Doing Business 2018 Mongolia Economy Pro le of Mongolia 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 Mongolia Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region East Asia & Pacific DB 2018 Rank 190 1 Mongolia Income Category Lower middle income 62 Population 3,027,398 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 3,550 0 100 69.03 City Covered Ulan Bator DB 2018 Distance to Frontier (DTF) 0 100 83.92: Korea, Rep. (Rank: 4) 75.68: Japan (Rank: 34) 75.44: Kazakhstan (Rank: 36) 69.03: Mongolia (Rank: 62) 65.29: China (Rank: 78) Page 3   62.70: Regional Average (East Asia & Pacific) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Mongolia Ease of Doing Business in Region East Asia & Pacific DB 2018 Rank 190 1 Mongolia Income Category Lower middle income 62 Population 3,027,398 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 3,550 0 100 69.03 City Covered Ulan Bator DB 2018 Distance to Frontier (DTF) 0 100 83.92: Korea, Rep. (Rank: 4) 75.68: Japan (Rank: 34) 75.44: Kazakhstan (Rank: 36) 69.03: Mongolia (Rank: 62) 65.29: China (Rank: 78) 62.70: Regional Average (East Asia & Pacific) 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 - Mongolia 1 23 20 28 33 50 59 62 55 82 88 93 Rank 110 109 139 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Mongolia 100 90.08 78.19 80.00 77.32 80 74.18 66.67 66.89 58.48 60 55.00 DTF 43.54 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:-0.12 Change:0.00 Change:+20.00 Investors Change:-7.12 Borders Change:0.00 Change:-0.05 Change:0.00 Permits Change:0.00 Change:0.00 Change:0.00 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:-0.12 Change:0.00 Change:+20.00 Investors Change:-7.12 Borders Change:0.00 Change:-0.05 Change:0.00 Permits Change:0.00 Change:0.00 Doing Business 2018 Mongolia Change:0.00 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 Mongolia Standardized Company Legal form Limited Liability Company (HHK) Paid-in minimum capital requirement MNT 0 City Covered Ulan Bator East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Procedure – Men (number) 6 7.0 4.9 1.00 (New Zealand) Time – Men (days) 10 22.7 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 1.4 18.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 6 7.0 4.9 1.00 (New Zealand) Time – Women (days) 10 22.8 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 1.4 18.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 15.1 8.7 0.00 (113 Economies) Figure – Starting a Business in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 95.83: Korea, Rep. (Rank: 9) 91.95: Kazakhstan (Rank: 41) 90.08: Mongolia (Rank: 59) 85.47: China (Rank: 93) 84.37: Japan (Rank: 106) 82.32: Regional Average (East Asia & Pacific) 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 Mongolia – Procedure, Time and Cost Time Cost 10 0.9 0.8 8 ost (% of income per capita) 0.7 0.6 Time (days) 6 0.5 0.4 4 0.3 Page 6   0.2 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Mongolia Figure – Starting a Business in Mongolia – Procedure, Time and Cost Time Cost 10 0.9 0.8 8 Cost (% of income per capita) 0.7 0.6 Time (days) 6 0.5 0.4 4 0.3 2 0.2 0.1 0 0 1 2 3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Mongolia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Verify and reserve a unique company name 1 day MNT 500 Agency : Legal Entities Registration O ce, General Authority for State Registration of Mongolia The business owners must propose and reserve the name of the company with the Legal Entities Registration O ce of the General Authority for State Registration of Mongolia (LERO). Upon approving the proposed name of the company, LERO will issue a name reservation slip (in writing or electronically) and a "bank account permission slip". The entrepreneur opens a temporary account at the bank within the same o ce and, at the same time, can instruct the bank to make a payment to the account of the Tax Authority. Although the company name may be reserved online, the name reservation slip is one of the documents that needs to be supplied in original for the incorporation purposes. As such, ultimately a visit to LERO in person is required.  2 Open a bank account and pay registration fee 1 day no charge Agency : Bank The company needs to have a bank account in order to register. Additionally, the registration fee needs to be paid at a commercial bank. There is no charge to open a bank account, however it is required to provide a name reservation slip and deposit the minimum balance. 3 Register the company incorporation and register as tax payer 2 days MNT 44,000 Page 7   Agency : Legal Entities Registration O ce, General Authority for Intellectual (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Mongolia Details – Starting a Business in Mongolia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Verify and reserve a unique company name 1 day MNT 500 Agency : Legal Entities Registration O ce, General Authority for State Registration of Mongolia The business owners must propose and reserve the name of the company with the Legal Entities Registration O ce of the General Authority for State Registration of Mongolia (LERO). Upon approving the proposed name of the company, LERO will issue a name reservation slip (in writing or electronically) and a "bank account permission slip". The entrepreneur opens a temporary account at the bank within the same o ce and, at the same time, can instruct the bank to make a payment to the account of the Tax Authority. Although the company name may be reserved online, the name reservation slip is one of the documents that needs to be supplied in original for the incorporation purposes. As such, ultimately a visit to LERO in person is required.  2 Open a bank account and pay registration fee 1 day no charge Agency : Bank The company needs to have a bank account in order to register. Additionally, the registration fee needs to be paid at a commercial bank. There is no charge to open a bank account, however it is required to provide a name reservation slip and deposit the minimum balance. 3 Register the company incorporation and register as tax payer 2 days MNT 44,000 Agency : Legal Entities Registration O ce, General Authority for Intellectual Property and State Registration of Mongolia The following documents should be submitted at LERO in order to register incorporation and obtain a state registration certi cate: 1. Completed proforma application form; 2. Bank account approval letter, and evidence of dormant account with some funds deposited; 3. Company charter; 4. Lease agreement with the company's o cial address; 5. Founding or shareholders' resolution; 6. Payment slip of the registration fee; 7. Name reservation slip; 8. Opening balance sheet; and 9. Copies of the shareholders' passports (IDs). * For business activities that require licenses, these must be obtained rst Page 8   from the relevant authorities. charge to open a bank account, however it is required to provide a name Business slip Doing reservation and deposit 2018 the minimum balance. Mongolia 3 Register the company incorporation and register as tax payer 2 days MNT 44,000 Agency : Legal Entities Registration O ce, General Authority for Intellectual Property and State Registration of Mongolia The following documents should be submitted at LERO in order to register incorporation and obtain a state registration certi cate: 1. Completed proforma application form; 2. Bank account approval letter, and evidence of dormant account with some funds deposited; 3. Company charter; 4. Lease agreement with the company's o cial address; 5. Founding or shareholders' resolution; 6. Payment slip of the registration fee; 7. Name reservation slip; 8. Opening balance sheet; and 9. Copies of the shareholders' passports (IDs). * For business activities that require licenses, these must be obtained rst from the relevant authorities. On 29 January 2015, the Mongolian Parliament adopted the Revised Law on the State Registration of Legal Entities which entered into force on 1 March 2015. The relevant ancillary regulations were adopted on 27 February 2015 by the Ministry of Justice and the General Authority for State Registration of Mongolia. According to the new regulations, the Legal Entities Registration O ce must process company registration within 5 business days. The same regulation also introduced online registration, which is yet to be put into practice. Upon registration of the company, the Registry automatically publishes a notice of company formation. The Registry also automatically pass the relevant documents to the tax department for the area in which the company is located. Thereafter, the company will be registered as a corporate income tax payer and VAT payer, if applicable. Under the Law of Mongolia on Value Added Tax dated 29 June 2006, a taxpayer should submit its request for registration as a VAT payer within 3 days of its sales income reaching MNT 10,000,000 (approximately US$ 5010), which is to be evidenced by certi ed corporate income tax and nancial reports. 4 Apply for Social Security Code 1 day no charge Agency : District Social Insurance Department Page 9   Upon incorporation of the company and once a company has employee(s) it which is to be evidenced by certi ed corporate income tax and nancial Doing reports. Business 2018 Mongolia 4 Apply for Social Security Code 1 day no charge Agency : District Social Insurance Department Upon incorporation of the company and once a company has employee(s) it must register with relevant social insurance department. The registration is done in person, and the District Social Insurance Department assigns a social insurance code to the company. The service is free of charge. It is no longer necessary to obtain a paper certi cate of social insurance registration. The following documents should be submitted: 1. Registration Certi cate of Company; 2. O cial letter of Company; 3. Social Insurance report which must be lled in the o cial form of No. ND7 and ND8; and 4. Payment slip showing social insurance payment of the current month. 5 Make a seal 1 day MNT 59,800 (rush Agency : Sealmaker delivery fee) The company must rst obtain a seal request form LERO. Then, the company must provide one of twelve seal makers in Ulaanbaatar who are currently registered with Ministry of Justice with a copy of its state registration certi cate. 6 Register for VAT 4 days no charge Agency : VAT o ce When a company reaches a threshold of MNT 10,000,000 in operational sales income, it is eligible to register for VAT on a voluntarily basis (Art. 6.5 of the VAT Law). When the threshold of MNT 50,000,000 in operational sales income is reached, the VAT registration is mandatory (Art. 5.2 of the VAT Law), and needs to be applied for within 10 days from reaching the threshold. VAT registration is done in person at the relevant district VAT o ce. The following documents need to be submitted in order to register for VAT: - Completed application form (available at http://www.legalinfo.mn/annex/details/7217?lawid=11811); - Copy of the State Registration Certi cate; - Request letter to Tax o ce; - Proof that operational sales income reached the threshold (i.e., bank statement, receipts, contracts). 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 Page 10   Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Mongolia 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 11   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Mongolia Standardized Warehouse Estimated value of warehouse MNT 364,539,297.90 City Covered Ulan Bator East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Procedures (number) 17 15.2 12.5 7.00 (Denmark) Time (days) 137 138.2 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 0.1 2.2 1.6 0.10 (5 Economies) Building quality control index (0-15) 14.0 8.9 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 78.19: Mongolia (Rank: 23) 77.74: Korea, Rep. (Rank: 28) 73.36: Japan (Rank: 50) 73.30: Kazakhstan (Rank: 52) 69.60: Regional Average (East Asia & Pacific) 47.28: China (Rank: 172) 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 Mongolia – Procedure, Time and Cost Time Cost 0.06 120 0.05 Cost (% of warehouse value) 100 0.04 Time (days) 80 0.03 60 0.02 40 0.01 20 0 0 1 *2 3 4 *5 *6 7 8 9 10 11 12 13 14 15 16 17 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 12   component indicators. Doing Business 2018 Mongolia Figure – Dealing with Construction Permits in Mongolia – Procedure, Time and Cost Time Cost 0.06 120 0.05 Cost (% of warehouse value) 100 0.04 Time (days) 80 0.03 60 0.02 40 0.01 20 0 0 1 *2 3 4 *5 *6 7 8 9 10 11 12 13 14 15 16 17 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 Mongolia and comparator economies – Measure of Quality 16 14.0 14 13.0 12 11.0 9.6 Index score 10 8.9 8.0 8 6 4 2 0 Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Details – Dealing with Construction Permits in Mongolia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain environmental impact assessment from the City 28 days no charge Environmental O ce Agency : City Environmental O ce Article 7.4 of the Law on Environmental Impact Assessment, revised in 17 May, 2012, provided that authorized investigators will make an general environmental impact assessment within 14 days. If necessary, the related state authority may extend this time by 14 days. In practice, this takes on average 28 -- 30 days. 2 Notarize a copy of the land possession agreement 1 day no charge Agency : Notary Page 13   Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Doing Business 2018 Mongolia Details – Dealing with Construction Permits in Mongolia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain environmental impact assessment from the City 28 days no charge Environmental O ce Agency : City Environmental O ce Article 7.4 of the Law on Environmental Impact Assessment, revised in 17 May, 2012, provided that authorized investigators will make an general environmental impact assessment within 14 days. If necessary, the related state authority may extend this time by 14 days. In practice, this takes on average 28 -- 30 days. 2 Notarize a copy of the land possession agreement 1 day no charge Agency : Notary BuildCo already has the land possession agreement from when he/she owned the right to use the land. But the copy of the agreement must be notarized at a notary. 3 Request and obtain approval of preliminary drawings from the 14 days no charge Municipal Planning Agency Agency : Urban Development Department 3 documents are submitted at the MPA to obtain the approval of the preliminary drawings: an application, notarized copy of the land possession agreement, copy of the cadastral maps. The cadastral maps for the land are already in the possession of the owner of the land, he does not need to renew it. MPA meets once every 2 weeks to review these requests and approves the preliminary drawings if they are in line with the existing construction norms and regulations. With this approval, contractor can start preparing the detailed drawings. 4 Request and obtain technical conditions for heating 14 days no charge Agency : Ulaanbaatar Dulaany Shugam Suljee JSC BuildCo needs to obtain approval from water, electricity and heating agencies. Each agency takes about 14 days to review the request and the general drawings and issue technical conditions. Obtaining of technical conditions can be done simultaneously. The technical conditions are issued free of charge. 5 Request and obtain technical conditions for electricity 15 days MNT 156,000 Agency : Ulaanbaatar Electricity Distribution Network (UBEDN) Technical conditions for electricity are mandatory in order to obtain a building permit. It can be obtained in parallel with other technical conditions. 6 Request and obtain technical conditions for water and sewage 14 days MNT 165,000 Agency : Water Department of Ulan Bator Municipality BuildCo needs to obtain approval from water, electricity and heating agencies. Each agency takes about 14 days to review the request and the general drawings and issue technical conditions. Obtaining of technical conditions can be done simultaneously. The technical conditions are issued free of charge. Page 14   Technical conditions for electricity are mandatory in order to obtain a Doing building Business permit. 2018 It can be obtained in parallel with other technical conditions. Mongolia 6 Request and obtain technical conditions for water and sewage 14 days MNT 165,000 Agency : Water Department of Ulan Bator Municipality BuildCo needs to obtain approval from water, electricity and heating agencies. Each agency takes about 14 days to review the request and the general drawings and issue technical conditions. Obtaining of technical conditions can be done simultaneously. The technical conditions are issued free of charge. 7 Request and obtain approval of nal drawings from the Fire Department 1 day no charge Agency : Fire Department For a building of less than 3,000 sq. m., this approval is obtained from the city's Fire Department. 8 Request and obtain approval of nal drawings by the Ulan Bator 7 days MNT 60,000 Construction Development Center Agency : Ulan Bator Municipality Before obtaining the permission to start building from MPA, contractor needs to get the nal drawings approved by the Construction Development Center where a committee of several certi ed architects review the nal drawings and issue an o cial conclusion that all is set according to building regulations. The also stamp the drawings. 9 Request and obtain a building permit 21 days no charge Agency : Ministry of Construction and Town Planning To start the actual construction, BuildCo must obtain a building permit from the Municipal Planning Agency. Once all the necessary approvals are obtained, the nal drawings are submitted back to MPA to obtain the license or right to start construction. 10 Receive a foundation inspection by the Municipal Planning Agency 1 day no charge Agency : Municipal Planning Agency The Municipal Planning Agency has to conduct an inspection once foundation is laid. This inspection is mandated by the Government Resolution No 151 of December 2012 and is enforced in practice. No fees are charged. For all the inspections the representative of the construction company should be present on the site. 11 Receive inspection during construction from Municipal Planning Agency 1 day no charge Agency : Municipal Planning Agency The Municipal Planning Agency has to conduct an inspection during construction. This inspection is mandated by the Government Resolution No 151 of December 2012 and is enforced in practice. No fees are charged. For all the inspections the representative of the construction company should be present on the site. 12 Request water and sewage connection 1 day no charge Agency : Water Authority of Mongolia 13 Receive inspection from the Water Authority 1 day no charge Agency : Water Authority of Mongolia 14 Connect to water and sewage services through the Water Authority 3 days no charge Agency : Water Authority of Mongolia Page 15   13 Receive inspection from the Water Authority 1 day no charge Agency : Water Authority of Mongolia Doing Business 2018 Mongolia 14 Connect to water and sewage services through the Water Authority 3 days no charge Agency : Water Authority of Mongolia 15 Request and receive a nal inspection from the Technical Committee 15 days no charge Agency : Technical Committee The nal inspection is conducted 14 days after submitting the request to the Technical Committee. 16 Obtain approval of the building by the Technical Committee 14 days no charge Agency : Technical Committee The Technical Committee will review the results of the inspection and will issue its approval or "the o cial act" after 14 days from the day of the nal inspection. The o cial act would include the signature of all members of the commission. 17 Register the building in the Real Estate Registry 14 days MNT 36,454 Agency : Real Estate Registry The Real Estate Registry registers the right of ownership within 14 days of the application date and issues a certi cate of ownership. The registration fees to be paid are equal to 0.01% of the value of the real property. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Mongolia – 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; Licensed engineer. 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) in-house engineer; Unscheduled inspections; Inspections at Page 16   various phases. Takes place simultaneously with previous procedure. Doing Business 2018 Mongolia Details – Dealing with Construction Permits in Mongolia – 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; Licensed engineer. 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) in-house engineer; 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, in- house 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; Page 17   Professional in Liability Doing 2018 regimes and insurance Business index (0-2) Mongolia 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 Construction 1.0 possible structural aws or problems in the building once it is in use (Latent Defect company. Liability Insurance or Decennial Insurance)? (0-1) Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certi cation exam. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certi cation exam. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are Page 18   (number) used. certi cation exam. Doing Business 2018 Mongolia Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 19   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Mongolia Standardized Connection Price of electricity (US cents per kWh) 6.3 Name of utility Ulaanbaatar Electricity Distribution Network (UBEDN) City Covered Ulan Bator East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Procedures (number) 8 4.5 4.7 2 (United Arab Emirates) Time (days) 79 71.6 79.1 10 (United Arab Emirates) Cost (% of income per capita) 618.9 712.0 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 3 3.7 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 99.89: Korea, Rep. (Rank: 2) 89.88: Japan (Rank: 17) 76.77: Kazakhstan (Rank: 70) 72.23: Regional Average (East Asia & Pacific) 68.83: China (Rank: 98) 55.00: Mongolia (Rank: 139) 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 Mongolia – Procedure, Time and Cost Time Cost 700 70 600 Cost (% of income per capita) 60 500 50 Time (days) 400 40 300 30 200 20 10 Page 20   100 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Mongolia Figure – Getting Electricity in Mongolia – Procedure, Time and Cost Time Cost 700 70 600 Cost (% of income per capita) 60 500 50 Time (days) 400 40 300 30 200 20 10 100 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 – Getting Electricity in Mongolia and comparator economies – Measure of Quality 9 8 8 8 8 7 6 6 Index score 5 4 3.7 3 3 2 1 0 Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Details – Getting Electricity in Mongolia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to UBEDN and await technical conditions 15 calendar days MNT 156,000 Agency : Ulaanbaatar Electricity Distribution Network Authority Required documents: application, registration of the company, license of the company, land ownership documents, required load. A 4- or 5-member commission within the UBEDN meets to consider the request. 2 Obtain external inspection by UBEDN for preparing technical conditions 1 calendar day MNT 0 Agency : Ulaanbaatar Electricity Distribution Network Authority The utility has to visit the site to determine the best way to connect the warehouse before the technical conditions can be prepared. Page 21   Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Doing Business 2018 Mongolia Details – Getting Electricity in Mongolia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to UBEDN and await technical conditions 15 calendar days MNT 156,000 Agency : Ulaanbaatar Electricity Distribution Network Authority Required documents: application, registration of the company, license of the company, land ownership documents, required load. A 4- or 5-member commission within the UBEDN meets to consider the request. 2 Obtain external inspection by UBEDN for preparing technical conditions 1 calendar day MNT 0 Agency : Ulaanbaatar Electricity Distribution Network Authority The utility has to visit the site to determine the best way to connect the warehouse before the technical conditions can be prepared. 3 Await completion of project design by private rm and its approval 22 calendar days MNT 2,500,000 Agency : Project design rm The customer hires a specially licensed project design rm which develops design of the external connection. Once the design is completed the project design rm makes an appointment at the utility and takes the design for approval. In case that the connection crosses a public road, the project design company should also approve the project at the Road Department of Ulaanbaatar City. 4 Obtain approval from road authorities to lay out the cable 5 calendar days MNT 0 Agency : Road Police and Municipality The subcontractor is in charge of getting excavation permits if the line is crossing public road. In the past few years the most widespread excavation practice for laying the cables in Ulan Bator has been by using a 'shooting technique' whereby a ground puncture is made with a special pneumatic machine that has a di erent puncture tip depending on the kind of soil. The actual work does not require digging a large trench; it is su cient to have a small sized rust of about 2-3 sq. meters where the machinery is installed. It will 'shoot' the cable on the needed distance thanks to the compressed air energy. 5 Await completion of external works by private electrical contractor 30 calendar days USD 20,457.7 Agency : Electrical Contractor The customer hires a licensed electrical contractor who carries out all the necessary external connection works in according to the approved technical conditions and the project design documentation. Among other tasks, the subcontractor installs a transformer which is required in the assumed case. The electrical contractor also installs the meter. 6 Await inspection of external and internal works by state commission 4 calendar days MNT 450,000 Agency : Inspection committee A committee consisting of an employee of the utility and an employee of the department specializing in electrical issues at government organization which includes all inspectorates for various industries visits the site. At this point the electrical contractor presents his/her license for the electrical works and technical reports on the installation ((1) working drawings Page 22   subcontractor installs a transformer which is required in the assumed case. Doing The electrical Business contractor 2018 also installs the meter. Mongolia 6 Await inspection of external and internal works by state commission 4 calendar days MNT 450,000 Agency : Inspection committee A committee consisting of an employee of the utility and an employee of the department specializing in electrical issues at government organization which includes all inspectorates for various industries visits the site. At this point the electrical contractor presents his/her license for the electrical works and technical reports on the installation ((1) working drawings (showing the electricity connections and cable layouts); (2) a statement of whether there have been any changes from the original drawings submitted; (3) a statement listing all persons that have worked on installing the electrical equipment. The purpose of this statement is to check whether the work has been done by properly licensed electricians; (4) a statement certifying that all technical work complies with safety and technical regulations). Internal wiring is also checked at this point. 7 Await sealing of the meter by UBEDN 1 calendar day MNT 0 Agency : Ulaanbaatar Electricity Distribution Network Authority When the permission for a power turn on is received, a utility employee comes to the site to seal the meter. 8 Sign supply contract with UBEDN 2 calendar days MNT 0 Agency : Ulaanbaatar Electricity Distribution Network Authority Once the customer has permission for power turn on, he/she can visit the supply department at the utility and sign a supply contract for consumption of electricity. Takes place simultaneously with previous procedure. Details – Getting Electricity in Mongolia – 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) 0 System average interruption duration index (SAIDI) 16.2 System average interruption frequency index (SAIFI) 9.6 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) 1 Does the distribution utility use automated tools to monitor outages? Yes 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 Page 23   Takes place simultaneously with previous procedure. Doing Business 2018 Mongolia Details – Getting Electricity in Mongolia – 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) 0 System average interruption duration index (SAIDI) 16.2 System average interruption frequency index (SAIFI) 9.6 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) 1 Does the distribution utility use automated tools to monitor outages? Yes 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) 1 Are e ective tari s available online? Yes Link to the website, if available online http://ubedn.mn/pu blic/show/id/10 Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Page 24   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 Mongolia 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 MNT 364,539,297.90 City Covered Ulan Bator Page 25   East Asia & OECD high Doing Business 2018 Mongolia Standard Property Transfer Property value MNT 364,539,297.90 City Covered Ulan Bator East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Procedures (number) 5 5.5 4.6 1.00 (4 Economies) Time (days) 10.5 74.5 22.3 1.00 (3 Economies) Cost (% of property value) 2.1 4.3 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 14.5 15.8 22.7 29.00 (Singapore) Figure – Registering Property in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 84.61: Kazakhstan (Rank: 17) 76.34: Korea, Rep. (Rank: 39) 76.15: China (Rank: 41) 74.18: Mongolia (Rank: 50) 73.92: Japan (Rank: 52) 57.21: Regional Average (East Asia & Pacific) 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 Mongolia – Procedure, Time and Cost Time Cost 2.5 10 2 8 Cost (% of property value) Time (days) 1.5 6 4 1 2 0.5 0 0 1 2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 26   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 Mongolia Figure – Registering Property in Mongolia – Procedure, Time and Cost Time Cost 2.5 10 2 8 Cost (% of property value) Time (days) 1.5 6 4 1 2 0.5 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 – Registering Property in Mongolia and comparator economies – Measure of Quality 30 27.5 24.5 25 20 18.3 Index score 17.0 15.8 14.5 15 10 5 0 Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Details – Registering Property in Mongolia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a non-encumbrance certi cate from the Immovable Property Standart delivery - 3 Standard service fee Registration O ce days, expedited for general reference Agency : Property Registration O ce delivery - 1 day or 8 regarding non- business hours encumbrance is MNT The seller obtains, before signing the contract, the mortgage-free 1,000 (regular) and certi cation from the Immovable Property Registration O ce. MNT 2,000 (expedited). Administrative fees of General Authority for State Registration is determined by the Government Resolution No. 237 dated September 15, 2010. According to the Government Resolution providing “detailed reference” relating to Fee for detailed immovable property the fees are as follows: MNT 5, 000 to obtain a non- reference is MNT encumbrance certi cate within 3 days, expedited service MNT 10, 000 (to 5,000 (regular) and Page 27   obtain a non-encumbrance certi cate within 1 day or 8 business hours). MNT 10,000 Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Doing Business 2018 Mongolia Details – Registering Property in Mongolia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a non-encumbrance certi cate from the Immovable Property Standart delivery - 3 Standard service fee Registration O ce days, expedited for general reference Agency : Property Registration O ce delivery - 1 day or 8 regarding non- business hours encumbrance is MNT The seller obtains, before signing the contract, the mortgage-free 1,000 (regular) and certi cation from the Immovable Property Registration O ce. MNT 2,000 (expedited). Administrative fees of General Authority for State Registration is determined by the Government Resolution No. 237 dated September 15, 2010. According to the Government Resolution providing “detailed reference” relating to Fee for detailed immovable property the fees are as follows: MNT 5, 000 to obtain a non- reference is MNT encumbrance certi cate within 3 days, expedited service MNT 10, 000 (to 5,000 (regular) and obtain a non-encumbrance certi cate within 1 day or 8 business hours). MNT 10,000 (expedited). 2 Notarization of the contract of purchase 1 day Notary fees Agency : Notaries according to the following schedule: The contract must be certi ed by the notary public who is authorized to Value of contract (in operate in the district in which the immovable property is situated. The MNT): Notary fees (in contract is prepared by the parties. When immovable property is located at MNT) places other than the contract parties' jurisdiction, having notary 1.000,001 to certi cation may take longer time as contract parties are required to be present in a notary o ce at the same time. 10.000,000: MNT When a seller company has land use right over the land where immovable 10,000 property is located on, the land use right cannot be transferred to a 10.000,001 to purchasing party pursuant to relevant existing laws of Mongolia. However, in 25.000,000: MNT practice, land authority allows the transfer of land use right even it is not 25,000 provided by laws. 25.000,001 to As to the land ownership the purchaser after the transfer of the title of the 100.000,000: MNT immovable property, shall make an application to the Land department of 50,000 the relevant district to transfer the Land use right to the purchaser's name. 100.000,001 to The documentation shall include: 300.000,000: MNT • Non-encumbrance certi cate (obtained in Procedure 1) 100,000 • Immovable property registration certi cate (already in possession of seller) 300.000,001 to • ID card number and registration number of citizen or name, address and 500.000,000: MNT state registration number of legal entity who is certifying documents. 200,000 • Permission of citizen, legal entity and authorized organization if required by 500.000,001 or law above: MNT 300,000 • Copy of contract • Copy of power of attorney, if required • All documents shall be in original or notarized--Notary Law of February 10, 2011 established that the ID cards and the permission of citizen, legal entity and authorized organization do not need to be notarized any longer. The originals can be shown and the o cer or related agencies will only keep a copy. 3 Payment of Income or Transfer Tax at a commercial bank Less than a day 2% of property value Agency : Commercial Bank (online procedure) Pursuant to Article 21.6 of the Corporate Income Tax Law, the seller shall withhold the tax imposed on income from the sale of immovable property and transfer the withholding to the Budget (relevant local tax authority) within 10 business days upon the sale of the property. However, in practice, Page 28   this tax has to be paid and a receipt acknowledging the payment of income originals can be shown and the o cer or related agencies will only keep a Doing copy. Business 2018 Mongolia 3 Payment of Income or Transfer Tax at a commercial bank Less than a day 2% of property value Agency : Commercial Bank (online procedure) Pursuant to Article 21.6 of the Corporate Income Tax Law, the seller shall withhold the tax imposed on income from the sale of immovable property and transfer the withholding to the Budget (relevant local tax authority) within 10 business days upon the sale of the property. However, in practice, this tax has to be paid and a receipt acknowledging the payment of income tax has to be submitted to the Immovable Property Rights Registration O ce for the Procedure 4. 4 Submit application to the Immovable Property Registration Agency 7 days (regular Standard service fee Agency : Immovable Property Registration O ce Procedure) or 1 day MNT 20.000, rush (urgent Procedure) delivery fee MNT Parties submit relevant materials to the Immovable Property Registration 40.000 Agency. At the desk, the o cer will check all documents and if satis ed will receive the application; if not he will note the missing documents and reject the application. The certi cate of ownership will be issued within 7 days after the Registration Agency analyzes all the documentation presented, if the normal procedure is followed but in 1 day if the urgent procedure is chosen. The documentation shall include: - A request for registration ( ll an application form) - Original immovable property registration certi cate. - A notarized copy of the contract (obtained in Procedure 2) - Notarized permission of a citizen, legal entity and authorized organization if required by law - The original tax paid slip for income taxes paid at the district tax o ce - Receipt of acknowledgement for the tax payment for immovable property sale as discussed in the Procedure 3 - Copies of ID cards of citizens representing the parties - Copies of state registration certi cates, charter and shareholders' agreement (if any) of the company - Payment slip for service fees. 5 Transfer of the land use right 7 days MNT 70,000 fee for Agency : City Governance Authority new certificate Ownership of the land belongs to the State. While land can be possessed or used by Mongolian citizens and legal entities, foreign citizens and entities may only use the land pursuant to the Land Law of Mongolia. In addition, existing land laws are silent on transfer of land use right, however, in practice, land authority allows the transfer of land use right from one to another on the basis of transfer agreement. Documentation for registration of land use right transfer shall include following: - Request of both parties, - notarized transfer agreement of land use right, - notarized ID card of citizen, - notarized state registration certi cate, - charter or shareholders' agreement of a legal entity, - copy of ID card of CEO or other authorized person of a legal entity, - original land use right certi cate with land use agreement and copy of governor's order, - original cadastral map, - land fee payment slips and settlement act, - immovable property certi cate, - photo of immovable property taken from 4 sides of the immovable property - payslip for service fee. Page 29   agreement (if any) of the company Payment slip Doing -Business for service 2018 fees. Mongolia 5 Transfer of the land use right 7 days MNT 70,000 fee for Agency : City Governance Authority new certificate Ownership of the land belongs to the State. While land can be possessed or used by Mongolian citizens and legal entities, foreign citizens and entities may only use the land pursuant to the Land Law of Mongolia. In addition, existing land laws are silent on transfer of land use right, however, in practice, land authority allows the transfer of land use right from one to another on the basis of transfer agreement. Documentation for registration of land use right transfer shall include following: - Request of both parties, - notarized transfer agreement of land use right, - notarized ID card of citizen, - notarized state registration certi cate, - charter or shareholders' agreement of a legal entity, - copy of ID card of CEO or other authorized person of a legal entity, - original land use right certi cate with land use agreement and copy of governor's order, - original cadastral map, - land fee payment slips and settlement act, - immovable property certi cate, - photo of immovable property taken from 4 sides of the immovable property - payslip for service fee. Takes place simultaneously with previous procedure. Details – Registering Property in Mongolia – Measure of Quality Answer Score Quality of the land administration index (0-30) 14.5 Reliability of infrastructure index (0-8) 4.0 What is the institution in charge of immovable property registration? Capital Property Registration Agency In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: District Land Authority and Capital Property Relations Department In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Page 30   Is the information recorded by the immovable property registration agency and the Separate 0.0 Takes place simultaneously with previous procedure. Doing Business 2018 Mongolia Details – Registering Property in Mongolia – Measure of Quality Answer Score Quality of the land administration index (0-30) 14.5 Reliability of infrastructure index (0-8) 4.0 What is the institution in charge of immovable property registration? Capital Property Registration Agency In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: District Land Authority and Capital Property Relations Department In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 2.5 Who is able to obtain information on land ownership at the agency in charge of Records are not 0.0 immovable property registration in the largest business city? publicly available Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://burtgel.go v.mn/service/ind ex.php/eprs- newlist Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: https://burtgel.g ov.mn/service/im ages/document/ une%20huraamj/ hurungu1 Page 31   Doing Business 2018 Mongolia Link for online access: https://burtgel.g ov.mn/service/im ages/document/ une%20huraamj/ hurungu1 Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: http://burtgel.go v.mn/service/ind ex.php/eprs- newlist 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? Records are not 0.0 publicly available 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 Yes, on public 0.5 speci c time frame—and if so, how does it communicate the service standard? boards 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) 8.0 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? Page 32   Is the system of immovable property registration subject to a state or private Yes 0.5 Land dispute Doing 2018 index resolution Business (0–8) Mongolia 8.0 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 Yes 0.5 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; Interested Parties. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary. Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a Circuit court property worth 50 times gross national income (GNI) per capita and located in the largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Less than a year 3.0 such a case (without appeal)? Are there any statistics on the number of land disputes in the rst instance? Yes 0.5 Number of land disputes in the largest business city in 2015: 23.5% or 419 land dispute out of total 1780 disputes (administrative case) in 2016 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 Page 33   rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Mongolia 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. East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Strength of legal rights index (0-12) 9 7.2 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.2 6.6 8.00 (34 Economies) Page 34   Credit registry coverage (% of adults) 45.0 16.0 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Mongolia East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Strength of legal rights index (0-12) 9 7.2 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.2 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 45.0 16.0 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 0.0 22.3 63.7 100.00 (23 Economies) Figure – Getting Credit in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.00: Mongolia (Rank: 20) 65.00: Korea, Rep. (Rank: 55) 60.00: China (Rank: 68) 57.00: Regional Average (East Asia & Pacific) 55.00: Japan (Rank: 77) 55.00: Kazakhstan (Rank: 77) 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 Mongolia and comparator economies 10 9 9 8 7.2 7 Index score 6 5 5 5 4 4 4 3 2 1 0 Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Details – Legal Rights in Mongolia Strength of legal rights index (0-12) 9 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Page 35   Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Doing Business 2018 Mongolia Details – Legal Rights in Mongolia Strength of legal rights index (0-12) 9 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring 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 Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and 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 Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be Yes 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 Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Mongolia and comparator economies 10 8 8 8 7 7 Index score 6 6 4.2 4 2 0 Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Details – Credit Information in Mongolia Page 36   0 Mongolia Doing Business 2018 China Mongolia Japan Kazakhstan Korea, Rep. East Asia & Pacific Details – Credit Information in Mongolia Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? No Yes 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - No Yes 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more No Yes 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? No Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? No Yes 1 Can banks and financial institutions access borrowers’ credit information online (for example, No 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 No No 0 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 0 898,640 Number of firms 0 18,678 Total 0 917,318 Percentage of adult population 0.0 45.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 37   transactions; Available legal remedies (damages, Percentage of adult population 0.0 45.0 Doing Business 2018 Mongolia 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. East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Extent of conflict of interest regulation index (0- 7.3 5.7 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6 4.8 6.4 Page 38   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Mongolia East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Extent of conflict of interest regulation index (0- 7.3 5.7 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6 4.8 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.00: Kazakhstan (Rank: 1) 71.67: Korea, Rep. (Rank: 20) 66.67: Mongolia (Rank: 33) 58.33: Japan (Rank: 62) 52.33: Regional Average (East Asia & Pacific) 48.33: China (Rank: 119) 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 Mongolia and comparator economies – Measure of Quality Mongolia 8 8 6 7 3 8 China 9 1 10 2 3 4 Japan 5 6 7 3 6 8 Kazakhstan 9 6 9 8 10 9 Korea, Rep. 9 6 7 6 7 8 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 East Asia & Pacific 5.6 4.6 6.2 3.9 5.3 6.1 0 10 20 30 40 50 60 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 Mongolia – Measure of Quality Answer Score Page 39   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Mongolia Details – Protecting Minority Investors in Mongolia – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 7.3 Extent of disclosure index (0-10) 6 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts 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 1.0 2) the transaction only Extent of director liability index (0-10) 8 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if unfair or 2.0 caused to Buyer? (0-2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused Liable if unfair or 2.0 to Buyer (0-2) prejudicial Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by 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) 8 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) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Page 40   Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 Doing Business 2018 Mongolia document Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 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 Extent of shareholder rights index (0-10) 3 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? No 0.0 Are changes to the rights of a class of shares only possible if the holders of the a ected No 0.0 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 Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 7 Is it forbidden to appoint the same individual as CEO and chair of the board of Yes 1.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 Page 41   Buyer pay declared MustBusiness Doing dividends within a maximum period set by law? 2018 Mongolia No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 8 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? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? No 0.0 Assuming that Buyer is a limited company, can members representing 5% put items on Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions 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, Page 42   and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Doing Business 2018 Mongolia Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Payments (number per year) 19 21.8 10.9 3 (Hong Kong SAR, China) Page 43   return, but within the tax assessment period. Doing Business 2018 Mongolia East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Payments (number per year) 19 21.8 10.9 3 (Hong Kong SAR, China) Time (hours per year) 134 189.2 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 24.7 33.6 40.1 18.47% (32 Economies) Postfiling index (0-100) 49.08 56.55 83.45 99.38 (Estonia) Figure – Paying Taxes in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 86.69: Korea, Rep. (Rank: 24) 79.47: Kazakhstan (Rank: 50) 77.32: Mongolia (Rank: 62) 76.71: Japan (Rank: 68) 72.42: Regional Average (East Asia & Pacific) 62.90: China (Rank: 130) 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 Mongolia and comparator economies – Measure of Quality 100 93.04 90 80 71.69 70 Index score 60 56.55 49.08 49.08 48.85 50 40 30 20 10 0 Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Details – Paying Taxes in Mongolia Total tax and Tax or mandatory Payments Notes on Time contribution rate Notes on contribution (number) Payments (hours) Statutory tax rate Tax base (% of profit) TTR Page 44   Employer paid Social 12 48 11.00% gross 12.41 Doing Business 2018 Mongolia Figure – Paying Taxes in Mongolia and comparator economies – Measure of Quality 100 93.04 90 80 71.69 70 Index score 60 56.55 49.08 49.08 48.85 50 40 30 20 10 0 Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Details – Paying Taxes in Mongolia Total tax and Tax or mandatory Payments Notes on Time contribution rate Notes on contribution (number) Payments (hours) Statutory tax rate Tax base (% of profit) TTR Employer paid Social 12 48 11.00% gross 12.41 insurance salaries contributions Corporate income 1 online 46 10% (25% for taxable taxable 10.29 tax profit exceeding profit 3,000,000,000 togrogs) Property transfer tax 0 jointly 2.00% gross 1.21 sales price Property tax 1 0.6% - 1% property 0.78 value Tax on interest 0 jointly 10.00% interest 0.26 included income in other taxes Vehicle tax 4 varies up to MNT 100,000 0.04 Value added tax 1 online 40 10.00% value 0.00 not (VAT) added included and land sale Employee paid Social 0 jointly 10.00% gross 0.00 withheld insurance salaries contributions Totals 19 134 24.7 Details – Paying Taxes in Mongolia – Tax by Type Taxes by type Answer Page 45   Profit tax (% of profit) 10.3 Totals 19 134 24.7 Doing Business 2018 Mongolia Details – Paying Taxes in Mongolia – Tax by Type Taxes by type Answer Profit tax (% of profit) 10.3 Labor tax and contributions (% of profit) 12.4 Other taxes (% of profit) 2.0 Details – Paying Taxes in Mongolia – Measure of Quality Answer Score Post ling index (0-100) 49.08 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? No Restrictions on VAT refund process None 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 (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 3.5 96.33 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Page 46   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Mongolia 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 47   of agriculture or industry, national security agencies and any other Doing Business 2018 Mongolia government authorities. East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Time to export: Border compliance (hours) 62 55.9 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 191 387.5 149.9 0.00 (19 Economies) Time to export: Documentary compliance 168 68.2 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 64 112.1 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 48 70.5 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 210 431.0 111.6 0.00 (27 Economies) Time to import: Documentary compliance 115 65.6 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 83 111.4 25.6 0.00 (30 Economies) Figure – Trading across Borders in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.52: Korea, Rep. (Rank: 33) 86.51: Japan (Rank: 51) 69.97: Regional Average (East Asia & Pacific) 69.91: China (Rank: 97) 66.89: Mongolia (Rank: 110) 63.19: Kazakhstan (Rank: 123) 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 Mongolia – Time and Cost Time Cost 180 168 250 160 210 191 200 140 120 115 Time (hours) Cost (USD) 150 100 80 62 83 100 60 64 48 40 50 20 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 48   Doing Business 2018 Mongolia Figure – Trading across Borders in Mongolia – Time and Cost Time Cost 180 168 250 160 210 191 200 140 120 115 Time (hours) Cost (USD) 150 100 80 62 83 100 60 64 48 40 50 20 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Mongolia Characteristics Export Import Product HS 51 : Wool, fine or coarse animal hair; horsehair yarn HS 8708: Parts and accessories of and woven fabric motor vehicles Trade partner China China Border Zamyn-Uud border crossing Zamyn-Uud border crossing Distance (km) 890 890 Domestic transport time 27 27 (hours) Domestic transport cost 594 594 (USD) Details – Trading across Borders in Mongolia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 32.0 41.1 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 30.0 150.0 Import: Clearance and inspections required by customs authorities 24.0 59.8 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 24.0 150.0 Details – Trading across Borders in Mongolia – Trade Documents Export Import Page 49   (USD) Doing Business 2018 Mongolia Details – Trading across Borders in Mongolia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 32.0 41.1 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 30.0 150.0 Import: Clearance and inspections required by customs authorities 24.0 59.8 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 24.0 150.0 Details – Trading across Borders in Mongolia – Trade Documents Export Import Certificate of Origin     Certificate of Origin   Packing list Packing list Sales Contract Sales contract Invoice Commercial invoice Customs Declaration  Customs import declaration Export Permission Phytosanitary Certificate Certificate of conformity 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 Page 50   economies the data are also collected for the second largest business city. Certificate of conformity Doing Business 2018 Mongolia 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 MNT 14,214,157.00 Court name Ulaanbaatar District Court City Covered Ulan Bator East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Time (days) 374 565.7 577.8 164.00 (Singapore) Cost (% of claim value) 30.6 47.3 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 5.5 7.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 84.15: Korea, Rep. (Rank: 1) 78.23: China (Rank: 5) 77.55: Kazakhstan (Rank: 6) Page 51   of judicial processes Quality Business Doing index (0-18) 2018 Mongolia 5.5 7.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 84.15: Korea, Rep. (Rank: 1) 78.23: China (Rank: 5) 77.55: Kazakhstan (Rank: 6) 65.26: Japan (Rank: 51) 58.48: Mongolia (Rank: 88) 53.09: Regional Average (East Asia & Pacific) 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 Mongolia – Time and Cost Time Cost 700 47.3 50 565.7 577.8 600 Cost (% of claim value) 496.3 40 500 30.6 Time (days) 400 360 370 374 30 23.4 22.0 290 21.5 300 20 16.2 12.7 200 10 100 0 0 China East Asia & Japan Kazakhstan Korea, Rep. Mongolia OECD high income Pacific Figure – Enforcing Contracts in Mongolia and comparator economies – Measure of Quality Mongolia 2 1 1 1.5 China 3 4.5 3 4.5 Japan 2.5 1 1 3 Kazakhstan 3 4 2 5 Korea, Rep. 3 4 4 3.5 OECD high income 2.5 2.9 2 3.6 East Asia & Pacific 2.2 2 1.3 3 0 2 4 6 8 10 12 14 Page 52   16 China East Asia & Japan Kazakhstan Korea, Rep. Mongolia OECD high income Pacific Doing Business 2018 Mongolia Figure – Enforcing Contracts in Mongolia and comparator economies – Measure of Quality Mongolia 2 1 1 1.5 China 3 4.5 3 4.5 Japan 2.5 1 1 3 Kazakhstan 3 4 2 5 Korea, Rep. 3 4 4 3.5 OECD high income 2.5 2.9 2 3.6 East Asia & Pacific 2.2 2 1.3 3 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Mongolia Indicator Time (days) 374 Filing and service 14 Trial and judgment 180 Enforcement of judgment 180 Cost (% of claim value) 30.6 Attorney fees 14.9 Court fees 7.2 Enforcement fees 8.5 Quality of judicial processes index (0-18) 5.5 Court structure and proceedings (-1-5) 1.5 Case management (0-6) 1.0 Court automation (0-4) 1.0 Alternative dispute resolution (0-3) 2.0 Details – Enforcing Contracts in Mongolia – Measure of Quality Page 53   Alternative dispute resolution (0-3) 2.0 Doing Business 2018 Mongolia Details – Enforcing Contracts in Mongolia – Measure of Quality Answer Score Quality of judicial processes index (0-18) 5.5 Court structure and proceedings (-1-5) 1.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 0.0 2.a. Is there a small claims court or a fast-track procedure for small claims? No 2.b. If yes, is self-representation allowed? n.a. 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 1.0 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 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? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? No 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) 1.0 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 54   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Mongolia 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 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the Yes general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.0 1. Arbitration 1.0 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public Yes order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 55   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 Mongolia 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) East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Recovery rate (cents on the dollar) 17.0 35.4 71.2 93.1 (Norway) Time (years) 4.0 2.6 1.7 0.4 (Ireland) Page 56   Cost (% of estate) 15.0 20.6 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Mongolia East Asia & OECD high Indicator Mongolia Pacific income Overall Best Performer Recovery rate (cents on the dollar) 17.0 35.4 71.2 93.1 (Norway) Time (years) 4.0 2.6 1.7 0.4 (Ireland) Cost (% of estate) 15.0 20.6 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 11.0 7.0 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Mongolia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.44: Japan (Rank: 1) 89.33: Korea, Rep. (Rank: 5) 67.52: Kazakhstan (Rank: 39) 55.82: China (Rank: 56) 43.54: Mongolia (Rank: 93) 40.78: Regional Average (East Asia & Pacific) 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 Mongolia – Time and Cost Time Cost 4.5 25 22.0 4.0 4 20.6 3.5 20 Cost (% of estate) Time (years) 3 2.6 15.0 15.0 15 2.5 2 1.7 1.7 9.1 1.5 1.5 10 1.5 1 0.6 4.2 3.5 5 0.5 0 0 China East Asia & Japan Kazakhstan Korea, Rep. Mongolia OECD high income Pacific Figure – Resolving Insolvency in Mongolia and comparator economies – Measure of Quality Mongolia 6 2.5 2 0.5 Page 57   China 5 3 1 2.5 China East Asia & Japan Kazakhstan Korea, Rep. Mongolia OECD high income Pacific Doing Business 2018 Mongolia Figure – Resolving Insolvency in Mongolia and comparator economies – Measure of Quality Mongolia 6 2.5 2 0.5 China 5 3 1 2.5 Japan 6 3 2 3 Kazakhstan 6 3 4 2 Korea, Rep. 5.5 2.5 3 3 OECD high income 5.4 2.8 2.3 1.9 East Asia & Pacific 3.7 2.3 1.2 1 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Mongolia and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 100 92.4 90 84.7 80 70 60 50 36.9 38.3 35.4 40 30 17.0 20 10 0 Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Details – Resolving Insolvency in Mongolia Indicator Answer Explanation Proceeding liquidation Bizbank will initiate reorganization by filing the petition at the First Instance Court and if the (after an reorganization plan is refused by the creditors, the proceeding converts into liquidation. attempt at BizBank receives the payment through the piecemeal sale proceedings of Mirage's assets. reorganization) Outcome piecemeal sale The hotel will stop operating and Mirage assets will be sold piecemeal after the liquidation proceeding. Time (in years) 4.0 A reorganization procedure that is then converted into liquidation will approximately take 4 years in total. In practice, it will take almost 1 year to prepare the creditors list, draft and vote on the plan, which would be rejected under our case study assumptions. The case will then be converted into liquidation, by taking 3 additional years for the formal conversion of the proceeding, organization of the sale and its execution. Page 58   Mongolia China Japan Kazakhstan Korea, Rep. East Asia & Pacific Doing Business 2018 Mongolia Details – Resolving Insolvency in Mongolia Indicator Answer Explanation Proceeding liquidation Bizbank will initiate reorganization by filing the petition at the First Instance Court and if the (after an reorganization plan is refused by the creditors, the proceeding converts into liquidation. attempt at BizBank receives the payment through the piecemeal sale proceedings of Mirage's assets. reorganization) Outcome piecemeal sale The hotel will stop operating and Mirage assets will be sold piecemeal after the liquidation proceeding. Time (in years) 4.0 A reorganization procedure that is then converted into liquidation will approximately take 4 years in total. In practice, it will take almost 1 year to prepare the creditors list, draft and vote on the plan, which would be rejected under our case study assumptions. The case will then be converted into liquidation, by taking 3 additional years for the formal conversion of the proceeding, organization of the sale and its execution. Cost (% of 15.0 The costs associated with the case would amount to approximately 15% of the value of the estate) debtor's estate. Costs incurred during the entire insolvency process mainly include: - attorneys' fees: 5%; - auctioneer's fees: 7%; - insolvency representative’s fees: 1-5%’ - other professionals involved in the case (accountants, assessors): 1-3%. Recovery rate (cents on the 17.0 dollar) Details – Resolving Insolvency in Mongolia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 11.0 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (e) Other 0.5 insolvency framework? Management of debtor's assets index (0-6) 6.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Page 59   Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 dollar) Doing Business 2018 Mongolia Details – Resolving Insolvency in Mongolia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 11.0 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (e) Other 0.5 insolvency framework? Management of debtor's assets index (0-6) 6.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit Yes 1.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over 1.0 ordinary unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 0.5 Which creditors vote on the proposed reorganization plan? (a) All creditors 0.5 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 Yes 1.0 Page 60   Creditor Doing participation Business 2018 index (0-4) Mongolia 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 Yes 1.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to No 0.0 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 Page 61   work of equal value and nondiscrimination based on 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 Mongolia 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 Mongolia Answer Hiring Page 62   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Mongolia Details – Labor Market Regulation in Mongolia 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) 116.9 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 5.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 50.0 Premium for overtime work (% of hourly pay) 50.0 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? Yes Paid annual leave for a worker with 1 year of tenure (working days) 15.0 Paid annual leave for a worker with 5 years of tenure (working days) 15.0 Paid annual leave for a worker with 10 years of tenure (working days) 18.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 16.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Page 63   Third-party Doing approval Business 2018 if nine workers are dismissed? Mongolia No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.3 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.3 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 4.3 Severance pay for redundancy dismissal for a worker with 10 years of tenure 4.3 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.3 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)? 120.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 9.0 Business Reforms in Mongolia 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 Mongolia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Getting Credit: Mongolia strengthened access to credit by introducing a new Law on Movable and Intangible Property Pledges and by setting up a new collateral registry. The new law implemented a functional secured transactions system. The collateral registry is operational, uni ed geographically, searchable by a debtor’s unique identi er, modern, and notice based. Paying Taxes: Mongolia made paying taxes more burdensome by not allowing input VAT incurred on a business capital expenditure to be deducted as input credit. Labor Market Regulation: Mongolia amended its legislation to reduce the maximum length of the employee probationary period. Page 64   Minimum contribution period for unemployment protection (months)? 9.0 Doing Business 2018 Mongolia Business Reforms in Mongolia 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 Mongolia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Getting Credit: Mongolia strengthened access to credit by introducing a new Law on Movable and Intangible Property Pledges and by setting up a new collateral registry. The new law implemented a functional secured transactions system. The collateral registry is operational, uni ed geographically, searchable by a debtor’s unique identi er, modern, and notice based. Paying Taxes: Mongolia made paying taxes more burdensome by not allowing input VAT incurred on a business capital expenditure to be deducted as input credit. Labor Market Regulation: Mongolia amended its legislation to reduce the maximum length of the employee probationary period. DB2017 Paying Taxes: Mongolia made paying taxes easier by introducing an electronic system for ling and payment of taxes. DB2016 Starting a Business: Mongolia made starting a business easier by reducing the number of days required to register a new company. Getting Credit: In Mongolia the credit registry began distributing data from a utility company, improving access to credit information. DB2015 Protecting Minority Investors: Mongolia strengthened minority investor protections by introducing a requirement for public joint stock companies to publicly disclose related-party transactions within 2 business days. Paying Taxes: Mongolia made paying taxes easier for companies by introducing an electronic system for ling corporate income tax, VAT and social security contributions. DB2014 Starting a Business: Mongolia made starting a business easier by eliminating the requirement to get company statutes and charters notarized as well as the requirement to register a new company with the local tax o ce. Dealing with Construction Permits: Mongolia made dealing with construction permits easier by eliminating the requirement for a technical review of the building plans by the state for low- and medium-risk construction projects. Getting Electricity: Mongolia made getting electricity easier by increasing the e ciency of the utility’s internal processes, enforcing time limits at di erent stages of the connection process and eliminating the fees for testing the installation. DB2013 Starting a Business: Mongolia made starting a business easier by eliminating the minimum capital requirement for limited liability companies. Getting Credit: Mongolia improved access to credit information by adopting a law that provides for licensing of credit reference bureaus and guarantees borrowers’ right to inspect their personal data. Protecting Minority Investors: Mongolia strengthened investor protections by increasing the disclosure requirements for related-party transactions. DB2012 Getting Credit: Mongolia improved its credit information system by eliminating the minimum threshold for loans included in the Page 65   database. Doing Business 2018 DB2012 Mongolia Getting Credit: Mongolia improved its credit information system by eliminating the minimum threshold for loans included in the database. DB2009 Paying Taxes: Mongolia made paying taxes less costly for companies by reducing employers’ social insurance contribution rate. DB2008 Paying Taxes: Mongolia made paying taxes easier and less costly for companies by revising the tax code and reducing the pro t tax rate. Page 66   Paying Taxes: Mongolia made paying taxes easier and less costly for companies by revising the tax code and reducing the pro t tax rate. Business 2018 Doing Mongolia Page 67