Doing Business 2018 Egypt, Arab Rep. Economy Pro le of Egypt 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 Egypt, Arab in Flexibility Rep. 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 Middle East & North DB 2018 Rank Region 190 1 Africa Egypt, Arab Rep. Income Category Lower middle income 128 DB 2018 Distance to Frontier (DTF) Population 95,688,681 0 100 GNI Per Capita (US$) 3,460 56.22 City Covered Cairo DB 2018 Distance to Frontier (DTF) 0 100 62.50: Saudi Arabia (Rank: 92) 60.58: Jordan (Rank: 103) 56.72: Regional Average (Middle East & North Africa) 56.22: Egypt, Arab Rep. (Rank: 128) 54.67: Lebanon (Rank: 133) Page 3   aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Egypt, Arab Rep. Ease of Doing Business in Middle East & North DB 2018 Rank Region 190 1 Africa Egypt, Arab Rep. Income Category Lower middle income 128 DB 2018 Distance to Frontier (DTF) Population 95,688,681 0 100 GNI Per Capita (US$) 3,460 56.22 City Covered Cairo DB 2018 Distance to Frontier (DTF) 0 100 62.50: Saudi Arabia (Rank: 92) 60.58: Jordan (Rank: 103) 56.72: Regional Average (Middle East & North Africa) 56.22: Egypt, Arab Rep. (Rank: 128) 54.67: Lebanon (Rank: 133) 41.55: Syrian Arab Republic (Rank: 174) 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 - Egypt 1 28 55 66 81 82 89 90 Rank 103 109 119 115 136 160 167 170 163 190 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 - Egypt 100 84.53 80 71.43 71.24 60 55.50 55.00 DTF 50.00 50.67 42.23 42.75 38.89 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:-0.24 Change:-1.00 Change:0.00 Investors Change:-0.70 Borders Change:0.00 Change:-0.62 Change:+0.02 Permits Change:+3.33 Change:0.00 Change:+0.20 Starting a Business Page 4   a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:-0.24 Change:-1.00 Change:0.00 Investors Change:-0.70 Borders Change:0.00 Change:-0.62 Change:+0.02 Permits Change:+3.33 Change:0.00 Doing Business 2018 Egypt, Arab Rep. Change:+0.20 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 Egypt, Arab Rep. Standardized Company Legal form Sharikat that Massouliyyah Mahdoodah Paid-in minimum capital requirement EGP 0 City Covered Cairo Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Procedure – Men (number) 8 7.7 4.9 1.00 (New Zealand) Time – Men (days) 14 18.6 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 7.4 18.7 3.1 0.00 (United Kingdom) Procedure – Women (number) 9 8.4 4.9 1.00 (New Zealand) Time – Women (days) 15 19.3 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 7.4 18.7 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 9.9 8.7 0.00 (113 Economies) Figure – Starting a Business in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 84.53: Egypt, Arab Rep. (Rank: 103) 84.40: Jordan (Rank: 105) 82.05: Regional Average (Middle East & North Africa) 80.43: Syrian Arab Republic (Rank: 133) 80.04: Saudi Arabia (Rank: 135) 78.17: Lebanon (Rank: 143) 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 Egypt, Arab Rep. – Procedure, Time and Cost Time Cost 8 14 7 12 ost (% of income per capita) 6 10 5 Time (days) 8 4 6 3 Page 6   4 2 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Egypt, Arab Rep. Figure – Starting a Business in Egypt, Arab Rep. – Procedure, Time and Cost Time Cost 8 14 7 12 Cost (% of income per capita) 6 10 5 Time (days) 8 4 6 3 4 2 2 1 0 0 1 2 3 4 5 6 7 8 9 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 Egypt, Arab Rep. – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs  1 APPLIES TO WOMEN ONLY: Obtain husband's permission to leave the 1 day No charge home Agency : Home The wife has to obey her husband. She loses her right to maintenance if she leaves the marital home. According to the Personal Status law of 1985, Maintenance is not due to the wife who leaves the marital home without her husband’s permission. However, she does not lose her right to alimony if she leaves the domicile in the cases that are permitted by the legislature on the grounds of custom or necessity. For example, she has the right to go out for a lawful job, provided that she does not misuse this right; meaning it does not con ict with the family’s interest, and her husband has not asked her to abstain from going out to work. If it is established that her going out to work does not go against family interest, the husband’s asking her not to work is irrelevant. This is also the case if the husband knew and accepted at the time of contracting the marriage that his wife holds a job. 2 Obtain a Certi cate of Non-Confusion from the Commercial Registry to 1 day EGP 25 reserve the company name Agency : General Authority for Free Zones and Investment (GAFI) According to Article 17 of Law No. 159/198 entrepreneurs must reserve a company name. This is done at the General Authority for Free Zones and Investment (GAFI) one-stop shop. The Incorporation Department will rst check the legality of the proposed company name. If the name is deemed to be legally admissible, the entrepreneur will then go upstairs to the Commercial Registry o ce in the GAFI one-stop shop to pay the required Page 7   fees and obtain the certi cate of non-confusion (shahadat adam al-iltibas) (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Egypt, Arab Rep. Details – Starting a Business in Egypt, Arab Rep. – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs  1 APPLIES TO WOMEN ONLY: Obtain husband's permission to leave the 1 day No charge home Agency : Home The wife has to obey her husband. She loses her right to maintenance if she leaves the marital home. According to the Personal Status law of 1985, Maintenance is not due to the wife who leaves the marital home without her husband’s permission. However, she does not lose her right to alimony if she leaves the domicile in the cases that are permitted by the legislature on the grounds of custom or necessity. For example, she has the right to go out for a lawful job, provided that she does not misuse this right; meaning it does not con ict with the family’s interest, and her husband has not asked her to abstain from going out to work. If it is established that her going out to work does not go against family interest, the husband’s asking her not to work is irrelevant. This is also the case if the husband knew and accepted at the time of contracting the marriage that his wife holds a job. 2 Obtain a Certi cate of Non-Confusion from the Commercial Registry to 1 day EGP 25 reserve the company name Agency : General Authority for Free Zones and Investment (GAFI) According to Article 17 of Law No. 159/198 entrepreneurs must reserve a company name. This is done at the General Authority for Free Zones and Investment (GAFI) one-stop shop. The Incorporation Department will rst check the legality of the proposed company name. If the name is deemed to be legally admissible, the entrepreneur will then go upstairs to the Commercial Registry o ce in the GAFI one-stop shop to pay the required fees and obtain the certi cate of non-confusion (shahadat adam al-iltibas) bearing the o cial government stamp (khetm el nesr). 3 Obtain a Bank Certi cate from an authorized bank 1 day EGP 100 Agency : Any authorized Bank The Bank of Alexandria branch at the General Authority for Free Zones and Investment (GAFI) issues and delivers the certi cate in 1–2 days. The cost to open a bank account and obtain a bank certi cate is around 100 EGP, depending on the bank. This certi cate can also be obtained from other authorized banks. 4 Submit documents to the Department of Companies, obtain invoice and 1 day see comment pay fees Agency : General Authority for Free Zones and Investment (GAFI) The founder submits the company documents at the reception desk of GAFI, where they are reviewed immediately by a lawyer. These documents include: 1. Original certi cate of non-confusion. 2. Original Bank Certi cate of opening an account with an authorized bank. 3. A copy of the powers of attorney from the founders to their representative. 4. A copy of the founders' I.D. cards or passports. 5. Original certi cate indicating that the company's auditor is listed at the Registry of accountants and auditors. 6. The application provided by GAFI. Page 8   depending on the bank. This certi cate can also be obtained from other Businessbanks. Doing authorized 2018 Egypt, Arab Rep. 4 Submit documents to the Department of Companies, obtain invoice and 1 day see comment pay fees Agency : General Authority for Free Zones and Investment (GAFI) The founder submits the company documents at the reception desk of GAFI, where they are reviewed immediately by a lawyer. These documents include: 1. Original certi cate of non-confusion. 2. Original Bank Certi cate of opening an account with an authorized bank. 3. A copy of the powers of attorney from the founders to their representative. 4. A copy of the founders' I.D. cards or passports. 5. Original certi cate indicating that the company's auditor is listed at the Registry of accountants and auditors. 6. The application provided by GAFI. 7. Stamped articles of association. A registry employee reviews the documents, and issues a detailed invoice for all fees associated with the company's establishment. Fees for company establishment: • Notary public fee: 0.25% of capital ( minimum of EGP 10 and a maximum of EGP 1,000 ) • Establishment fees: 0.1% of capital (minimum of EGP 100 and maximum of EGP 1,000 according to Article 17 (d) of the Companies Law) • Commercial Syndicate fee: EGP 125 (for capital less than or equal to EGP 500,000) or EGP 250 (for capital more than EGP 500,000) • Publication fee: EGP 150 (for a limited liability company in Arabic) or EGP 300 (for a limited liability company in Arabic and English) • Chamber of Commerce fees: 0.2% of capital (minimum of EGP 24 and maximum of EGP 2,000) • Commercial registration: EGP 56 • Issuance of operation certi cate: 0.2% of capital (minimum of EGP 24 and maximum of EGP 2,000) plus EGP 29 5 Notarize company contracts 1 day no charge Agency : Investment Notarization O ce at the General Authority for Free Zones and Investment (GAFI) The articles of association must be registered and certain documents deposited at the Investment Notarization O ce on the rst oor of the GAFI one-stop shop. No stamp duty is levied, according to the amendments (published on July 1, 2006) to the Stamp Duty Law (No. 111 of 1980). Required are the original copies of the articles of association and the powers of attorney. 6 Obtain the certi cate of incorporation 3 days no charge Agency : General Authority for Free Zones and Investment (GAFI) After the fees are paid, the company submits the articles of association to the GAFI follow up unit. On March 2016, the government of the Arab Republic of Egypt introduced the Follow-up Unit at the one-stop shop. The unit is responsible for notarizing the company’s contract in addition to liaising with the tax o ce and the labor authority on behalf of the company. The competent authority must ratify them and issue a certi cate of Page 9   incorporation approving the establishment of the company. The follow up 2006) to the Stamp Duty Law (No. 111 of 1980). Required are the original Doing copies of the Business of association articles Egypt, 2018 Arab and the powers of attorney. Rep. 6 Obtain the certi cate of incorporation 3 days no charge Agency : General Authority for Free Zones and Investment (GAFI) After the fees are paid, the company submits the articles of association to the GAFI follow up unit. On March 2016, the government of the Arab Republic of Egypt introduced the Follow-up Unit at the one-stop shop. The unit is responsible for notarizing the company’s contract in addition to liaising with the tax o ce and the labor authority on behalf of the company. The competent authority must ratify them and issue a certi cate of incorporation approving the establishment of the company. The follow up unit will then be in charge of following the application through the department of taxes, Companies Chamber of Commerce and National Authority of Social Insurance. Within 3 days the founders can collect the certi cate of incorporation in addition to the tax registration ID. A le for the company will also be opened at the National Authority of Social Insurance. 7 Register for Taxes 2 days no charge Agency : Investment Tax O ce at GAFI Within 30 days of incorporation, the Company must complete tax registration and submit a request at the Investment Tax O ce in GAFI on the rst oor to obtain a tax card. The latter o ce will send the request to the General Department of Taxation at the Tax Authority for reviewing and extracting the Tax Card within two to three days after submitting the request. In order to obtain a Tax Card, the following documents shall be submitted to the competent Tax Authority: 1) the article of association; 2) the commercial registration; 3) a POA issued by the employer 4) a lease contract valid for at least one (1) year with a date certain from the Notary Public. 8 Register for VAT 2 days no charge Agency : Egyptian Tax Authority If a company's turnover is higher than EGP 500,000 per year, the company must obtain a VAT certi cate thanks to the VAT law no. 67/2016. Before the passing of the VAT law, companies needed to register for GST according to the GST No. 11/1991. In order to obtain a VAT Certi cate, the following documents shall be submitted to the competent Tax Authority: 1) the article of association; 2) the commercial registration 3) a POA issued by the employer; 4) a lease contract valid for at least one (1) year with a date certain from the Notary Public; and 5) the Tax Card 9 Open a company le and Register employees with the National 3 days no charge Authority of Social Insurance Agency : National Authority of Social Insurance Social insurance provides compensation for disability, retirement (pension), unemployment, and work-related injuries. By law, employers are required to subscribe to the social insurance system. Otherwise, they may be subject to sanctions. The following documents must be submitted to the competent Page 10   authority’s o ce: Notary Public; and Doing 5) the Tax Card Business 2018 Egypt, Arab Rep. 9 Open a company le and Register employees with the National 3 days no charge Authority of Social Insurance Agency : National Authority of Social Insurance Social insurance provides compensation for disability, retirement (pension), unemployment, and work-related injuries. By law, employers are required to subscribe to the social insurance system. Otherwise, they may be subject to sanctions. The following documents must be submitted to the competent authority’s o ce: • Company’s commercial registration • Company’s tax card. • Company’s articles of incorporation. • Deed or lease agreement for company premises. • Employer to ll in Form No. 2. • Employer’s bank signature certi cate. • Employer’s graduation certi cate. • Employees’ to ll in Form No. 1. • Employees’ copy of identi cation card. • Employee’s graduation certi cate. • Employees’ birth certi cate (copy) if they do not have a social insurance number; or Form No. 6 for clearance/termination from employees’ previous jobs. The company premises are then subject to inspection by relevant authorities - such as the National Authority for Social Insurance and GAFI. Inspection takes place in practice only if there is any complaint led against the company, or suspicion that the company is an image organization that does not actually conduct business as claimed in its submitted documents. Companies registering for sales tax will undergo inspection. Applies to women only. Takes place simultaneously with previous procedure. 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 Page 11   not assumed to have any other employees who are technical or licensed Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Egypt, Arab Rep. 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 12   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Egypt, Arab Rep. Standardized Warehouse Estimated value of warehouse EGP 1,411,914.00 City Covered Cairo Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Procedures (number) 19 16.2 12.5 7.00 (Denmark) Time (days) 172 132.1 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 1.9 4.3 1.6 0.10 (5 Economies) Building quality control index (0-15) 14.0 11.8 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.52: Saudi Arabia (Rank: 38) 71.43: Egypt, Arab Rep. (Rank: 66) 65.74: Jordan (Rank: 110) 59.84: Regional Average (Middle East & North Africa) 59.66: Lebanon (Rank: 142) 0.00: Syrian Arab Republic (Rank: 186) 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 Egypt, Arab Rep. – Procedure, Time and Cost Time Cost 0.8 160 0.7 140 Cost (% of warehouse value) 0.6 120 0.5 Time (days) 100 0.4 80 0.3 60 40 0.2 20 0.1 0 0 1 2 3 *4 5 *6 7 8 9 10 11 12 13 14 15 * 16 * 17 18 19 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 13   component indicators. Doing Business 2018 Egypt, Arab Rep. Figure – Dealing with Construction Permits in Egypt, Arab Rep. – Procedure, Time and Cost Time Cost 0.8 160 0.7 140 Cost (% of warehouse value) 0.6 120 0.5 Time (days) 100 0.4 80 0.3 60 40 0.2 20 0.1 0 0 1 2 3 *4 5 *6 7 8 9 10 11 12 13 14 15 * 16 * 17 18 19 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 Egypt, Arab Rep. and comparator economies – Measure of Quality 16 14.0 14 13.0 12.0 11.8 12 11.0 Index score 10 8 6 4 2 0 no practice Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Details – Dealing with Construction Permits in Egypt, Arab Rep. – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Apply for the site validity certi cate 1 day EGP 200 Agency : Municipal Authority BuildCo applies at the Municipal Authority to obtain the site validity certi cate, which proves that the site conforms to the planning and building requirements. The request identi es the site, the address and the borders of the land. A copy of the applicant's national ID and receipt of the payment must be attached to the request. Article 19 of Law 119/2008 sets a ceiling of EGP 200 for the fee related to the obtainment of the site validity certi cate. This ceiling can be increased at no more than 3% every year. These are the documents that are needed for this request: Page 14   (i) Root of title to the subject parcel of land Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Doing Business 2018 Egypt, Arab Rep. Details – Dealing with Construction Permits in Egypt, Arab Rep. – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Apply for the site validity certi cate 1 day EGP 200 Agency : Municipal Authority BuildCo applies at the Municipal Authority to obtain the site validity certi cate, which proves that the site conforms to the planning and building requirements. The request identi es the site, the address and the borders of the land. A copy of the applicant's national ID and receipt of the payment must be attached to the request. Article 19 of Law 119/2008 sets a ceiling of EGP 200 for the fee related to the obtainment of the site validity certi cate. This ceiling can be increased at no more than 3% every year. These are the documents that are needed for this request: (i) Root of title to the subject parcel of land (ii) Survey plan (3 copies required) (iii) O cial receipt for application fees of two hundred Egyptian Pound (iv) A copy of the applicant's national ID (v) Cell phone contact and e-mail addresses where applicable 2 Receive on-site inspection from the Municipality 1 day no charge Agency : Municipality Before issuing the site validity certi cate, an inspector from the Municipal Engineering Department inspects the construction site to verify that there are no pre-existing buildings or illegal demolition on the plot of land and to check the data to ensure there are no irregularities on the plot of land. 3 Obtain site validity certi cate from the Municipality 15 days no charge Agency : Municipality The site validity certi cate is issued after the inspection. According to Article 110 of Law 144/2009, the certi cate must be issued within 1 week after the submission of the application. If there are any hindrances in the site, the administrative body shall issue a statement indicating the hindrances that block the issuance of the site validity certi cate. 4 Obtain a geotechnical study / soil test 9 days EGP 4,500 Agency : Private sector BuildCo will request a soil test for the structural calculations for the foundation. 5 Request and obtain building permit from the Municipality 30 days EGP 2,638 Agency : Municipality To obtain a building permit from the Municipal Authority, the engineer of BuildCo must le the following documents, along with the clearances described in the previous procedures: a. The original ownership contract of the plot of land (only copy to be provided, the original is viewed by the o cer, but returned to investor); b. A copy of the national ID of the engineer (who is submitting the le); c. The engineer's authorization to act on behalf of the owner; d. The construction value form, approved by the engineer; e. The site validity certi cate; Page 15   f. A receipt attesting the payment of fees for examination of the drawings BuildCo will request a soil test for the structural calculations for the Doing foundation. Business 2018 Egypt, Arab Rep. 5 Request and obtain building permit from the Municipality 30 days EGP 2,638 Agency : Municipality To obtain a building permit from the Municipal Authority, the engineer of BuildCo must le the following documents, along with the clearances described in the previous procedures: a. The original ownership contract of the plot of land (only copy to be provided, the original is viewed by the o cer, but returned to investor); b. A copy of the national ID of the engineer (who is submitting the le); c. The engineer's authorization to act on behalf of the owner; d. The construction value form, approved by the engineer; e. The site validity certi cate; f. A receipt attesting the payment of fees for examination of the drawings and details; g. An overall drawing of the site (scale minimum 1:1,000) that indicates (a) the boundaries and dimensions of the land for which the permit is required, together with the total land area; and (b) the part on which construction is requested, as well as the facing roads and their widths. h. Three copies of the architectural drawings for the plans and elevations; a vertical section, indicating the building height and the road's zero level and the structural drawings of the foundations, columns, and the reinforced ceilings. All drawings must be signed by an accredited engineer. The Building Law establishes a 30-day statutory time limit for issuing building permits. This time limit can be extended in case the Municipal Authority considers the application incomplete. The engineer of the Municipal Authority reviews the building permit le in order to check its completeness and reviews the drawings to ensure that they comply with the site validity certi cate. 6 Hire an external engineer to supervise the construction site 1 day EGP 2,000 Agency : Independent licensed engineer BuildCo must hire an independent engineer to supervise the project. The hired engineer must prove that he is a liated with the syndicate of licensed engineer. 7 Obtain approval of the execution supervision certi cate from the 1 day EGP 312 Syndicate of Licensed Engineers Agency : Syndicate of Licensed Engineers BuildCo must obtain the approval of the Execution Supervision Certi cate by the local branch of the Syndicate of Engineers. The approval certi es that the engineer is in fact licensed and that s/he is not supervising too many projects. 8 Inform the Municipality before beginning construction 1 day no charge Agency : Municipality BuildCo sends a letter to the Municipal Authority to inform them that construction works will commence. The letter must be sent at least 15 days prior to starting construction. BuildCo must attach the following documents to the letter: (i) the contractor's contract, approved by the Egyptian Federation for Construction and Building Contractors, if applicable; (ii) and the execution supervision certi cate, approved by the Syndicate of Engineers. 9 Receive set-back inspection from the Municipality 1 day no charge Agency : Municipality Page 16   The Municipality will inspect the construction site on a regular basis. Each the execution supervision certi cate, approved by the Syndicate of Doing Engineers. Business 2018 Egypt, Arab Rep. 9 Receive set-back inspection from the Municipality 1 day no charge Agency : Municipality The Municipality will inspect the construction site on a regular basis. Each inspection takes a day at most. 10 Receive on-site inspection from the Municipality - II 1 day no charge Agency : Municipality The Municipality will inspect the construction site on a regular basis. Each inspection takes a day at most. 11 Receive on-site inspection from the Municipality - III 1 day no charge Agency : Municipality The Municipality will inspect the construction site on a regular basis. Each inspection takes a day at most. 12 Obtain approval of the construction conformity certi cate from the 1 day EGP 300 Syndicate of Licensed Engineers Agency : Syndicate of Licensed Engineers The supervising engineer has to submit a certi cate stating that the building has been built in accordance with the relevant laws and regulations. This certi cate must be signed by the supervising engineer and approved by the Syndicate of Licensed Engineers. 13 Receive on-site inspection from the Civil Defense and Fire ghting 15 days no charge Authority Agency : Civil Defense and Fire ghting Authority After the construction has been completed, the Civil Defense and Fire ghting Authority inspects the building to check if it complies with the re safety regulations. 14 Submit the construction conformity certi cate and receive nal 15 days no charge inspection from the Municipal Authority Agency : Municipality After receiving the certi cate from the supervising engineer upon completion of work, the Municipality does a nal inspection to certify that the warehouse conforms to the speci cations outlined in the building permit. 15 Register the building with the Real Estate Registry 60 days EGP 2,000 Agency : Real Estate Registry BuildCo must submit a building registration form, the building permit for the warehouse, and the primary purchase contract of the land on which the warehouse had been built. Law 83 of 2006 amended Decree No. 70 (1964) to decrease registration fees which are now a at fee of EGP 2,000.00 rather than a percentage of the building value. Request and Obtain sewerage connection 30 days EGP 5,000 16 Agency : Greater Cairo Sanitary Drainage Company Request water connection 1 day no charge 17 Agency : Greater Cairo Water Authority Once the Municipality has approved that the building was built according to plans and can be connected to utilities, the applicant can request the nal Page 17   water connection. Request and Obtain sewerage connection 30 days EGP 5,000 16 Agency : Greater Cairo Sanitary Drainage Company Doing Business 2018 Egypt, Arab Rep. Request water connection 1 day no charge 17 Agency : Greater Cairo Water Authority Once the Municipality has approved that the building was built according to plans and can be connected to utilities, the applicant can request the nal water connection. BuildCo submits an application to the competent water authority, along with the original license and a copy of the building permit. 18 Receive site inspection by utilities to assess work and cost 7 days no charge Agency : Greater Cairo Water Authority Within a week of the water connection request, the team will do a technical assessment of the work to be done. They will do a site inspection. 19 Obtain water connection 22 days EGP 10,000 Agency : Greater Cairo Water Authority Once payment is done, within 22 days on average, the work will be completed. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Egypt, Arab Rep. – Measure of Quality Answer Score Building quality control index (0-15) 14.0 Quality of building regulations index (0-2) 2.0 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 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; 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. 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 by 1.0 construction? (0-2) external engineer or rm; Unscheduled inspections; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Page 18   Takes place simultaneously with previous procedure. Doing Business 2018 Egypt, Arab Rep. Details – Dealing with Construction Permits in Egypt, Arab Rep. – Measure of Quality Answer Score Building quality control index (0-15) 14.0 Quality of building regulations index (0-2) 2.0 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 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; 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. 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 by 1.0 construction? (0-2) external engineer or rm; Unscheduled inspections; Inspections at 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 Page 19   charge of the Liability Doing 2018 regimes and insurance Business index Egypt, Arab(0-2) Rep. 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 Professional in 1.0 possible structural aws or problems in the building once it is in use (Latent Defect charge of the Liability Insurance or Decennial Insurance)? (0-1) supervision; Construction company; Insurance is commonly taken in practice. 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. 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. 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. Page 20   architect or engineer. Doing Business 2018 Egypt, Arab Rep. 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 warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes 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 Egypt, Arab Rep. Standardized Connection Price of electricity (US cents per kWh) 12.1 Name of utility South Cairo Electricity Distribution Company (SCEDC) City Covered Cairo Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Procedures (number) 5 4.8 4.7 2 (United Arab Emirates) Time (days) 53 81.4 79.1 10 (United Arab Emirates) Cost (% of income per capita) 324.7 780.3 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 3 4.2 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 83.33: Jordan (Rank: 40) 79.88: Saudi Arabia (Rank: 59) 71.24: Egypt, Arab Rep. (Rank: 89) 67.21: Regional Average (Middle East & North Africa) 60.07: Lebanon (Rank: 123) 51.99: Syrian Arab Republic (Rank: 153) 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 Egypt, Arab Rep. – Procedure, Time and Cost Time Cost 300 50 250 Cost (% of income per capita) 40 200 Time (days) 30 150 20 100 10 50 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 Egypt, Arab Rep. Figure – Getting Electricity in Egypt, Arab Rep. – Procedure, Time and Cost Time Cost 300 50 250 Cost (% of income per capita) 40 200 Time (days) 30 150 20 100 10 50 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 Egypt, Arab Rep. and comparator economies – Measure of Quality 8 7 7 6 6 Index score 5 4.2 4 3 3 2 1 0 0 0 Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Details – Getting Electricity in Egypt, Arab Rep. – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to SCEDC and await estimate 18 calendar days EGP 0 Agency : South Cairo Electric Distribution Company (SCEDC) The client must submit the following documents to formally request an electricity connection: • Copy of the national ID • Copy of the tax card (for commercial and industrial activities) • Trade License • Copy of lease agreement (or ownership document) • Copy of the property title (proof of ownership of the land) • Copy of the building permit Page 23   • Ground oor designs of building Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Doing Business 2018 Egypt, Arab Rep. Details – Getting Electricity in Egypt, Arab Rep. – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to SCEDC and await estimate 18 calendar days EGP 0 Agency : South Cairo Electric Distribution Company (SCEDC) The client must submit the following documents to formally request an electricity connection: • Copy of the national ID • Copy of the tax card (for commercial and industrial activities) • Trade License • Copy of lease agreement (or ownership document) • Copy of the property title (proof of ownership of the land) • Copy of the building permit • Ground oor designs of building • Letter from district o ce clearing electrical connection The technicians review the request and determine which distribution network is closest to the warehouse. After the utility has determined the nearest network and paid the fees, the client will need to apply for an excavation permit at the district. 2 Obtain external inspection and estimate of connection fees from SCEDC 1 calendar day EGP 0 Agency : South Cairo Electric Distribution Company (SCEDC) A SCEDC electrical engineer will inspect the site. The purpose of the inspection is to check whether there is enough capacity to provide the power needed and whether the property has any speci c requirements. The client does not have to be present at the inspection. Following that, the inspector prepares a report with an estimate of the connection fees. No inspection of the entire internal wiring is carried out during the process. The client must pay the estimated fees within one month, after which the estimate o er expires. 3 Obtain excavation permit from district 12 calendar days EGP 1,750 Agency : District O ce The client needs to submit a copy of the building permit, a copy of the ID card, and a tax statement. 4 Obtain external works from SCEDC 17 calendar days EGP 77,000 Agency : South Cairo Electric Distribution Company (SCEDC) External works can start when the client has paid the connection fees at the utility’s cashier and submitted the excavation permit to the utility. For loads below 500 kVA, the customer does not need to buy or pay for any material required for the external works or connection. Thus, whether an upgrade of the system (transformer is replaced with one of higher capacity) is needed or not will not a ect the total cost. However, if a substation is needed, the customer will be asked to build the room. For the electricity connection considered in the case study, there is no need for a substation. The external works will consist of laying out underground cables to the closest point of supply 5 Sign supply contract and receive meter installation from SCEDC 6 calendar days EGP 12,953.15 Page 24   Agency : South Cairo Electric Distribution Company (SCEDC) for a substation. The external works will consist of laying out underground Doing cables to the Business closest point 2018 Egypt,of supply Arab Rep. 5 Sign supply contract and receive meter installation from SCEDC 6 calendar days EGP 12,953.15 Agency : South Cairo Electric Distribution Company (SCEDC) To request a meter installation, the customer must ll out a separate application form with the South Cairo Electricity Distribution Company (SCEDC). The application form must be accompanied by a copy of the national ID, the property details, and identi cation number of the metallic board. When the external works have been completed, the client signs a supply contract. The utility then installs the meter. Takes place simultaneously with previous procedure. Details – Getting Electricity in Egypt, Arab Rep. – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 3 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 2.7 System average interruption frequency index (SAIFI) 2.8 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 0 Does the distribution utility use automated tools to monitor outages? No Mechanisms for restoring service (0-1) 0 Does the distribution utility use automated tools to restore service? No 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) 0 Are e ective tari s available online? Yes Link to the website, if available online http://egyptera.org/ ar/t3reefa.aspx Are customers noti ed of a change in tari ahead of the billing cycle? No 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. Page 25   Takes place simultaneously with previous procedure. Doing Business 2018 Egypt, Arab Rep. Details – Getting Electricity in Egypt, Arab Rep. – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 3 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 2.7 System average interruption frequency index (SAIFI) 2.8 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 0 Does the distribution utility use automated tools to monitor outages? No Mechanisms for restoring service (0-1) 0 Does the distribution utility use automated tools to restore service? No 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) 0 Are e ective tari s available online? Yes Link to the website, if available online http://egyptera.org/ ar/t3reefa.aspx Are customers noti ed of a change in tari ahead of the billing cycle? No 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. What the indicators measure Case study assumptions 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 Egypt, Arab Rep. 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 EGP 1,411,914.00 City Covered Cairo Page 27   Egypt, Arab Middle East & OECD high Doing Business 2018 Egypt, Arab Rep. Standard Property Transfer Property value EGP 1,411,914.00 City Covered Cairo Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Procedures (number) 8 5.7 4.6 1.00 (4 Economies) Time (days) 75 30.3 22.3 1.00 (3 Economies) Cost (% of property value) 1.1 6.0 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 7.0 13.4 22.7 29.00 (Singapore) Figure – Registering Property in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 81.19: Saudi Arabia (Rank: 24) 66.40: Jordan (Rank: 72) 60.91: Regional Average (Middle East & North Africa) 59.93: Lebanon (Rank: 102) 55.50: Egypt, Arab Rep. (Rank: 119) 46.88: Syrian Arab Republic (Rank: 155) 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 Egypt, Arab Rep. – Procedure, Time and Cost Time Cost 1.2 70 1 60 Cost (% of property value) 50 0.8 Time (days) 40 0.6 30 0.4 20 0.2 10 0 0 1 2 3 4 5 6 7 8 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 Egypt, Arab Rep. Figure – Registering Property in Egypt, Arab Rep. – Procedure, Time and Cost Time Cost 1.2 70 1 60 Cost (% of property value) 50 0.8 Time (days) 40 0.6 30 0.4 20 0.2 10 0 0 1 2 3 4 5 6 7 8 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 Egypt, Arab Rep. and comparator economies – Measure of Quality 25 22.5 20 16.0 Index score 15 13.4 10.0 10.5 10 7.0 5 0 Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Details – Registering Property in Egypt, Arab Rep. – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain property tax statement from the Tax authority 1 day EGP 2.25 (fast track Agency : Local Propety Tax Authority option) Prior to transferring any property, it is required to obtain an o cial property tax statement from the Property Tax Authority o ce. This tax certi cate is part of this application at the Land registry. This is a national requirement based on the Law 114 of 1946. The purpose of this document is to serve as a proof that the property has undergone a tax assessment and is registered at the property tax authority. It is a proof that there is no mortgages or other liens on this property. 2 Request for registration presented by the buyer to the Real Estate 1 day EGP 2000 Page 29   Registry (registration fee) Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Doing Business 2018 Egypt, Arab Rep. Details – Registering Property in Egypt, Arab Rep. – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain property tax statement from the Tax authority 1 day EGP 2.25 (fast track Agency : Local Propety Tax Authority option) Prior to transferring any property, it is required to obtain an o cial property tax statement from the Property Tax Authority o ce. This tax certi cate is part of this application at the Land registry. This is a national requirement based on the Law 114 of 1946. The purpose of this document is to serve as a proof that the property has undergone a tax assessment and is registered at the property tax authority. It is a proof that there is no mortgages or other liens on this property. 2 Request for registration presented by the buyer to the Real Estate 1 day EGP 2000 Registry (registration fee) Agency : Real Estate Registry Following negotiations and an agreement on all material terms of the contract, the buyer pays the seller the requested price, and the buyer subsequently goes to the Real Estate Registry to request registration. At this juncture, the buyer pays the 2.000 EGP registration fee for the property over 300 m2. The request is subsequently internally transferred to the Egyptian Surveying Authority to complete a survey of the land. 3 Site inspection by the Egyptian Surveying Authority 30 days Paid in Procedure 2 Agency : Egyptian Surveying Authority ("ESA") The Egyptian Surveying Authority inspects the property, conducts a survey, and prepares a report "Kashf El Tahdid" of its ndings. The report contains a description of the property, its boundaries and its surface area. The report is subsequently delivered to the Measurement Department. 4 Obtain the Measurement Department’s approval of the inspection 21 days no cost report and the Real Estate Registry’s acceptance of the request for registration Agency : Measurement Department/Real Estate Registry Following the Egyptian Surveying Authority’s inspection, the report produced (called Kashf Tahdeed) must be approved by the Measurement Department. Additionally, the notary public at the Real estate registry will review the measurement report. It is only after the second review that the notary will approve the document to allow the lawyer to prepare the contract. The entire report is then internally transferred to the Real Estate Registry for acceptance of (1) the inspection report and (2) the request for registration. The Real Estate Registry also conducts an engineering and legal review of the request and grants approval by stamping the documents “approved to be authenticated” (maqbul " ‫)" ﻣﻘﺒﻮﻝ ﻟﻠﺸﻬﺮ‬. The approved documents are then released to the parties. At this stage, the parties also obtain a special, stamped form from the Real Estate Registry, on which they will subsequently print their contract. 5 The nal contract is presented to the lawyer’s syndicate for 1 day 1% of property value veri cation/rati cation (but no more than Agency : Egyptian Bar Association EGP 25,000) The parties’ lawyer drafts contract (called Mashroaa Mohrar) on the special Page 30   form obtained from the Real Estate Registry. The parties/their lawyer parties also obtain a special, stamped form from the Real Estate Registry, on Doing which they will Business 2018 Egypt, print subsequently Arabtheir Rep. contract. 5 The nal contract is presented to the lawyer’s syndicate for 1 day 1% of property value veri cation/rati cation (but no more than Agency : Egyptian Bar Association EGP 25,000) The parties’ lawyer drafts contract (called Mashroaa Mohrar) on the special form obtained from the Real Estate Registry. The parties/their lawyer subsequently deliver(s) the contract to the lawyers syndicate for veri cation: the lawyer who drafts the contract ascribes his syndicate identi cation number to the form, and the lawyers’ syndicate must verify/certify that the involved lawyer is indeed registered with the syndicate. 6 Obtaining the Real Estate Registry’s approval of the contract (Mashroaa 10 days no cost Mohrar) Agency : Real Estate Registry After collecting the contract from the Lawyer’s Syndicate, the parties then deliver the contract (Mashroaa Mohrar) to the Real Estate Registry for review and if it accepted, the documents will be stamped by the Real Estate Registry as “approved to be registered.” 7 Authentication before the Notary Public 1 day no cost Agency : Notary Public After receiving the contract (Mashroaa Mohrar) stamped “approved to be registered” by the Real Estate Registry, the parties proceed before the competent Notary Public to sign and authenticate the contract. 8 The buyer delivers the contract to the Real Estate Registry for 10 days no cost “legalization of the contract” and the registration number is delivered Agency : Real Estate Registry The buyer delivers the contract to the Real Estate Registry for review of the notarized contract. The Real Estate Registry will make a nal decision as to the “legalization of the contract,” because the Registry retains the authority to suspend the contract notwithstanding its notarization. Once the Registry has granted its approval, a registration number is issued and the registration process is complete. Takes place simultaneously with previous procedure. Details – Registering Property in Egypt, Arab Rep. – Measure of Quality Answer Score Quality of the land administration index (0-30) 7.0 Reliability of infrastructure index (0-8) 0.0 What is the institution in charge of immovable property registration? Administration of Real Estate Publicity & Notarization In what format are the majority of title or deed records kept in the largest business city Paper 0.0 —in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Page 31   Institution in charge of the plans showing legal boundaries in the largest business city: Egyptian Doing Business 2018 Egypt, Arab Rep. Details – Registering Property in Egypt, Arab Rep. – Measure of Quality Answer Score Quality of the land administration index (0-30) 7.0 Reliability of infrastructure index (0-8) 0.0 What is the institution in charge of immovable property registration? Administration of Real Estate Publicity & Notarization In what format are the majority of title or deed records kept in the largest business city Paper 0.0 —in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Egyptian Surveying Authority ( ‫ﺍ ﻟﻬﻴﺌﺔ ﺍ ﻟﻤﺼﺮﻳﺔ‬ ‫ﺍ ﻟﻌﺎﻣﺔ‬ ‫ﻟ ﻠ ﻤﺴ ﺎ ﺡ‬ ‫ﺓ‬ ) In what format are the majority of maps of land plots kept in the largest business city— Paper 0.0 in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing No 0.0 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 No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 3.0 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, in person 0.0 made publicly available–and if so, how? Link for online access: Is the applicable fee schedule for any property transaction at the agency in charge of Yes, on public 0.5 immovable property registration in the largest business city made publicly available– boards and if so, how? Link for online access: Does the agency in charge of immovable property registration commit to delivering a Yes, on public 0.5 Page 32   immovable property registration in the largest business city made publicly available– boards and if Doing so, how? 2018 Business Egypt, Arab Rep. Link for online access: Does the agency in charge of immovable property registration commit to delivering a Yes, on public 0.5 legally binding document that proves property ownership within a speci c time frame– boards 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 agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: 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, on public 0.5 —and if so, how? boards Link for online access: 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) 0.0 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 No 0.0 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? No 0.0 Land dispute resolution index (0–8) 4.0 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? Page 33   Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Doing Business 2018 Egypt, Arab Rep. 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. 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 Cairo (North or property worth 50 times gross national income (GNI) per capita and located in the South) First largest business city, what court would be in charge of the case in the rst instance? Instance Court How long does it take on average to obtain a decision from the rst-instance court for Between 2 and 3 1.0 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 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 Page 34   credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Egypt, Arab Rep. 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. Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Strength of legal rights index (0-12) 2 1.7 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 4.8 6.6 8.00 (34 Economies) Page 35   Credit registry coverage (% of adults) 7.8 14.0 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Egypt, Arab Rep. Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Strength of legal rights index (0-12) 2 1.7 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 4.8 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 7.8 14.0 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 25.3 14.2 63.7 100.00 (23 Economies) Figure – Getting Credit in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 50.00: Egypt, Arab Rep. (Rank: 90) 50.00: Saudi Arabia (Rank: 90) 40.00: Lebanon (Rank: 122) 32.25: Regional Average (Middle East & North Africa) 25.00: Jordan (Rank: 159) 15.00: Syrian Arab Republic (Rank: 173) 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 Egypt, Arab Rep. and comparator economies 2.5 2 2 2 2 1.7 Index score 1.5 1 1 0.5 0 0 Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Details – Legal Rights in Egypt, Arab Rep. Strength of legal rights index (0-12) 2 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 No requiring a speci c description of collateral? Page 36   Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Doing Business 2018 Egypt, Arab Rep. Details – Legal Rights in Egypt, Arab Rep. Strength of legal rights index (0-12) 2 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 No 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 Yes 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 No or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes 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 No 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 No procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? No 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 No 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 Egypt, Arab Rep. and comparator economies 10 8 8 8 Index score 6 6 5 4.8 4 2 2 0 Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Details – Credit Information in Egypt, Arab Rep. Page 37   0 Egypt, Arab Doing Business Rep. 2018 Jordan Rep. Egypt, Arab Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Details – Credit Information in Egypt, Arab Rep. Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes Yes 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 - Yes No 1 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 Yes 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) 8 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 14,605,010 4,392,685 Number of firms 239,145 160,979 Total 14,844,155 4,553,664 Percentage of adult population 25.3 7.8 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 38   transactions; Available legal remedies (damages, Percentage of adult population 25.3 7.8 Doing Business 2018 Egypt, Arab Rep. 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. Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Extent of conflict of interest regulation index (0- 4.7 4.9 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6.3 4.7 6.4 Page 39   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Egypt, Arab Rep. Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Extent of conflict of interest regulation index (0- 4.7 4.9 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6.3 4.7 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: Saudi Arabia (Rank: 10) 55.00: Egypt, Arab Rep. (Rank: 81) 53.33: Syrian Arab Republic (Rank: 89) 47.92: Regional Average (Middle East & North Africa) 41.67: Lebanon (Rank: 138) 40.00: Jordan (Rank: 146) 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 Egypt, Arab Rep. and comparator economies – Measure of Quality the Arab Republic of Egypt 7 3 8 7 5 3 Jordan 7 4 4 5 2 2 Lebanon 5 1 9 1 4 5 Saudi Arabia 9 8 9 8 7 4 Syrian Arab Republic 6 5 7 5 6 3 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Middle East & North Africa 5.2 4.6 6.2 4.2 4.7 4 0 5 10 15 20 25 30 35 40 45 50 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 Egypt, Arab Rep. – Measure of Quality Answer Score Page 40   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Egypt, Arab Rep. Details – Protecting Minority Investors in Egypt, Arab Rep. – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 4.7 Extent of disclosure index (0-10) 8 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 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- Disclosure on 2.0 2) the transaction and on the con ict of interest Extent of director liability index (0-10) 3 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 Not liable 0.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Not liable 0.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by No 0.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by No 0.0 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 unfair 2.0 or prejudicial Ease of shareholder suits index (0-10) 3 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 41   Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction Doing 2018 (0-1) documents? Business Egypt, Arab Rep. 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) No 0.0 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) 5 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 No 0.0 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 No 0.0 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 Yes 1.0 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 No 0.0 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 42   Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board Doing members? Business 2018 Egypt, Arab Rep. 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? Yes 1.0 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 No 0.0 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 Yes 1.0 maximum period set by law? Extent of corporate transparency index (0-10) 7 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 Yes 1.0 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 No 0.0 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 Yes 1.0 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 43   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 Yes 1.0 audited by an external auditor? Doing Business 2018 Egypt, Arab Rep. 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 tax depreciation rates, or incorrectly treating an expense as tax deductible) Post ling Index 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. Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Payments (number per year) 29 17.9 10.9 3 (Hong Kong SAR, China) Page 44   return, but within the tax assessment period. Doing Business 2018 Egypt, Arab Rep. Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Payments (number per year) 29 17.9 10.9 3 (Hong Kong SAR, China) Time (hours per year) 392 203.4 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 45.3 32.6 40.1 18.47% (32 Economies) Postfiling index (0-100) 26.62 50.56 83.45 99.38 (Estonia) Figure – Paying Taxes in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: Saudi Arabia (Rank: 76) 74.31: Regional Average (Middle East & North Africa) 73.97: Syrian Arab Republic (Rank: 81) 70.75: Jordan (Rank: 97) 68.21: Lebanon (Rank: 113) 50.67: Egypt, Arab Rep. (Rank: 167) 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 Egypt, Arab Rep. and comparator economies – Measure of Quality 100 92.20 90 80 70 Index score 60 50.56 50 40 34.69 26.62 27.48 30 20 10 0.00 0 Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Details – Paying Taxes in Egypt, Arab Rep. Total tax and contribution Tax or mandatory Payments Notes on Time rate (% of Notes Page 45   contribution (number) Payments (hours) Statutory tax rate Tax base profit) on TTR Doing Business 2018 Egypt, Arab Rep. Figure – Paying Taxes in Egypt, Arab Rep. and comparator economies – Measure of Quality 100 92.20 90 80 70 Index score 60 50.56 50 40 34.69 26.62 27.48 30 20 10 0.00 0 Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Details – Paying Taxes in Egypt, Arab Rep. Total tax and contribution Tax or mandatory Payments Notes on Time rate (% of Notes contribution (number) Payments (hours) Statutory tax rate Tax base profit) on TTR Employer paid - 12 165 26% on basic salary, 24% on gross salaries 27.35 Social insurance variable salary (each reduced contributions by 3% for medical scheme) Corporate income 1 69 22.5% taxable profit 13.58 tax Stamp duty on 1 20% advertisement 3.54 advertisements value Property tax 1 monthly rental value 0.82 Tax on insurance 1 1% and 10% insurance 0.05 contracts premium Value added tax 12 158 10% value added 0.00 not (VAT) included Employee paid - 0 jointly 20% gross salaries 0.00 withheld Payroll tax on employee Employee paid - 0 jointly 14% on basic salary, 11% on gross salaries 0.00 withheld Social insurance variable salary (each reduced contributions by 1% for medical scheme) Fuel tax 1 consumption 0.00 small amount Totals 29 392 45.3 Details – Paying Taxes in Egypt, Arab Rep. – Tax by Type Taxes by type Answer Page 46   Totals 29 392 45.3 Doing Business 2018 Egypt, Arab Rep. Details – Paying Taxes in Egypt, Arab Rep. – Tax by Type Taxes by type Answer Profit tax (% of profit) 13.6 Labor tax and contributions (% of profit) 27.3 Other taxes (% of profit) 4.4 Details – Paying Taxes in Egypt, Arab Rep. – Measure of Quality Answer Score Post ling index (0-100) 26.62 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? No Restrictions on VAT refund process Restricted to international traders. Manufacturers were added in 2015 but no practice yet recorded Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT refund 0 per case study scenario Time to obtain a VAT refund (weeks) No VAT refund 0 per case study scenario Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 75% - 100% Time to comply with a corporate income tax audit (hours) 24.0 58.72 Time to complete a corporate income tax audit (weeks) 16.7 47.77 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 Page 47   a corporate income tax audit and time to complete a corporate income tax audit. corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. Doing Business 2018 Egypt, Arab Rep. 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 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 shipment is en route largest value (price times quantity) of auto parts. It is assumed each 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 Page 48   of agriculture or industry, national security agencies and any other a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Egypt, Arab Rep. 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 shipment is en route largest value (price times quantity) of auto parts. It is assumed each 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 Egypt, Arab Rep. government authorities. Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Time to export: Border compliance (hours) 48 62.6 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 258 464.4 149.9 0.00 (19 Economies) Time to export: Documentary compliance 88 74.3 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 100 243.6 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 240 112.3 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 554 540.7 111.6 0.00 (27 Economies) Time to import: Documentary compliance 265 94.5 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 1000 266.2 25.6 0.00 (30 Economies) Figure – Trading across Borders in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.93: Jordan (Rank: 53) 59.71: Lebanon (Rank: 140) 58.07: Regional Average (Middle East & North Africa) 49.59: Saudi Arabia (Rank: 161) 42.23: Egypt, Arab Rep. (Rank: 170) 29.83: Syrian Arab Republic (Rank: 176) 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 Egypt, Arab Rep. – Time and Cost Time Cost 300 1200 265 1000 250 240 1000 200 800 Time (hours) Cost (USD) 150 554 600 100 88 400 258 48 50 100 200 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Page 50   Doing Business 2018 Egypt, Arab Rep. Figure – Trading across Borders in Egypt, Arab Rep. – Time and Cost Time Cost 300 1200 265 1000 250 240 1000 200 800 Time (hours) Cost (USD) 150 554 600 100 88 400 258 48 50 100 200 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Egypt, Arab Rep. Characteristics Export Import Product HS 31 : Fertilisers HS 8708: Parts and accessories of motor vehicles Trade partner France Korea, Rep. Border Alexandria port Alexandria port Distance (km) 224 224 Domestic transport time (hours) 8 8 Domestic transport cost (USD) 270 300 Details – Trading across Borders in Egypt, Arab Rep. – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 4.7 90.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 48.0 168.0 Import: Clearance and inspections required by customs authorities 48.0 156.7 Import: Clearance and inspections required by agencies other than customs 96.0 165.0 Import: Port or border handling 240.0 232.0 Details – Trading across Borders in Egypt, Arab Rep. – Trade Documents Export Import Commercial invoice Certificate of origin Customs Export Declaration Customs import declaration Page 51   Domestic transport cost (USD) 270 300 Doing Business 2018 Egypt, Arab Rep. Details – Trading across Borders in Egypt, Arab Rep. – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 4.7 90.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 48.0 168.0 Import: Clearance and inspections required by customs authorities 48.0 156.7 Import: Clearance and inspections required by agencies other than customs 96.0 165.0 Import: Port or border handling 240.0 232.0 Details – Trading across Borders in Egypt, Arab Rep. – Trade Documents Export Import Commercial invoice Certificate of origin Customs Export Declaration Customs import declaration Approval letter Commercial invoice Packing list Delivery order Export license Cargo release order Shipping order Packing list Bill of lading Bill of lading Certificate of origin Compliance certificate SOLAS certificate Form 4 Receipt of administrative fees SOLAS certificate 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 Page 52   the case from simple debt enforcement. Time for trial and to obtain the judgment SOLAS certificate Doing Business 2018 Egypt, Arab Rep. 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 EGP 52,092.00 Court name First Instance Court City Covered Cairo Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Time (days) 1010 638.5 577.8 164.00 (Singapore) Cost (% of claim value) 26.2 24.4 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 5.5 5.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 58.78: Saudi Arabia (Rank: 83) 54.21: Regional Average (Middle East & North Africa) 53.71: Jordan (Rank: 118) Page 53   of judicial processes Quality Business Doing index (0-18) 2018 Egypt, Arab Rep. 5.5 5.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 58.78: Saudi Arabia (Rank: 83) 54.21: Regional Average (Middle East & North Africa) 53.71: Jordan (Rank: 118) 49.85: Lebanon (Rank: 134) 42.75: Egypt, Arab Rep. (Rank: 160) 42.58: Syrian Arab Republic (Rank: 161) 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 Egypt, Arab Rep. – Time and Cost Time Cost 1200 35 31.2 30.8 1010 29.3 1000 27.5 30 Cost (% of claim value) 26.2 872 24.4 25 800 721 21.5 Time (days) 642 638.5 20 577.8 575 600 15 400 10 200 5 0 0 Egypt, Arab Rep. Jordan Lebanon Middle East & OECD high income Saudi Arabia Syrian Arab Republic North Africa Figure – Enforcing Contracts in Egypt, Arab Rep. and comparator economies – Measure of Quality the Arab Republic of Egypt 2 0 3.5 Jordan 3 2 0 2 Lebanon 1.5 0.5 0 4 Saudi Arabia 2 2 0 4 Syrian Arab Republic 2 0 2 OECD high income 2.5 2.9 2 3.6 Middle East & North Africa 2.1 0.7 0.3 2.8 0 2 4 6 8 10 Page 54   12 Egypt, Arab Rep. Jordan Lebanon Middle East & OECD high income Saudi Arabia Syrian Arab Republic North Africa Doing Business 2018 Egypt, Arab Rep. Figure – Enforcing Contracts in Egypt, Arab Rep. and comparator economies – Measure of Quality the Arab Republic of Egypt 2 0 3.5 Jordan 3 2 0 2 Lebanon 1.5 0.5 0 4 Saudi Arabia 2 2 0 4 Syrian Arab Republic 2 0 2 OECD high income 2.5 2.9 2 3.6 Middle East & North Africa 2.1 0.7 0.3 2.8 0 2 4 6 8 10 12 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Egypt, Arab Rep. Indicator Time (days) 1010 Filing and service 20 Trial and judgment 720 Enforcement of judgment 270 Cost (% of claim value) 26.2 Attorney fees 18 Court fees 1.3 Enforcement fees 6.9 Quality of judicial processes index (0-18) 5.5 Court structure and proceedings (-1-5) 3.5 Case management (0-6) 0.0 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.0 Details – Enforcing Contracts in Egypt, Arab Rep. – Measure of Quality Page 55   Alternative dispute resolution (0-3) 2.0 Doing Business 2018 Egypt, Arab Rep. Details – Enforcing Contracts in Egypt, Arab Rep. – Measure of Quality Answer Score Quality of judicial processes index (0-18) 5.5 Court structure and proceedings (-1-5) 3.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 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) 0.0 1. Time standards 0.0 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? No 1.c. Are these time standards respected in more than 50% of cases? No 2. Adjournments 0.0 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? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 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 No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 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) 0.0 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 Egypt, Arab Rep. 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? No 0.0 4. Publication of judgments 0.0 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 No 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 1.5 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 No 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 0.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or No 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 Egypt, Arab Rep. 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) Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Recovery rate (cents on the dollar) 25.8 25.5 71.2 93.1 (Norway) Time (years) 2.5 3.0 1.7 0.4 (Ireland) Page 58   Cost (% of estate) 22.0 13.8 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Egypt, Arab Rep. Egypt, Arab Middle East & OECD high Indicator Rep. North Africa income Overall Best Performer Recovery rate (cents on the dollar) 25.8 25.5 71.2 93.1 (Norway) Time (years) 2.5 3.0 1.7 0.4 (Ireland) Cost (% of estate) 22.0 13.8 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 8.0 5.4 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Egypt and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 38.89: Egypt, Arab Rep. (Rank: 115) 30.53: Jordan (Rank: 146) 30.45: Regional Average (Middle East & North Africa) 29.42: Lebanon (Rank: 147) 21.44: Syrian Arab Republic (Rank: 163) 0.00: Saudi Arabia (Rank: 168) 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 Egypt, Arab Rep. – Time and Cost Time Cost 4.5 4.1 25 22.0 4 20.0 3.5 20 3.0 3.0 3.0 16.0 Cost (% of estate) Time (years) 3 15.0 2.5 13.8 15 2.5 2 1.7 9.1 10 1.5 1 5 0.5 0 0 Egypt, Arab Rep. Jordan Lebanon Middle East & OECD high income no practice Syrian Arab Republic North Africa Saudi Arabia Figure – Resolving Insolvency in Egypt, Arab Rep. and comparator economies – Measure of Quality the Arab Republic of Egypt 4 2 2 0 Page 59   Jordan 2 2 1 0 Egypt, Arab Rep. Jordan Lebanon Middle East & OECD high income no practice Syrian Arab Republic North Africa Saudi Arabia Doing Business 2018 Egypt, Arab Rep. Figure – Resolving Insolvency in Egypt, Arab Rep. and comparator economies – Measure of Quality the Arab Republic of Egypt 4 2 2 0 Jordan 2 2 1 0 Lebanon 2 2 0 Saudi Arabia 0 2 0 Syrian Arab Republic 2 2 1 0 OECD high income 5.4 2.8 2.3 1.9 Middle East & North Africa 3.3 2.1 0.9 0.2 0 2 4 6 8 10 12 14 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 Egypt, Arab Rep. and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 35 31.4 30 27.7 25.8 25.5 25 20 15 10.8 10 5 0.0 0 Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Details – Resolving Insolvency in Egypt, Arab Rep. Indicator Answer Explanation Proceeding foreclosure BizBank will initiate foreclosure, because it is the quickest and most efficient method to enforce its security. Outcome piecemeal sale The hotel is the only asset of Mirage and it is used as security for the bank loan, so the assets will be sold as part of the foreclosure proceedings. It will be difficult to find a buyer for the hotel as a going concern. Time (in years) 2.5 It takes around 30 months to complete foreclosure proceedings in Egypt and to enforce the judgment of the Economic Court. Foreclosure proceedings to obtain a judgment against the Page 60   Egypt, Arab Rep. Jordan Lebanon Saudi Arabia Syrian Arab Republic Middle East & North Africa Doing Business 2018 Egypt, Arab Rep. Details – Resolving Insolvency in Egypt, Arab Rep. Indicator Answer Explanation Proceeding foreclosure BizBank will initiate foreclosure, because it is the quickest and most efficient method to enforce its security. Outcome piecemeal sale The hotel is the only asset of Mirage and it is used as security for the bank loan, so the assets will be sold as part of the foreclosure proceedings. It will be difficult to find a buyer for the hotel as a going concern. Time (in years) 2.5 It takes around 30 months to complete foreclosure proceedings in Egypt and to enforce the judgment of the Economic Court. Foreclosure proceedings to obtain a judgment against the debtor will take 1.5-2 years. Enforcement will take 6 months to a year. Cost (% of 22.0 Main expenses will include attorneys' fees, court fees, fees of the auctioneer and other estate) professionals involved in the proceedings, such as accountants and auctioneers. Recovery rate (cents on the 25.8 dollar) Details – Resolving Insolvency in Egypt, Arab Rep. – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 8.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only 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 (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 4.0 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 No 0.0 after commencement of insolvency proceedings? Page 61   dollar) Doing Business 2018 Egypt, Arab Rep. Details – Resolving Insolvency in Egypt, Arab Rep. – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 8.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only 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 (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 4.0 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 No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 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 No 0.0 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 Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Page 62   Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment Doing Businessof the 2018insolvency Egypt,representative? Arab Rep. Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 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 (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 Page 63   leave; (iv) whether employees on maternity leave 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 Egypt, Arab Rep. 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 Egypt, Arab Rep. Answer Hiring Page 64   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Egypt, Arab Rep. Details – Labor Market Regulation in Egypt, Arab Rep. Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 0.0 Ratio of minimum wage to value added per worker 0.0 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 35.0 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) 21.0 Paid annual leave for a worker with 5 years of tenure (working days) 21.0 Paid annual leave for a worker with 10 years of tenure (working days) 30.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 24.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? Yes Third-party approval if one worker is dismissed? Yes Third-party noti cation if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? Yes Retraining or reassignment obligation before redundancy? No Page 65   Third-party Doing approval Business 2018 if nine workers Egypt, areRep. Arab dismissed? Yes Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 8.7 Notice period for redundancy dismissal for a worker with 5 years of tenure 8.7 Notice period for redundancy dismissal for a worker with 10 years of tenure 13.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 10.1 Severance pay for redundancy dismissal for a worker with 1 year of tenure 4.3 Severance pay for redundancy dismissal for a worker with 5 years of tenure 21.7 Severance pay for redundancy dismissal for a worker with 10 years of tenure 54.2 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 26.7 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 90.0 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)? 6.0 Business Reforms in Egypt 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 Egypt implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Registering Property: The Arab Republic of Egypt made it more di cult to register property by raising the cost to verify and ratify a sales contract. Protecting Minority Investors: The Arab Republic of Egypt strengthened minority investor protections by increasing shareholder rights and role in major corporate decisions. DB2017 Page 66   Starting a Business: The Arab Republic of Egypt made starting a business easier by merging procedures at the one-stop shop by Minimum contribution period for unemployment protection (months)? 6.0 Doing Business 2018 Egypt, Arab Rep. Business Reforms in Egypt 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 Egypt implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Registering Property: The Arab Republic of Egypt made it more di cult to register property by raising the cost to verify and ratify a sales contract. Protecting Minority Investors: The Arab Republic of Egypt strengthened minority investor protections by increasing shareholder rights and role in major corporate decisions. DB2017 Starting a Business: The Arab Republic of Egypt made starting a business easier by merging procedures at the one-stop shop by introducing a follow-up unit in charge of liaising with the tax and labor authority on behalf of the company. Protecting Minority Investors: The Arab Republic of Egypt strengthened minority investor protections by increasing shareholder rights and role in major corporate decisions and by clarifying ownership and control structures. Trading across Borders: The Arab Republic of Egypt made trading across borders more di cult by making the process of obtaining and processing documents more complex and by imposing a cap on foreign exchange deposits and withdrawals for imports. DB2016 Protecting Minority Investors: The Arab Republic of Egypt strengthened minority investor protections by barring subsidiaries from acquiring shares issued by their parent company. DB2015 Protecting Minority Investors: The Arab Republic of Egypt strengthened minority investor protections by introducing additional requirements for approval of related-party transactions and greater requirements for disclosure of such transactions to the stock exchange. DB2014 Paying Taxes: Egypt made paying taxes more costly for companies by increasing the corporate income tax rate. DB2011 Starting a Business: Egypt reduced the cost to start a business. Trading across Borders: Egypt made trading easier by introducing an electronic system for submitting export and import documents. DB2010 Starting a Business: Egypt made starting a business easier by eliminating the minimum capital requirement. Dealing with Construction Permits: Egypt made dealing with construction permits easier by issuing executive articles implementing its new construction law and by eliminating most preapprovals for building permits. Getting Credit: In Egypt the private credit bureau I-score added retailers to its database, improving access to credit information. Enforcing Contracts: Egypt made enforcing contracts easier by creating commercial courts. DB2009 Starting a Business: Egypt made starting a business easier by reducing the paid-in minimum capital requirement, abolishing bar Page 67   association fees and automating tax registration. Doing Business 2018 DB2009 Egypt, Arab Rep. Starting a Business: Egypt made starting a business easier by reducing the paid-in minimum capital requirement, abolishing bar association fees and automating tax registration. Dealing with Construction Permits: Egypt made dealing with construction permits easier through a new building code establishing a single window for processing construction-related approvals. Registering Property: Egypt speeded up property registration by simplifying administrative procedures, reorganizing the business work ow between the real estate registry and the Egyptian Surveying Authority and introducing time limits for several procedures. Getting Credit: Egypt improved access to credit information by guaranteeing borrowers’ right to inspect their own data in the private credit bureau. Protecting Minority Investors: Egypt strengthened investor protections by introducing a requirement that an independent auditor assess related-party transactions before approval. Trading across Borders: Egypt made trading across borders easier by upgrading port facilities at Alexandria and speeding up customs clearance, while greater competition in the banking sector led to a reduction in the time to open a letter of credit. DB2008 Starting a Business: Egypt made starting a business easier by lowering registration fees, improving the process at the one-stop shop and reducing the minimum capital requirement. Dealing with Construction Permits: Egypt made dealing with construction permits less costly by reducing the fee for registering a new building. Registering Property: Egypt reduced the cost of registering property by introducing a low xed fee. Getting Credit: Egypt improved access to credit information by creating a new private credit bureau, which will distribute negative data on both individuals and rms and, as guaranteed by law, allow borrowers access to their credit information. Trading across Borders: Egypt made trading across borders easier by improving customs administration. Page 68   negative data on both individuals and rms and, as guaranteed by law, allow borrowers access to their credit information. Trading Doing 2018 Egypt across Borders: Business made Egypt, trading Arab Rep. across borders easier by improving customs administration. Page 69