compared to good practice and selected economies: 43 The following table shows Protecting Investors data for Zimbabwe compared to good practice and comparator economies: Good Practice Strength of investor Economies protection index (0-10) New Zealand 9.7 Selected Economy Zimbabwe 4.3 Comparator Economies Angola 5.7 Botswana 6.0 Lesotho 3.7 Namibia 5.3 South Africa 8.0 Swaziland 4.3 44 2. Historical data: Protecting Investors in Zimbabwe Protecting Investors data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 119 120 Strength of investor protection index (0-10) 4.3 4.3 4.3 4.3 3. The following graph illustrates the Protecting Investors index in Zimbabwe compared to best practice and selected Economies: 9.7 8.0 6.0 5.7 5.3 4.3 4.3 3.7 a a an a ol ia nd o nd e ic bw th w ng ib fr a la so ts al am A ba A i Bo az Le Ze h m N Sw ut Zi ew So N Note: The higher the score, the greater the investor protection. 45 Protecting Investors in Zimbabwe The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are calculated in Zimbabwe. Protecting Investors Data (2010) Indicator Extent of disclosure index (0-10) 8 2 What corporate body provides legally sufficient approval for the transaction? 2 Whether immediate disclosure of the transaction to the public and/or shareholders is required? 1 Whether disclosure of the transaction in published periodic filings (annual reports) is required? 2 Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? 1 Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) 1 0 Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes to the company? 1 Whether shareholders can hold the approving body (the CEO or board of directors) liable for the damage that the Buyer-Seller transaction causes to the company? 0 Whether a court can void the transaction upon a successful claim by a shareholder plaintiff? 0 Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff? 46 0 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? 0 Whether fines and imprisonment can be applied against Mr. James? 0 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company? Ease of shareholder suits index (0-10) 4 0 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? 2 Whether the plaintiff can directly question the defendant and witnesses during trial? 0 Whether the plaintiff can request categories of documents from the defendant without identifying specific ones? 0 Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the transaction? 1 Whether the level of proof required for civil suits is lower than that of criminal cases? 1 Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before filing suit? Strength of investor protection index (0-10) 4.3 47 48 1. Benchmarking Paying Taxes Regulations: Zimbabwe is ranked 131 overall for Paying Taxes. Ranking of Zimbabwe in Paying Taxes - Compared to good practice and selected economies: 49 The following table shows Paying Taxes data for Zimbabwe compared to good practice and comparator economies: Good Practice Payments Time (hours Total tax rate (number per per year) (% profit) Economies year) Maldives* 3 0 Timor-Leste 0.2 Selected Economy Zimbabwe 49 242 40.3 Comparator Economies Angola 31 282 53.2 Botswana 19 152 19.5 Lesotho 21 324 19.6 Namibia 37 375 9.6 South Africa 9 200 30.5 Swaziland 33 104 36.8 * The following economies are also good practice economies for : Payments (number per year): Qatar 50 2. Historical data: Paying Taxes in Zimbabwe Paying Taxes data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 130 131 Total tax rate (% profit) 53.0 63.7 39.4 40.3 Payments (number per year) 52 52 51 49 Time (hours per year) 256 256 270 242 3. The following graphs illustrate the Paying Taxes sub indicators in Zimbabwe over the past 4 years: 51 Paying Taxes in Zimbabwe The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year in Zimbabwe, as well as measures of administrative burden in paying taxes. Tax or mandatory Payments Notes on Time Statutory tax Tax Totaltax rate Notes on contribution (number) Payments (hours) rate base (% profit) TTR Value added tax (VAT) 12 68 15.0% value added Tax on interest 0 withheld 20.0% interest 0.00 income Tax on check 1 USD 12 per check 0.10 transactions (stamp duty) Road tax 4 fixed fee 0.20 (USD 160) Capital gains tax 1 5.0% capital gains 0.50 Standards development 2 0.5% gross salaries 0.60 levy AIDS levy 0 paid jointly 3.0% surcharge on 0.70 corporate income tax Manpower development 12 1.0% gross salaries 1.10 duty Fuel tax 1 included in 1.70 fuel price 52 Social security 0 paid jointly 96 4.0% gross salaries 4.50 contributions Property tax 12 various rates property 8.10 value Corporate income tax 4 78 30.0% taxable profit 22.80 (includes basic company tax) Totals 49 242 40.3 53 54 1. Benchmarking Trading Across Borders Regulations: Zimbabwe is ranked 168 overall for Trading Across Borders. Ranking of Zimbabwe in Trading Across Borders - Compared to good practice and selected economies: 55 The following table shows Trading Across Borders data for Zimbabwe compared to good practice and comparator economies: Good Practice Documents to Time to Cost to Documents to Time to Cost to export export (days) export (US$ import import (days) import (US$ Economies (number) per (number) per container) container) Denmark* 5 France 2 2 Malaysia 450 Singapore 4 439 Selected Economy Zimbabwe 7 53 3280 9 73 5101 Comparator Economies Angola 11 52 1850 8 49 2840 Botswana 6 28 3010 9 41 3390 Lesotho 6 31 1680 8 35 1610 Namibia 11 29 1686 9 24 1813 South Africa 8 30 1531 9 35 1807 Swaziland 9 18 1754 10 27 1849 * The following economies are also good practice economies for : Time to export (days): Estonia 56 2. Historical data: Trading Across Borders in Zimbabwe Trading Across Borders data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 168 168 Cost to export (US$ per container) 1879 2678 3280 3280 Cost to import (US$ per container) 2420 3999 5101 5101 Documents to export (number) 7 7 7 7 Documents to import (number) 9 9 9 9 Time to export (days) 52 53 53 53 Time to import (days) 67 73 73 73 3. The following graphs illustrate the Trading Across Borders sub indicators in Zimbabwe over the past 4 years: 57 58 Trading Across Borders in Zimbabwe These tables list the procedures necessary to import and export a standardized cargo of goods in Zimbabwe. The documents required to export and import the goods are also shown. Nature of Export Procedures (2010) Duration (days) US$ Cost Documents preparation 28 300 Customs clearance and technical control 4 180 Ports and terminal handling 4 300 Inland transportation and handling 17 2500 Totals 53 3280 Nature of Import Procedures (2010) Duration (days) US$ Cost Documents preparation 42 402 Customs clearance and technical control 4 350 Ports and terminal handling 8 349 Inland transportation and handling 19 4000 Totals 73 5101 59 Documents for Export and Import Export Bill of lading Certificate of origin Commercial invoice Customs export declaration Form SAD500 (Transit document) Packing list Pre-shipment inspection clean report of findings Import Bill of lading Cargo release order Certificate of origin Commercial invoice Customs import declaration Form SAD500 (Transit document) Import license Packing list Terminal handling receipts 60 61 1. Benchmarking Enforcing Contracts Regulations: Zimbabwe is ranked 110 overall for Enforcing Contracts. Ranking of Zimbabwe in Enforcing Contracts - Compared to good practice and selected economies: 62 The following table shows Enforcing Contracts data for Zimbabwe compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) claim) Economies Bhutan 0.1 Ireland 20 Singapore 150 Selected Economy Zimbabwe 38 410 113.1 Comparator Economies Angola 46 1011 44.4 Botswana 29 625 28.1 Lesotho 41 785 19.5 Namibia 33 270 35.8 South Africa 30 600 33.2 Swaziland 40 972 56.1 63 2. Historical data: Enforcing Contracts in Zimbabwe Enforcing Contracts data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 81 110 Procedures (number) 38 38 38 38 Time (days) 410 410 410 410 Cost (% of claim) 32.0 32.0 32.0 113.1 3. The following graphs illustrate the Enforcing Contracts sub indicators in Zimbabwe over the past 4 years: 64 Enforcing Contracts in Zimbabwe This topic looks at the efficiency of contract enforcement in Zimbabwe. Nature of Procedure (2010) Indicator Procedures (number) 38 Time (days) 410 Filing and service 14.0 Trial and judgment 247.0 Enforcement of judgment 149.0 Cost (% of claim)* 113.10 Attorney cost (% of claim) 100.0 Court cost (% of claim) 8.0 Enforcement Cost (% of claim) 5.1 65 Court information: Harare High Court, Herbert Chitepo * Claim assumed to be equivalent to 200% of income per capita. 66 67 1. Benchmarking Closing Business Regulations: Zimbabwe is ranked 156 overall for Closing a Business. Ranking of Zimbabwe in Closing Business - Compared to good practice and selected economies: 68 The following table shows Closing Business data for Zimbabwe compared to good practice and comparator economies: Good Practice Recovery rate Time (years) Cost (% of (cents on the estate) Economies dollar) Ireland 0.4 Japan 92.7 Singapore* 1 Selected Economy Zimbabwe 0.2 3.3 22 Comparator Economies Angola 8.4 6.2 22 Botswana 63.7 1.7 15 Lesotho 36.4 2.6 8 Namibia 41.5 1.5 15 South Africa 34.4 2.0 18 Swaziland 37.6 2.0 15 * The following economies are also good practice economies for : Cost (% of estate): Colombia, Kuwait, Norway 69 2. Historical data: Closing Business in Zimbabwe Closing a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 156 156 Time (years) 3.3 3.3 3.3 3.3 Cost (% of estate) 22 22 22 22 Recovery rate (cents on the dollar) 0.1 0.0 0.0 0.2 3. The following graphs illustrate the Closing Business sub indicators in Zimbabwe over the past 4 years: 70 Since 2004 Doing Business has been tracking reforms aimed at simplifying business regulations, strengthening property rights, opening access to credit and enforcing contracts by measuring their impact on 10 indicator sets . * Nearly 1,000 reforms have had an impact on these indicators. Doing Business 2011, covering June 2009 to June 2010, reports that 117 economies implemented 216 reforms to make it easier to start a business. 64% of economies measured by Doing Business have reformed this year, focusing on easing business start-up, lightening the tax burden, simplifying import and export regulations and improving credit information systems. The top 10 most-improved in Doing Business 2011 Dealing with Construction Trading Across Borders Positive Change Registering Property Enforcing Contracts Protecting Investors Starting a Business Closing a Business Negative Change Getting Credit Paying Taxes Permits Economy Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam * For Doing Business 2011 the Employing Workers indicator is not included in the aggregate ease of doing business ranking. 71 Summary of changes to business regulation in top 10 most improved economies in Doing Business 2011 and selected comparator economies. Angola Angola reduced the time for trading across borders by making investments in port infrastructure and administration. Brunei Darussalam Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. The introduction of an electronic customs system in Brunei Darussalam made trading easier. Cape Verde Cape Verde made start-up easier by eliminating the need for a municipal inspection before a business begins operations and computerizing the system for delivering the municipal license. Cape Verde eased property registration by switching from fees based on a percentage of the property value to lower fixed rates. Cape Verde abolished the stamp duties on sales and checks. Grenada Grenada eased business start-up by transferring responsibility for the commercial registry from the courts to the civil administration. The appointment of a registrar focusing only on property cut the time needed to transfer property in Grenada by almost half. Grenada's customs administration made trading faster by simplifying procedures, reducing inspections, improving staff training and enhancing communication with users. Hungary Hungary implemented a time limit for the issuance of building permits. Hungary reduced the property registration fee by 6% of the property value. Hungary simplified taxes and tax bases. Amendments to Hungary's bankruptcy law encourage insolvent companies to consider reaching agreements with creditors out of court so as to avoid bankruptcy. Kazakhstan Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized. Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities. Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports. Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation. Peru Peru eased business start-up by simplifying the requirements for operating licenses and creating an online one-stop shop for business registration. Peru streamlined construction permitting by implementing administrative reforms. Peru introduced fast-track procedures at the land registry, cutting by half the time needed to register property. Peru made trading easier by implementing a new web-based electronic data interchange system, risk-based inspections and payment deferrals. Rwanda Rwanda made dealing with construction permits easier by passing new building regulations at the end of April 2010 and implementing new time limits for the issuance of various permits. Rwanda enhanced access to credit by allowing borrowers the right to inspect their own credit report and mandating that loans of all sizes be reported to the central bank's public credit registry. Rwanda reduced the number of trade documents required and enhanced its joint border management procedures with Uganda and other neighbors, leading to an improvement in the trade logistics environment. Swaziland Swaziland strengthened investor protections by requiring greater corporate disclosure, higher standards of accountability for company directors and greater access to corporate information for minority investors. Swaziland reduced the time to import by implementing an electronic data interchange system for customs at its border posts. Tajikistan Tajikistan made starting a business easier by creating a one-stop shop that consolidates registration with the state and the tax authority. Tajikistan strengthened investor protections by requiring greater corporate disclosure in the annual report and greater access to corporate information for minority investors. Tajikistan lowered its corporate income tax rate. 72 Vietnam Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors. Zambia Zambia eased business start-up by eliminating the minimum capital requirement. Zambia eased trade by implementing a one-stop border post with Zimbabwe, launching web-based submission of customs declarations and introducing scanning machines at border posts. Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. Zimbabwe Zimbabwe eased business start-up by reducing registration fees and speeding up the name search process and company and tax registration. Zimbabwe reduced the corporate income tax rate from 30% to 25%, lowered the capital gains tax from 20% to 5% and simplified the payment of corporate income tax by allowing quarterly payment through commercial banks. 73 74