74046 Economy Profile: Trinidad and Tobago Doing Business 2013 Trinidad and Tobago 2 © 2013 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org All rights reserved. 1 2 3 4 15 14 13 12 A copublication of The World Bank and the International Finance Corporation. This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. 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Doing Business 2013 Trinidad and Tobago 3 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 5 Starting a business ..................................................................................................................... 14 Dealing with construction permits ........................................................................................... 24 Getting electricity ....................................................................................................................... 35 Registering property .................................................................................................................. 42 Getting credit .............................................................................................................................. 53 Protecting investors ................................................................................................................... 60 Paying taxes ................................................................................................................................ 69 Trading across borders .............................................................................................................. 77 Enforcing contracts .................................................................................................................... 86 Resolving insolvency .................................................................................................................. 97 Employing workers .................................................................................................................. 103 Data notes ................................................................................................................................. 110 Resources on the Doing Business website ............................................................................ 115 Doing Business 2013 Trinidad and Tobago 4 INTRODUCTION Doing Business sheds light on how easy or difficult it is (except for the paying taxes indicators, which cover the for a local entrepreneur to open and run a small to period January–December 2011). medium-size business when complying with relevant The Doing Business methodology has limitations. Other regulations. It measures and tracks changes in areas important to business—such as an economy‘s regulations affecting 11 areas in the life cycle of a proximity to large markets, the quality of its business: starting a business, dealing with construction infrastructure services (other than those related to permits, getting electricity, registering property, trading across borders and getting electricity), the getting credit, protecting investors, paying taxes, security of property from theft and looting, the trading across borders, enforcing contracts, resolving transparency of government procurement, insolvency and employing workers. macroeconomic conditions or the underlying strength In a series of annual reports Doing Business presents of institutions—are not directly studied by Doing quantitative indicators on business regulations and the Business. The indicators refer to a specific type of protection of property rights that can be compared business, generally a local limited liability company across 185 economies, from Afghanistan to Zimbabwe, operating in the largest business city. Because over time. The data set covers 46 economies in Sub- standard assumptions are used in the data collection, Saharan Africa, 33 in Latin America and the Caribbean, comparisons and benchmarks are valid across 24 in East Asia and the Pacific, 24 in Eastern Europe economies. The data not only highlight the extent of and Central Asia, 19 in the Middle East and North obstacles to doing business; they also help identify the Africa and 8 in South Asia, as well as 31 OECD high- source of those obstacles, supporting policy makers in income economies. The indicators are used to analyze designing regulatory reform. economic outcomes and identify what reforms have More information is available in the full report. Doing worked, where and why. Business 2013 presents the indicators, analyzes their This economy profile presents the Doing Business relationship with economic outcomes and presents indicators for Trinidad and Tobago. To allow useful business regulatory reforms. The data, along with comparison, it also provides data for other selected information on ordering Doing Business 2013, are economies (comparator economies) for each indicator. available on the Doing Business website at The data in this report are current as of June 1, 2012 http://www.doingbusiness.org. Doing Business 2013 Trinidad and Tobago 5 THE BUSINESS ENVIRONMENT For policy makers trying to improve their economy‘s regulatory environment for business, a good place to ECONOMY OVERVIEW start is to find out how it compares with the regulatory environment in other economies. Doing Business provides an aggregate ranking on the ease of doing Region: Latin America & Caribbean business based on indicator sets that measure and benchmark regulations applying to domestic small to Income category: High income medium-size businesses through their life cycle. Economies are ranked from 1 to 185 by the ease of Population: 1,346,350 doing business index. For each economy the index is calculated as the ranking on the simple average of its GNI per capita (US$): 15,040 percentile rankings on each of the 10 topics included in the index in Doing Business 2013: starting a business, DB2013 rank: 69 dealing with construction permits, getting electricity, registering property, getting credit, protecting DB2012 rank: 70* investors, paying taxes, trading across borders, Change in rank: 1 enforcing contracts and resolving insolvency. The ranking on each topic is the simple average of the percentile rankings on its component indicators (see * DB2012 ranking shown is not last year‘s published the data notes for more details). The employing workers ranking but a comparable ranking for DB2012 that indicators are not included in this year‘s aggregate ease captures the effects of such factors as data of doing business ranking, but the data are presented corrections and the addition of 2 economies in this year‘s economy profile. (Barbados and Malta) to the sample this year. See the data notes for sources and definitions. The aggregate ranking on the ease of doing business benchmarks each economy‘s performance on the indicators against that of all other economies in the Doing Business sample (figure 1.1). While this ranking tells much about the business environment in an economy, it does not tell the whole story. The ranking on the ease of doing business, and the underlying indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business. Doing Business 2013 Trinidad and Tobago 6 THE BUSINESS ENVIRONMENT Figure 1.1 Where economies stand in the global ranking on the ease of doing business Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 7 THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy relative to the regional average (figure 1.2). The stands in the aggregate ranking on the ease of economy‘s rankings on the topics included in the doing business is useful. Also useful is to know how ease of doing business index provide another it ranks relative to comparator economies and perspective (figure 1.3). Figure 1.2 How Trinidad and Tobago and comparator economies rank on the ease of doing business Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 8 THE BUSINESS ENVIRONMENT Figure 1.3 How Trinidad and Tobago ranks on Doing Business topics Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 9 THE BUSINESS ENVIRONMENT Just as the overall ranking on the ease of doing business year Doing Business introduced the distance to frontier tells only part of the story, so do changes in that ranking. measure. This measure shows how far each economy is Yearly movements in rankings can provide some indication from the best performance achieved by any economy since of changes in an economy‘s regulatory environment for 2005 on each indicator in 9 Doing Business indicator sets. firms, but they are always relative. An economy‘s ranking Comparing the measure for an economy at 2 points in might change because of developments in other time allows users to assess how much the economy‘s economies. An economy that implemented business regulatory environment as measured by Doing Business regulation reforms may fail to rise in the rankings (or may has changed over time—how far it has moved toward (or even drop) if it is passed by others whose business away from) the most efficient practices and strongest regulation reforms had a more significant impact as regulations in areas covered by Doing Business (figure 1.4). measured by Doing Business. The results may show that the pace of change varies widely Moreover, year-to-year changes in the overall rankings do across the areas measured. They also may show that an not reflect how the business regulatory environment in an economy is relatively close to the frontier in some areas economy has changed over time—or how it has changed and relatively far from it in others. in different areas. To aid in assessing such changes, last Figure 1.4 How far has Trinidad and Tobago come in the areas measured by Doing Business? Note: The distance to frontier measure shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator since 2005. The measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). The overall distance to frontier is the average of the distance to frontier in the 9 indicator sets shown in the figure. See the data notes for more details on the distance to frontier measure. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 10 THE BUSINESS ENVIRONMENT The absolute values of the indicators tell another part business regulation—such as a regulatory process that of the story (table 1.1). The indicators, on their own or can be completed with a small number of procedures in comparison with the indicators of a good practice in a few days and at a low cost. Comparison of the economy or those of comparator economies in the economy‘s indicators today with those in the previous region, may reveal bottlenecks reflected in large year may show where substantial bottlenecks persist — numbers of procedures, long delays or high costs. Or and where they are diminishing. they may reveal unexpected strengths in an area of Table 1.1 Summary of Doing Business indicators for Trinidad and Tobago Best performer globally Antigua and Barbuda Trinidad and Tobago Trinidad and Tobago Dominica DB2013 Suriname DB2013 Grenada DB2013 Jamaica DB2013 Indicator DB2013 DB2012 DB2013 DB2013 Starting a Business (rank) 71 66 85 46 65 21 178 New Zealand (1) Procedures (number) 8 8 8 5 6 6 13 New Zealand (1)* Time (days) 41 41 21 13 15 7 694 New Zealand (1) Cost (% of income per 0.7 0.8 10.9 15.4 19.1 6.7 110.9 Slovenia (0.0) capita) Paid-in Min. Capital (% of 0.0 0.0 0.0 0.0 0.0 0.0 0.4 91 Economies (0.0)* income per capita) Dealing with Construction Hong Kong SAR, China 101 98 24 22 10 50 92 Permits (rank) (1) Hong Kong SAR, China Procedures (number) 17 17 10 9 8 8 11 (6)* Time (days) 297 297 134 165 123 145 461 Singapore (26) Cost (% of income per 5.3 6.0 23.4 7.6 17.9 212.4 60.4 Qatar (1.1) capita) Doing Business 2013 Trinidad and Tobago 11 Best performer globally Antigua and Barbuda Trinidad and Tobago Trinidad and Tobago Dominica DB2013 Suriname DB2013 Grenada DB2013 Jamaica DB2013 Indicator DB2013 DB2012 DB2013 DB2013 Getting Electricity (rank) 11 11 18 61 66 123 39 Iceland (1) Procedures (number) 4 4 4 5 6 6 4 Germany (3)* Time (days) 61 61 42 61 49 96 58 Germany (17) Cost (% of income per 6.6 7.9 131.3 593.4 283.5 557.0 634.4 Japan (0.0) capita) Registering Property 176 177 125 119 151 105 171 Georgia (1) (rank) Procedures (number) 9 9 7 5 8 6 6 Georgia (1)* Time (days) 78 115 26 42 47 37 197 Portugal (1) Cost (% of property value) 7.0 7.1 10.9 13.2 7.4 7.5 13.7 Belarus (0.0)* Getting Credit (rank) 23 23 104 83 104 104 159 United Kingdom (1)* Strength of legal rights 9 9 8 9 8 8 5 Malaysia (10)* index (0-10) Depth of credit 4 4 0 0 0 0 0 United Kingdom (6)* information index (0-6) Public registry coverage 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Portugal (90.7) (% of adults) Private bureau coverage United Kingdom 46.0 46.0 0.0 0.0 0.0 0.0 0.0 (% of adults) (100.0)* Protecting Investors 25 24 32 32 32 82 183 New Zealand (1) (rank) Extent of disclosure index Hong Kong SAR, China 4 4 4 4 4 4 1 (0-10) (10)* Doing Business 2013 Trinidad and Tobago 12 Best performer globally Antigua and Barbuda Trinidad and Tobago Trinidad and Tobago Dominica DB2013 Suriname DB2013 Grenada DB2013 Jamaica DB2013 Indicator DB2013 DB2012 DB2013 DB2013 Extent of director liability 9 9 8 8 8 8 0 Singapore (9)* index (0-10) Ease of shareholder suits 7 7 7 7 7 4 5 New Zealand (10)* index (0-10) Strength of investor 6.7 6.7 6.3 6.3 6.3 5.3 2.0 New Zealand (9.7) protection index (0-10) United Arab Emirates Paying Taxes (rank) 90 86 142 74 85 163 49 (1) Payments (number per Hong Kong SAR, China 39 39 57 37 30 36 29 year) (3)* United Arab Emirates Time (hours per year) 210 210 207 120 140 368 199 (12) Trading Across Borders 75 84 110 92 71 106 97 Singapore (1) (rank) Documents to export 5 5 5 7 5 6 8 France (2) (number) Time to export (days) 11 14 16 13 9 20 23 Singapore (5)* Cost to export (US$ per 843 843 1,440 1,340 1,300 1,500 1,000 Malaysia (435) container) Documents to import 10 10 8 8 7 7 6 France (2) (number) Time to import (days) 14 19 23 14 9 17 21 Singapore (4) Cost to import (US$ per 1,260 1,260 1,870 1,350 2,235 1,560 1,165 Malaysia (420) container) Enforcing Contracts (rank) 170 171 72 170 165 129 180 Luxembourg (1) Doing Business 2013 Trinidad and Tobago 13 Best performer globally Antigua and Barbuda Trinidad and Tobago Trinidad and Tobago Dominica DB2013 Suriname DB2013 Grenada DB2013 Jamaica DB2013 Indicator DB2013 DB2012 DB2013 DB2013 Time (days) 1,340 1,340 351 681 688 655 1,715 Singapore (150) Cost (% of claim) 33.5 33.5 22.7 36.0 32.6 45.6 37.1 Bhutan (0.1) Procedures (number) 42 42 45 47 47 35 44 Ireland (21)* Resolving Insolvency 135 136 85 104 185 32 158 Japan (1) (rank) no Time (years) 4.0 4.0 3.0 4.0 1.1 5.0 Ireland (0.4) practice no Cost (% of estate) 25 25 7 10 18 30 Singapore (1)* practice Outcome (0 as piecemeal no sale and 1 as going 0 0 0 1 0 practice concern) Recovery rate (cents on 18.4 17.9 35.2 28.5 0.0 63.1 8.6 Japan (92.8) the dollar) Note: DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. The ranking methodology for the paying taxes indicators changed in Doing Business 2013; see the data notes for details. For more information on “no practice� marks, see the data notes. Data for the outcome of the resolving insolvency indicator are not available for DB2012. * Two or more economies share the top ranking on this indicator. A number shown in place of an economy‘s name indicates the number of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 14 STARTING A BUSINESS Formal registration of companies has many WHAT THE STARTING A BUSINESS immediate benefits for the companies and for business owners and employees. Legal entities can INDICATORS MEASURE outlive their founders. Resources are pooled as several shareholders join forces to start a company. Procedures to legally start and operate a Formally registered companies have access to company (number) services and institutions from courts to banks as Preregistration (for example, name well as to new markets. And their employees can verification or reservation, notarization) benefit from protections provided by the law. An additional benefit comes with limited liability Registration in the economy‘s largest companies. These limit the financial liability of business city company owners to their investments, so personal Postregistration (for example, social security assets of the owners are not put at risk. Where registration, company seal) governments make registration easy, more entrepreneurs start businesses in the formal sector, Time required to complete each procedure creating more good jobs and generating more (calendar days) revenue for the government. Does not include time spent gathering What do the indicators cover? information Doing Business measures the ease of starting a Each procedure starts on a separate day business in an economy by recording all Procedure completed once final document is procedures officially required or commonly done in received practice by an entrepreneur to start up and formally operate an industrial or commercial No prior contact with officials business—as well as the time and cost required to Cost required to complete each procedure complete these procedures. It also records the (% of income per capita) paid-in minimum capital that companies must deposit before registration (or within 3 months). Official costs only, no bribes The ranking on the ease of starting a business is No professional fees unless services required the simple average of the percentile rankings on by law the 4 component indicators: procedures, time, cost and paid-in minimum capital requirement. Paid-in minimum capital (% of income per capita) To make the data comparable across economies, Doing Business uses several assumptions about the Deposited in a bank or with a notary before business and the procedures. It assumes that all registration (or within 3 months) information is readily available to the entrepreneur  Has a start-up capital of 10 times income per and that there has been no prior contact with capita. officials. It also assumes that the entrepreneur will  Has a turnover of at least 100 times income per pay no bribes. And it assumes that the business: capita.  Is a limited liability company, located in the  Does not qualify for any special benefits. largest business city.  Does not own real estate.  Has between 10 and 50 employees.  Is 100% domestically owned.  Conducts general commercial or industrial activities. Doing Business 2013 Trinidad and Tobago 15 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in Trinidad and procedures, takes 41 days, costs 0.7% of income per Tobago? According to data collected by Doing capita and requires paid-in minimum capital of 0.0% of Business, starting a business there requires 8 income per capita (figure 2.1). Figure 2.1 What it takes to start a business in Trinidad and Tobago Paid-in minimum capital (% of income per capita): 0.0 Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the starting a business indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 16 STARTING A BUSINESS Globally, Trinidad and Tobago stands at 71 in the other useful information for assessing how easy it is for ranking of 185 economies on the ease of starting a an entrepreneur in Trinidad and Tobago to start a business (figure 2.2). The rankings for comparator business. economies and the regional average ranking provide Figure 2.2 How Trinidad and Tobago and comparator economies rank on the ease of starting a business Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 17 STARTING A BUSINESS What are the changes over time? While the most recent Doing Business data reflect how the process have changed—and which have not (table easy (or difficult) it is to start a business in Trinidad and 2.1). That can help identify where the potential for Tobago today, data over time show which aspects of improvement is greatest. Table 2.1 The ease of starting a business in Trinidad and Tobago over time By Doing Business report year Indicator DB2004 DB2005 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. .. .. 66 71 Procedures n.a. n.a. 9 9 9 9 9 8 8 8 (number) Time (days) n.a. n.a. 43 43 43 43 43 41 41 41 Cost (% of income per n.a. n.a. 1.3 1.1 0.9 0.9 0.7 0.8 0.8 0.7 capita) Paid-in Min. Capital (% of n.a. n.a. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 income per capita) Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 18 STARTING A BUSINESS Equally helpful may be the benchmarks provided by what is possible in making it easier to start a business. the economies that over time have had the best And changes in regional averages can show where performance regionally or globally on the procedures, Trinidad and Tobago is keeping up—and where it is time, cost or paid-in minimum capital required to start falling behind. a business (figure 2.3). These benchmarks help show Figure 2.3 Has starting a business become easier over time? Procedures (number) Time (days) Doing Business 2013 Trinidad and Tobago 19 STARTING A BUSINESS Cost (% of income per capita) Paid-in minimum capital (% of income per capita) Note: Ninety-one economies globally have no paid-in minimum capital requirement. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 20 STARTING A BUSINESS Economies around the world have taken steps making greater firm satisfaction and savings and more it easier to start a business—streamlining procedures registered businesses, financial resources and job by setting up a one-stop shop, making procedures opportunities. simpler or faster by introducing technology and What business registration reforms has Doing Business reducing or eliminating minimum capital requirements. recorded in Trinidad and Tobago (table 2.2)? Many have undertaken business registration reforms in stages—and they often are part of a larger regulatory reform program. Among the benefits have been Table 2.2 How has Trinidad and Tobago made starting a business easier—or not? By Doing Business report year DB year Reform DB2008 No reform as measured by Doing Business. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 21 STARTING A BUSINESS What are the details? Underlying the indicators shown in this chapter for STANDARDIZED COMPANY Trinidad and Tobago is a set of specific procedures—the bureaucratic and legal steps that an entrepreneur must complete to incorporate and City: Port of Spain register a new firm. These are identified by Doing Business through collaboration with relevant local Legal Form: Private Limited Liability Company professionals and the study of laws, regulations and Paid in Minimum Capital Requirement: None publicly available information on business entry in that economy. Following is a detailed summary of Start-up Capital: 10 times GNI per capita those procedures, along with the associated time and cost. These procedures are those that apply to a company matching the standard assumptions (the ―standardized company‖) used by Doing Business in collecting the data (see the section in this chapter on what the indicators measure). Summary of procedures for starting a business in Trinidad and Tobago—and the time and cost Time to No. Procedure Cost to complete complete Request company name To reserve a company name, the promoter must submit to the 1 Companies Registry the statutorily prescribed Form 25. It is 4 days TTD 25 recommended that two alternative proposed names be submitted. After 4 days, the promoter must return to the Registry to collect the approved (stamped) form. All name approvals expire within 3 months. Statutory declaration before Commissioner of Affidavits Either an Attorney at Law or a person named in the incorporation 2 documents as a director or secretary (if an Attorney is not engaged in 1 day TTD 20 the company formation) must swear to a Declaration of Compliance (Form 31), which is a statutory declaration, before a duly certified Commissioner of Affidavits. Registration with the Commercial Registry The properly completed documentss are filed in person with the TTD 600 (TT$400 for Commercial Registry, along with payment of the required fee. The Form 1; TT$ 40 for company comes into existence, is legally registered and acquires its Form 31; TT$ 40 for own legal personality on the day on the date shown on its Certificate of Form 4; TT$ 40 for 3 Incorporation. However, it takes about 4 business days to obtain the 4 days Form 8;TT$ 40 for certificate of incorporation, which provides required evidence for the Form 27; TT$ 40 for company to undertake other procedures (for example, registering with Certificate of tax authorities). Incorporation) The following documents must be filed in duplicate: (a) Form 25, the company name request application; (b ) Form 1, the embossed articles Doing Business 2013 Trinidad and Tobago 22 Time to No. Procedure Cost to complete complete of incorporation; (c) Form 31, Statutory declaration of compliance; (d) Form 4, Notice of address of registered office; (e) Form 8, Notice of directors; and (f) Form 27, Notice of secretary. All forms are available at the Government Printery. . * Make a company seal 2 days (simultaneous 4 with previous TTD 115 The TTD 115 quoted is for a rubber company seal. A metal seal costs procedure) about TTD 400. Apply for tax payer identification number 5 To apply for a taxpayer identification number, the company applies with 1 day no charge the Board of Inland Revenue for a corporate file number and a pay-as- you-earn file number. * Apply for Registration as an Employer with National Insurance Board To obtain a national insurance number, the company must apply to register as an employer by completing an application form (NI.1) and 1 day (simultaneous 6 filing it with the National Insurance Board of Trinidad and Tobago. with previous no charge Employer registration is effected immediately upon receipt of the procedure) application except where the system data indicates previous registration of the employer. A Certificate of Registration is issued in the name of the comapmy immediately following Registration * Apply for Registration of Employees with National Insurance Board After applying to be registered as an employer and receiving a national insurance number, the company must enroll with the National Insurance Board any qualifying employee who has not been enrolled previously. The employer must submit N1.4- Application to Register an 30 days an Employed Person to the National Insurance Board Service Centre (simultaneous with no charge 7 within 14 days of hiring the employee. The employee is then required previous procedure) within 7 days of employment, to provide the company with the information needed to complete Form NI.4. This form must be signed by the company and filed with the authority. It takes 4 weeks for the National Insurance Board Service Centre to notify the company that the application is in order and to supply the company with the employee's national insurance number. * Register for VAT 30 days If the company earns gross income over TTD 200,000 per year or if it (simultaneous with no charge 8 anticipates earning such an income within 12 months from the date previous procedure) that it applies for VAT registration, it may apply by completing, signing, and filing two forms (VAT No. 1 and VAT No. 2) with the required Doing Business 2013 Trinidad and Tobago 23 Time to No. Procedure Cost to complete complete supporting documentation. The company can start operating without being registered for VAT and apply only once it has reached the TTD 200,000 threshold. Upon registration, it will receive a certificate and a VAT registration number. * Takes place simultaneously with another procedure. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 24 DEALING WITH CONSTRUCTION PERMITS Regulation of construction is critical to protect the WHAT THE DEALING WITH CONSTRUCTION public. But it needs to be efficient, to avoid PERMITS INDICATORS MEASURE excessive constraints on a sector that plays an important part in every economy. Where complying with building regulations is excessively costly in Procedures to legally build a warehouse time and money, many builders opt out. They may (number) pay bribes to pass inspections or simply build Submitting all relevant documents and illegally, leading to hazardous construction that obtaining all necessary clearances, licenses, puts public safety at risk. Where compliance is permits and certificates simple, straightforward and inexpensive, everyone Completing all required notifications and is better off. receiving all necessary inspections What do the indicators cover? Obtaining utility connections for water, Doing Business records the procedures, time and sewerage and a fixed telephone line cost for a business to obtain all the necessary Registering the warehouse after its approvals to build a simple commercial warehouse completion (if required for use as collateral or in the economy‘s largest business city, connect it to for transfer of the warehouse) basic utilities and register the property so that it Time required to complete each procedure can be used as collateral or transferred to another (calendar days) entity. Does not include time spent gathering The ranking on the ease of dealing with information construction permits is the simple average of the Each procedure starts on a separate day percentile rankings on its component indicators: procedures, time and cost. Procedure completed once final document is received To make the data comparable across economies, Doing Business uses several assumptions about the No prior contact with officials business and the warehouse, including the utility Cost required to complete each procedure (% connections. of income per capita) The business: Official costs only, no bribes  Is a limited liability company operating in  Will be connected to water, sewerage the construction business and located in (sewage system, septic tank or their the largest business city. equivalent) and a fixed telephone line. The  Is domestically owned and operated. connection to each utility network will be 10 meters (32 feet, 10 inches) long.  Has 60 builders and other employees.  Will be used for general storage, such as of The warehouse: books or stationery (not for goods requiring  Is a new construction (there was no special conditions). previous construction on the land).  Will take 30 weeks to construct (excluding all  Has complete architectural and technical delays due to administrative and regulatory plans prepared by a licensed architect. requirements). Doing Business 2013 Trinidad and Tobago 25 DEALING WITH CONSTRUCTION PERMITS Where does the economy stand today? What does it take to comply with the formalities to construction permits there requires 17 procedures, build a warehouse in Trinidad and Tobago? According takes 297 days and costs 5.3% of income per capita to data collected by Doing Business, dealing with (figure 3.1). Figure 3.1 What it takes to comply with formalities to build a warehouse in Trinidad and Tobago Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the dealing with construction permits indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 26 DEALING WITH CONSTRUCTION PERMITS Globally, Trinidad and Tobago stands at 101 in the ranking provide other useful information for assessing ranking of 185 economies on the ease of dealing with how easy it is for an entrepreneur in Trinidad and construction permits (figure 3.2). The rankings for Tobago to legally build a warehouse. comparator economies and the regional average Figure 3.2 How Trinidad and Tobago and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 27 DEALING WITH CONSTRUCTION PERMITS What are the changes over time? While the most recent Doing Business data reflect how which aspects of the process have changed—and easy (or difficult) it is to deal with construction permits which have not (table 3.1). That can help identify where in Trinidad and Tobago today, data over time show the potential for improvement is greatest. Table 3.1 The ease of dealing with construction permits in Trinidad and Tobago over time By Doing Business report year Indicator DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. 98 101 Procedures (number) 17 17 17 17 17 16 17 17 Time (days) 297 297 297 297 297 296 297 297 Cost (% of income 6.8 5.7 4.7 4.3 5.0 4.0 6.0 5.3 per capita) Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. For more information on ―no practice‖ marks, see the data notes. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 28 DEALING WITH CONSTRUCTION PERMITS Equally helpful may be the benchmarks provided by possible in making it easier to deal with construction the economies that over time have had the best permits. And changes in regional averages can show performance regionally or globally on the procedures, where Trinidad and Tobago is keeping up—and where time or cost required to deal with construction permits it is falling behind. (figure 3.3). These benchmarks help show what is Figure 3.3 Has dealing with construction permits become easier over time? Procedures (number) Time (days) Doing Business 2013 Trinidad and Tobago 29 DEALING WITH CONSTRUCTION PERMITS Cost (% of income per capita) Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 30 DEALING WITH CONSTRUCTION PERMITS Smart regulation ensures that standards are met while building safety while keeping compliance costs making compliance easy and accessible to all. reasonable, governments around the world have Coherent and transparent rules, efficient processes and worked on consolidating permitting requirements. adequate allocation of resources are especially What construction permitting reforms has Doing important in sectors where safety is at stake. Business recorded in Trinidad and Tobago (table 3.2)? Construction is one of them. In an effort to ensure Table 3.2 How has Trinidad and Tobago made dealing with construction permits easier—or not? By Doing Business report year DB year Reform DB2008 No reform as measured by Doing Business. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. Trinidad and Tobago made dealing with construction permits DB2012 costlier by increasing the fees for building permit approvals. DB2013 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 31 DEALING WITH CONSTRUCTION PERMITS What are the details? The indicators reported here for Trinidad and BUILDING A WAREHOUSE Tobago are based on a set of specific procedures—the steps that a company must complete to legally build a warehouse—identified City : Port of Spain by Doing Business through information collected from experts in construction licensing, including Estimated architects, construction lawyers, construction firms, TTD 8,000,000 Warehouse Value : utility service providers and public officials who deal with building regulations. These procedures The procedures, along with the associated time and are those that apply to a company and structure cost, are summarized below. matching the standard assumptions used by Doing Business in collecting the data (see the section in this chapter on what the indicators cover). Summary of procedures for dealing with construction permits in Trinidad and Tobago —and the time and cost Time to No. Procedure Cost to complete complete Obtain cadastral sheet (location map) The Land and Surveys Division of the Ministry of Agriculture, Land, and Marine Resources provides vertical and horizontal survey control 1 services to land surveyors and engineers. This service provides 1 day no charge professionals with the coordinates required to perform cadastral, geodetic and topographical surveys, and location maps. BuildCo must obtain a location map in order to obtain an outline planning permission. Obtain outline planning permission Outline approval should be obtained first, before an application for full planning permission is submitted. Outline approval informs an applicant whether or not the type of development proposed is consistent with land use policy and provides overall development standards applicable to the site. Submission of an outline application reduces the risk of unnecessary expense in the preparation of plans and technical drawings for a development that may not be approved. 2 To obtain outline approval, BuildCo must submit the following 60 days no charge documents to the regional office responsible for the area concerned: • Two copies of the completed ―outline application form‖ (TCP/3) • Two copies of a location sketch with sufficient information for the site to be clearly and positively identified by a field officer. Information such as the plot number, postal address, number of the nearest light pole or mile mark, prominent landmark, culvert, and other similar information, are useful on location sketches • The numbered cadastral sheet on which the site is located (if available) and information on how to obtain a cadastral sheet (map of Doing Business 2013 Trinidad and Tobago 32 Time to No. Procedure Cost to complete complete the location) • A copy of the deed or oldest and latest tenancy receipt, and survey plan relating to the parcel of land to be developed An application form (TCP/3) can be obtained online or from the nearest regional office. Detailed plans and drawings are not required at this stage. An acknowledgement slip is issued to the applicant when the application form is submitted. The Development Control Inspector from the Town and Country Planning Division visits the site to collect information pertaining to the application. Then an evaluation and report are attached to the application and submitted for consideration. A notice of grant of approval or refusal of outline planning permission is prepared and sent by mail to the applicant. Outline approval can be obtained within a 2-month period. * Receive inspection to receive outline planning permission 3 1 day no charge Obtain approval of sewerage and water project from the Water and Sewerage Authority (WASA) 4 35 days TTD 650 The New Services Department administers the approval of water and wastewater services to new buildings and developments. * Water and Sewerage Authority (WASA) inspects the construction site to prepare an estimate for connection 5 1 day no charge The Water and Sewerage Authority, (WASA), inspects the site to prepare an estimate of the connection costs. Obtain approval from the Fire Department 6 30 days no charge Obtain full planning permission Planning permission must be obtained from the Town and Country Planning Division of the Ministry of Planning and Development before any development of land is undertaken. For full planning permission, applicants are required to deliver the following documents to the regional office responsible for the area concerned: 7 90 days TTD 450 • Four copies of the completed application form for permission to develop land (TCP/1) • Four copies of a location sketch with sufficient information for the site to be clearly and positively identified by a field officer. Information such as the plot number, postal address, number of the nearest light pole, mark of the nearest mile post, prominent landmark, culvert and other similar information, are useful on location sketches. • Four copies of all plans and drawings that describe the proposed development (as applicable). All drawings are to be drawn at an Doing Business 2013 Trinidad and Tobago 33 Time to No. Procedure Cost to complete complete appropriate scale for legibility and easy handling. • Location and site plan showing the north sign. • Floor plans and foundation plans. • Elevations and sections. • Structural drawings. • Isometric drawings (for sewered buildings). • Electrical drawings (for nonresidential buildings). • Two copies of the completed application form for the utilization of land (LHA-2), which should be forwarded to the local authority. These forms can be obtained from the municipal corporation responsible for the area concerned. An acknowledgement slip will be issued when the application form is submitted. The Development Control Inspector from the Town and Country Planning Division visits the site to collect information pertaining to the application. Then an evaluation and report are attached to the application and submitted for consideration. The applicant is notified by mail within a 2-month period whether full planning permission has been granted. Full planning permission may be granted unconditionally, or may be subject to specified conditions. Where planning permission is subject to conditions or refused, the reasons for the decision taken are included in a Notice of Determination. Failure to provide proper information will result in the application being returned to the applicant undetermined. It is possible for several applications for different types of development to be submitted for one property, and get approved. Each of these planning permissions remains valid, unless otherwise specified, and in principle a developer may choose the one(s) they intend to implement. The statutory period to respond the applicants TCP Act is within 2 months. This deadline is not usually observed. * Receive inspection to obtain full planning permission Before issuing the full planning permission the Development Control Inspectors do the first check on the site -- if they find something 8 strange they would tell the planner and do a joint inspection. 1 day no charge The Regional Corporations monitor construction development. BuildCo should notify when construction has started. Receive on-site inspection 9 1 day no charge Authorities inspect the site every few months. Receive on-site inspection 10 1 day no charge Authorities inspect the site every few months. Notify Regional Corporation of the completion of construction 11 1 day no charge BuildCo notifies the Town and Country Planning Division once it Doing Business 2013 Trinidad and Tobago 34 Time to No. Procedure Cost to complete complete completes construction of the warehouse so that it may be inspected. Receive final inspection from the Regional Corporation 12 1 day no charge The Regional Corporation inspects the site and sends the certificate to BuildCo. Receive inspection and final approval from the Fire Department 13 1 day TTD 200 Obtain building completion certificate 14 14 days TTD 1,000 The supervising department verifies whether the project is completed according to the specifications. * Obtain water and sewage connection For the drawings' submission the company would need a licensed 60 days TTD 2,927 15 plumber to submit the documents. The plumber does not have any other specific tasks except that they have to show up and submit the plans, many times they don‘t even draw them themselves. Obtain water and sewage completion certificate 16 1 day no charge * Obtain telephone line 17 14 days TTD 200 * Takes place simultaneously with another procedure. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 35 GETTING ELECTRICITY Access to reliable and affordable electricity is vital WHAT THE GETTING ELECTRICITY for businesses. To counter weak electricity supply, many firms in developing economies have to rely INDICATORS MEASURE on self-supply, often at a prohibitively high cost. Whether electricity is reliably available or not, the Procedures to obtain an electricity first step for a customer is always to gain access by connection (number) obtaining a connection. Submitting all relevant documents and What do the indicators cover? obtaining all necessary clearances and permits Doing Business records all procedures required for Completing all required notifications and a local business to obtain a permanent electricity receiving all necessary inspections connection and supply for a standardized warehouse, as well as the time and cost to Obtaining external installation works and complete them. These procedures include possibly purchasing material for these works applications and contracts with electricity utilities, Concluding any necessary supply contract and clearances from other agencies and the external obtaining final supply and final connection works. The ranking on the ease of getting electricity is the simple average of Time required to complete each procedure the percentile rankings on its component (calendar days) indicators: procedures, time and cost. To make the Is at least 1 calendar day data comparable across economies, several assumptions are used. Each procedure starts on a separate day The warehouse: Does not include time spent gathering information  Is located in the economy‘s largest business city, in an area where other Reflects the time spent in practice, with little warehouses are located. follow-up and no prior contact with officials  Is not in a special economic zone where Cost required to complete each procedure the connection would be eligible for (% of income per capita) subsidization or faster service. Official costs only, no bribes  Has road access. The connection works Excludes value added tax involve the crossing of a road or roads but are carried out on public land.  Is 150 meters long.  Is a new construction being connected to  Is to either the low-voltage or the medium- electricity for the first time. voltage distribution network and either overhead  Has 2 stories, both above ground, with a or underground, whichever is more common in total surface of about 1,300.6 square the economy and in the area where the meters (14,000 square feet), and is built on warehouse is located. The length of any a plot of 929 square meters (10,000 square connection in the customer‘s private domain is feet). negligible. The electricity connection:  Involves installing one electricity meter. The monthly electricity consumption will be 0.07  Is a 3-phase, 4-wire Y, 140-kilovolt-ampere gigawatt-hour (GWh). The internal electrical (kVA) (subscribed capacity) connection. wiring has been completed. Doing Business 2013 Trinidad and Tobago 36 GETTING ELECTRICITY Where does the economy stand today? What does it take to obtain a new electricity requires 4 procedures, takes 61 days and costs 6.6% of connection in Trinidad and Tobago? According to data income per capita (figure 4.1). collected by Doing Business, getting electricity there Figure 4.1 What it takes to obtain an electricity connection in Trinidad and Tobago Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the getting electricity indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 37 GETTING ELECTRICITY Globally, Trinidad and Tobago stands at 11 in the another perspective in assessing how easy it is for an ranking of 185 economies on the ease of getting entrepreneur in Trinidad and Tobago to connect a electricity (figure 4.2). The rankings for comparator warehouse to electricity. economies and the regional average ranking provide Figure 4.2 How Trinidad and Tobago and comparator economies rank on the ease of getting electricity Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 38 GETTING ELECTRICITY Even more helpful than rankings on the ease of getting performers on these indicators may provide useful electricity may be the indicators underlying those benchmarks. rankings (table 4.1). And regional and global best Table 4.1 The ease of getting electricity in Trinidad and Tobago Best performer in Trinidad and Trinidad and Best performer Indicator Latin America & Tobago DB2013 Tobago DB2012 globally DB2013 Caribbean DB2013 Rank Trinidad and Tobago 11 11 Iceland (1) (11) Procedures St. Vincent and the (number) 4 4 Germany (3)* Grenadines (3) Time (days) 61 61 St. Kitts and Nevis (18) Germany (17) Cost (% of income Trinidad and Tobago per capita) 6.6 7.9 Japan (0.0) (6.6) Note: DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. * Two or more economies share the top ranking on this indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 39 GETTING ELECTRICITY Obtaining an electricity connection is essential to safety in the connection process while keeping enable a business to conduct its most basic operations. connection costs reasonable, governments around the In many economies the connection process is world have worked to consolidate requirements for complicated by the multiple laws and regulations obtaining an electricity connection. What reforms in involved—covering service quality, general safety, getting electricity has Doing Business recorded in technical standards, procurement practices and Trinidad and Tobago (table 4.2)? internal wiring installations. In an effort to ensure Table 4.2 How has Trinidad and Tobago made getting electricity easier—or not? By Doing Business report year DB year Reform DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 40 GETTING ELECTRICITY What are the details? The indicators reported here for Trinidad and Tobago OBTAINING AN ELECTRICITY CONNECTION are based on a set of specific procedures—the steps that an entrepreneur must complete to get a warehouse connected to electricity by the local City: Port of Spain distribution utility—identified by Doing Business. Data are collected from the distribution utility, then Name of Utility: Trinidad and Tobago completed and verified by electricity regulatory Electricity Commission agencies and independent professionals such as The procedures are those that apply to a warehouse electrical engineers, electrical contractors and and electricity connection matching the standard construction companies. The electricity distribution assumptions used by Doing Business in collecting the utility surveyed is the one serving the area (or areas) in data (see the section in this chapter on what the which warehouses are located. If there is a choice of indicators cover). The procedures, along with the distribution utilities, the one serving the largest associated time and cost, are summarized below. number of customers is selected. Summary of procedures for getting electricity in Trinidad and Tobago—and the time and cost Time to No. Procedure Cost to complete complete Request final internal wiring inspection from the Government Electrical Inspectorate and receive Inspection Certificate of Approval thereafter Customer/Contractor needs to obtain application form from Inspectorate 1 offices and completed. The Application form is to be completed by the 21 calendar days TTD 1,550.0 licensed Wireman but signed by the owner/customer. On the same day that the Wireman submits this form, part or all of the costs associated with the inspection must be paid. The date for inspection is given immediately at this point (i.e. on the same day given that payment in part or in full has occurred). Submit a request for service to the Trinidad and Tobago Electricity Commission (T&TEC) and await site inspection by a Consumer Investigator from T&TEC Documents to be submitted - Proof of ownership of premises to be connected: e.g. Title, Deed of Assent, Deed of Gift, Deed of Mortgage, Deed of Lease; Service Deposit for each meter. An Inspection Certificate of Approval (available from the Government Electrical Inspectorate – this is the preliminary inspection that the Inspectorate conducts, for newly 14 calendar days no charge 2 constructed buildings. The electrical contractor has to submit an application form and fees to the Inspectorate. The Inspectorate then does the inspection and provides certificate of approval). The Registration Certificate of the Company; A Letter from Company authorizing the bearer to sign on its behalf; The Identification of the Signatory: e.g. Identification Card, Passport or Driver's Permit; The Company Seal or rubber stamp. Once application is received, the utility carries out a survey to confirm that the capacity exists. Doing Business 2013 Trinidad and Tobago 41 Time to No. Procedure Cost to complete complete Receive site visit from T&TEC Engineer/Consumer Investigator and await conditions of supply letter Once application is received, the utility carries out a survey to confirm that the capacity exists. After survey is carried out TTEC informs the electrical contractor of the availability or non-availability of the capacity required and of the cost involved. IF capacity is not there then the Conditions-of-Supply letter will specify the capital contribution to be made towards increased capacity. The letter from TTEC will also specify 5 calendar days no charge 3 other conditions besides the costs that are to be paid before the connection is made. This would include various inspections and other documents showing that the owner of the building has granted authority for the electrical contracting company to undertake the requests on behalf of him. The Condition of Supply letter outlines the type of connection required and the Capital Contribution Cost. According to the Capital Contribution Policy of T&TEC, if the incremental revenue generated (annual revenue x annuity factor of 6.71) is more than the project cost, then the customer is not charged any capital contribution. Pay Service Deposit to T&TEC and await external connection, meter installation, and electricity turned on 4 21 calendar days TTD 5,250.0 Customer makes payment of estimated amount at utility offices, and utility conducts all external connection works and meter installation. * Takes place simultaneously with another procedure. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 42 REGISTERING PROPERTY Ensuring formal property rights is fundamental. WHAT THE REGISTERING PROPERTY Effective administration of land is part of that. If INDICATORS MEASURE formal property transfer is too costly or complicated, formal titles might go informal again. And where property is informal or poorly Procedures to legally transfer title on administered, it has little chance of being immovable property (number) accepted as collateral for loans—limiting access to Preregistration (for example, checking for liens, finance. notarizing sales agreement, paying property transfer taxes) What do the indicators cover? Registration in the economy‘s largest business Doing Business records the full sequence of city procedures necessary for a business to purchase property from another business and transfer the Postregistration (for example, filing title with the municipality) property title to the buyer‘s name. The transaction is considered complete when it is opposable to Time required to complete each procedure third parties and when the buyer can use the (calendar days) property, use it as collateral for a bank loan or Does not include time spent gathering resell it. The ranking on the ease of registering information property is the simple average of the percentile rankings on its component indicators: procedures, Each procedure starts on a separate day time and cost. Procedure completed once final document is received To make the data comparable across economies, several assumptions about the parties to the No prior contact with officials transaction, the property and the procedures are Cost required to complete each procedure used. (% of property value) The parties (buyer and seller): Official costs only, no bribes  Are limited liability companies, 100% No value added or capital gains taxes included domestically and privately owned.  Are located in the periurban area of the economy‘s largest business city.  Has no mortgages attached and has been under the same ownership for the past 10  Have 50 employees each, all of whom are years. nationals.  Consists of 557.4 square meters (6,000 square  Perform general commercial activities. feet) of land and a 10-year-old, 2-story The property (fully owned by the seller): warehouse of 929 square meters (10,000  Has a value of 50 times income per capita. square feet). The warehouse is in good The sale price equals the value. condition and complies with all safety standards, building codes and legal  Is registered in the land registry or requirements. The property will be transferred cadastre, or both, and is free of title in its entirety. disputes.  Is located in a periurban commercial zone, and no rezoning is required. Doing Business 2013 Trinidad and Tobago 43 REGISTERING PROPERTY Where does the economy stand today? What does it take to complete a property transfer in procedures, takes 78 days and costs 7.0% of the Trinidad and Tobago? According to data collected by property value (figure 5.1). Doing Business, registering property there requires 9 Figure 5.1 What it takes to register property in Trinidad and Tobago Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the registering property indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 44 REGISTERING PROPERTY Globally, Trinidad and Tobago stands at 176 in the other useful information for assessing how easy it is for ranking of 185 economies on the ease of registering an entrepreneur in Trinidad and Tobago to transfer property (figure 5.2). The rankings for comparator property. economies and the regional average ranking provide Figure 5.2 How Trinidad and Tobago and comparator economies rank on the ease of registering property Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 45 REGISTERING PROPERTY What are the changes over time? While the most recent Doing Business data reflect how of the process have changed—and which have not easy (or difficult) it is to register property in Trinidad (table 5.1). That can help identify where the potential and Tobago today, data over time show which aspects for improvement is greatest. Table 5.1 The ease of registering property in Trinidad and Tobago over time By Doing Business report year Indicator DB2005 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. .. 177 176 Procedures (number) n.a. 8 9 9 9 9 9 9 9 Time (days) n.a. 162 115 115 115 115 115 115 78 Cost (% of property value) n.a. 7.0 7.1 7.0 7.0 7.0 7.0 7.1 7.0 Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. For more information on ―no practice‖ marks, see the data notes. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 46 REGISTERING PROPERTY Equally helpful may be the benchmarks provided by possible in making it easier to register property. And the economies that over time have had the best changes in regional averages can show where Trinidad performance regionally or globally on the procedures, and Tobago is keeping up—and where it is falling time or cost required to complete a property transfer behind. (figure 5.3). These benchmarks help show what is Figure 5.3 Has registering property become easier over time? Procedures (number) Time (days) Doing Business 2013 Trinidad and Tobago 47 REGISTERING PROPERTY Cost (% of property value) Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 48 REGISTERING PROPERTY Economies worldwide have been making it easier for have cut the time required substantially—enabling entrepreneurs to register and transfer property—such buyers to use or mortgage their property earlier. What as by computerizing land registries, introducing time property registration reforms has Doing Business limits for procedures and setting low fixed fees. Many recorded in Trinidad and Tobago (table 5.2)? Table 5.2 How has Trinidad and Tobago made registering property easier—or not? By Doing Business report year DB year Reform DB2008 No reform as measured by Doing Business. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. In Trinidad and Tobago property transfers became faster DB2013 thanks to speedier issuance of clearance certificates by the Water and Sewerage Authority. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 49 REGISTERING PROPERTY What are the details? The indicators reported here are based on a set of STANDARD PROPERTY TRANSFER specific procedures—the steps that a buyer and seller must complete to transfer the property to the buyer‘s name—identified by Doing Business City: Port of Spain through information collected from local property Property Value: TTD 5,134,622 lawyers, notaries and property registries. These procedures are those that apply to a transaction The procedures, along with the associated time and matching the standard assumptions used by Doing cost, are summarized below. Business in collecting the data (see the section in this chapter on what the indicators cover). Summary of procedures for registering property in Trinidad and Tobago—and the time and cost Time to No. Procedure Cost to complete complete * Conduct title search at Land Registry There are two systems of law under which land is held in Trinidad and Tobago: the old or Common Law system of conveyancing, and the Torrens system of registered conveyancing (The Real Property Act system - RPA). Most of land in Trinidad (about 70%) is still held under the old law system. The two systems exist side by side and it is not uncommon to find one property consisting of lands held under both systems. The registration system used is dependent on where the property is located. The deeds registartion system, established under the Common Law system, was the initial property registration system and • TDD 500-1,200 then RPA was introduced and the property in the city of Port of Spain is • search of a single predominantly still held under it. This is the reason why the calculations document TDD of the time and cost in the DB Report reflect the Common Law system. 1-2 weeks 10,00 Under RPA, all dealings with land or property in endorsed on a (simultaneous with • copy of each page 1 document called a Certificate of Title, so it is also referred to as the Title Procedures 2 and 3) of document TDD system, and the Common Law system is referred to as the Deeds system. 2,00 • certify each copy Title searches are carried out under both systems as a routine part of the property registration system. The search under RPA is quicker and less TDD 5,00 expensive as the certificate of title provides all the information on the previous owners on it. In the case of the Deeds registration, one is required to do a search for a minimum of 20 years. The search is done manually and entails longer time and higher costs. A search clerk conducts the title search at the Land Registry by examining the Index of Deeds and Country Books relating to parcel of land. The Land Registry created an online database which is in the testing stage and, thus, only grants access to search clerks. The fee for conducting a single index or a single deed search is TDD 10. * Conduct companies search from Companies' Registries 1 day (simultaneous TDD 20 per 2 with Procedures 1 download Doing Business 2013 Trinidad and Tobago 50 Time to No. Procedure Cost to complete complete Searches should also be performed on the companies which are parties and 3) to the transaction. Lawyers will usually use two resources to conduct companies searches : (1) the online registry at https://rgd.legalaffairs.gov.tt/ and (2) the Companies‘ Registry. Common practice is to consult a company‘s online file and what is termed the physical file that is held at the Companies Registry. Downloading a company file from the online registry costs TT$20.00 while physical searches can cost anywhere around TT$500 - $1,000.00. A standard company‘s search will usually take approximately one week. The company search is done by first downloading the Company's file from the Online Companies' Registry and, later, having a search clerk review the physical file at the Companies' Registry to ensure that the online file is accurate. Once the Company's file has been obtained, the attorney can confirm whether any charges exist which may affect the relevant property as well as, for the purposes of execution, the directors of the company can be identified. * Obtain a Certificate of Assessment from the District Revenue Office 7-15 days 3 The application for Certificate of Assessment is to facilitate acquisition of (simultaneous with TDD 10 WASA lines on properties in Procedure 4. The certificate is needed to Procedures 1 and 2) verify that the applicant owns the property. Obtain Clearance Certificate from the Water and Sewerage Authority (WASA) The vendor requests the clearance certificate from WASA (the application form is obtained online). This is to confirm that there are no outstanding rates due in respect of the property. The required documents are: • up to date Certificate of Assessment from the District Revenue Office (not older than three months): obtained in Procedure 3 • a sketch showing clear directions to property TDD 862.5 (for • WASA bill (if any) commercial 4 • the clearance fee (revised April 1st 2009) 5-10 business days property) for WASA Clearance Certificate Commercial properties cost $862.50 (VAT inclusive) (B3, B4, C1, C2, C3, C4) • valid identification (ID card/Driver‘s permit/Passport) • application form from any Customer Service Centre or download the Clearance Certificate application form At this point, the purchaser‘s attorney would also request up-to-date receipts from the vendor, showing that all land and building taxes have been paid. Send memorandum of transfer to the Board of Inland Revenue for assessment of Stamp Duty 1-7 days no additional charge 5 The Memorandum of Transfer (RPA lands) or Deed (Common Law Doing Business 2013 Trinidad and Tobago 51 Time to No. Procedure Cost to complete complete system) are sent to the Board of Inland Revenue (BIR) along with the utility rates and land and building taxes and property valuation for assessment. The last payment collected for Lands and Buildings Taxes was for the year 2009, so the 2009 receipts are used for all transactions. The assessment of stamp duty is determined by the type of property. The amount due is written on the document and then paid to the Board of Inland Revenue in Procedure 7. After closing, swear affidavits of witnesses TDD 5 per affidavit + 6 One of the witnesses to the execution of the memorandum of transfer 1 day TDD 2.50 exhibit fee signs before the Commissioner of Affidavits. Stamp Duty paid according to the following scale for non-residential properties: Present memorandum of transfer to be stamped at the Board of Inland Revenue Property value: Stamp Duty 7 1 day The amount of stamp duty is a percentage of the value of the property. • Less than TTD Stamp duty rate may be found at: www.ird.gov.tt 300,000: 2% • Between TTD 300,000 – 400,000: 5% • Greater than TTD 400,000: 7% Submit memorandum of transfer for registration and endorsement with the Land Registry Registration fee: For the RPA property, the Memorandum of Transfer and the original • Memorandum of duplicate certificate of title are submitted to the Land Registry and for Transfer and property under the Common Law system, the Deed is submitted. The Certificate of Title 8 Memorandum or Deed is given a unique barcode number upon 30-45 days (RPA): TDD $50 registration. With respect to the Memorandum, the volume and folio • Deed (Common number where the transaction can be found are provided. Law): TDD $100 + The registration/endorsement of the Instrument (Memorandum or Deed) may take 2-3 months in the case of RPA and less time unser the TDD 2 per page Common Law System. (copy of title deed) Registry prepares return of ownership form showing change in ownership for the purpose of property taxes 9 up to 4-6 weeks no cost For property under RPA the Purchaser's Attorney prepares the Return of Ownership form and forwards it to the Purchaser for filling. Under the Common Law, the Land Registry prepares the Return of Ownership Form. Doing Business 2013 Trinidad and Tobago 52 Time to No. Procedure Cost to complete complete The purchaser is required to attend the relevant District Revenue Office with a copy of the most recent lands and buildings tax receipts and the certified copy of their Deed. The District Revenue Office will then prepare the relevant return of ownership form. It may take 4-6 weeks for the return of ownership form to return to the new owner from the District Revenue Office. * Takes place simultaneously with another procedure. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 53 GETTING CREDIT Two types of frameworks can facilitate access to WHAT THE GETTING CREDIT INDICATORS credit and improve its allocation: credit information MEASURE systems and the legal rights of borrowers and lenders in collateral and bankruptcy laws. Credit information systems enable lenders to view a Strength of legal rights index (0–10) potential borrower‘s financial history (positive or Protection of rights of borrowers and lenders negative)—valuable information to consider when through collateral laws assessing risk. And they permit borrowers to Protection of secured creditors‘ rights through establish a good credit history that will allow easier bankruptcy laws access to credit. Sound collateral laws enable businesses to use their assets, especially movable Depth of credit information index (0–6) property, as security to generate capital—while Scope and accessibility of credit information strong creditors‘ rights have been associated with distributed by public credit registries and higher ratios of private sector credit to GDP. private credit bureaus What do the indicators cover? Public credit registry coverage (% of adults) Doing Business assesses the sharing of credit Number of individuals and firms listed in information and the legal rights of borrowers and public credit registry as percentage of adult lenders with respect to secured transactions population through 2 sets of indicators. The depth of credit Private credit bureau coverage (% of adults) information index measures rules and practices Number of individuals and firms listed in affecting the coverage, scope and accessibility of largest private credit bureau as percentage of credit information available through a public credit adult population registry or a private credit bureau. The strength of legal rights index measures whether certain features that facilitate lending exist within the applicable collateral and bankruptcy laws. Doing Business uses case scenarios to determine the scope of the  Has 100 employees. secured transactions system, involving a secured  Is 100% domestically owned, as is the lender. borrower and a secured lender and examining legal The ranking on the ease of getting credit is based on restrictions on the use of movable collateral. These the percentile rankings on the sum of its component scenarios assume that the borrower: indicators: the depth of credit information index and  Is a private, limited liability company. the strength of legal rights index.  Has its headquarters and only base of operations in the largest business city. Doing Business 2013 Trinidad and Tobago 54 GETTING CREDIT Where does the economy stand today? How well do the credit information system and Globally, Trinidad and Tobago stands at 23 in the collateral and bankruptcy laws in Trinidad and Tobago ranking of 185 economies on the ease of getting credit facilitate access to credit? The economy has a score of (figure 6.1). The rankings for comparator economies 4 on the depth of credit information index and a score and the regional average ranking provide other useful of 9 on the strength of legal rights index (see the information for assessing how well regulations and summary of scoring at the end of this chapter for institutions in Trinidad and Tobago support lending details). Higher scores indicate more credit information and borrowing. and stronger legal rights for borrowers and lenders. Figure 6.1 How Trinidad and Tobago and comparator economies rank on the ease of getting credit Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 55 GETTING CREDIT What are the changes over time? While the most recent Doing Business data reflect how show where institutions and regulations have been well the credit information system and collateral and strengthened—and where they have not (table 6.1). bankruptcy laws in Trinidad and Tobago support That can help identify where the potential for lending and borrowing today, data over time can help improvement is greatest. Table 6.1 The ease of getting credit in Trinidad and Tobago over time By Doing Business report year Indicator DB2005 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. .. 23 23 Strength of legal rights n.a. 9 9 9 9 9 9 9 9 index (0-10) Depth of credit n.a. 3 3 4 4 4 4 4 4 information index (0-6) Public registry n.a. n.a. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 coverage (% of adults) Private bureau n.a. n.a. 31.5 34.4 37.6 41.7 39.2 46.0 46.0 coverage (% of adults) Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 56 GETTING CREDIT One way to put an economy‘s score on the getting in 2012 and shows the number of economies with this credit indicators into context is to see where the score in 2012 as well as the regional average score. economy stands in the distribution of scores across Figure 6.3 shows the same thing for the depth of credit economies. Figure 6.2 highlights the score on the information index. strength of legal rights index for Trinidad and Tobago Figure 6.2 How strong are legal rights for borrowers Figure 6.3 How much credit information is shared— and lenders? and how widely? Number of economies with each score on strength of legal Number of economies with each score on depth of credit rights index (0–10), 2012 information index (0–6), 2012 Note: Higher scores indicate that collateral and bankruptcy Note: Higher scores indicate the availability of more credit laws are better designed to facilitate access to credit. information, from either a public credit registry or a private Source: Doing Business database. credit bureau, to facilitate lending decisions. Regional averages for the depth of credit information index exclude economies with no public registry or private bureau. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 57 GETTING CREDIT When economies strengthen the legal rights of lenders credit information, they can increase entrepreneurs‘ and borrowers under collateral and bankruptcy laws, access to credit. What credit reforms has Doing and increase the scope, coverage and accessibility of Business recorded in Trinidad and Tobago (table 6.2)? Table 6.2 How has Trinidad and Tobago made getting credit easier—or not? By Doing Business report year DB year Reform Utility companies are now included as providers of information DB2008 to credit bureaus increasing the credit information index. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 58 GETTING CREDIT What are the details? The getting credit indicators reported here for Trinidad The data on the legal rights of borrowers and lenders and Tobago are based on detailed information are gathered through a survey of financial lawyers and collected in that economy. The data on credit verified through analysis of laws and regulations as information sharing are collected through a survey of a well as public sources of information on collateral and public credit registry or private credit bureau (if one bankruptcy laws. For the strength of legal rights index, exists). To construct the depth of credit information a score of 1 is assigned for each of 8 aspects related to index, a score of 1 is assigned for each of 6 features of legal rights in collateral law and 2 aspects in the public credit registry or private credit bureau (see bankruptcy law. summary of scoring below). Summary of scoring for the getting credit indicators in Trinidad and Tobago Latin America & Trinidad and OECD high income Indicator Caribbean Tobago average average Strength of legal rights index (0-10) 9 6 7 Depth of credit information index (0-6) 4 5 5 Public registry coverage (% of adults) 0.0 26.1 31.5 Private bureau coverage (% of adults) 46.0 55.7 74.6 Note: In cases where an economy‘s regional classification is ―OECD high income,‖ regional averages above are only displayed once. Regional averages for the depth of credit information index exclude economies with no public registry or private bureau. Regional averages for the public registry coverage exclude economies with no public registry. Regional averages for the private bureau coverage exclude economies with no private bureau. Strength of legal rights index (0–10) Index score: 9 Can any business use movable assets as collateral while keeping possession of the assets; Yes and any financial institution accept such assets as collateral ? Does the law allow businesses to grant a non possessory security right in a single category Yes of movable assets, without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of Yes its assets, without requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend Yes automatically to the products, proceeds or replacements of the original assets ? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement Yes include a maximum amount for which the assets are encumbered? Is a collateral registry in operation, that is unified geographically and by asset type, with an Yes electronic database indexed by debtor's names? Doing Business 2013 Trinidad and Tobago 59 Strength of legal rights index (0–10) Index score: 9 Are secured creditors paid first (i.e. before general tax claims and employee claims) when a Yes debtor defaults outside an insolvency procedure? Are secured creditors paid first (i.e. before general tax claims and employee claims) when a No business is liquidated? Are secured creditors either not subject to an automatic stay or moratorium on enforcement procedures when a debtor enters a court-supervised reorganization procedure, or the law Yes provides secured creditors with grounds for relief from an automatic stay or Does the law allow parties to agree in a collateral agreement that the lender may enforce its Yes security right out of court, at the time a security interest is created? Private credit Public credit Depth of credit information index (0–6) Index score: 4 bureau registry Are data on both firms and individuals distributed? No No 0 Are both positive and negative data distributed? Yes No 1 Does the registry distribute credit information from retailers, trade creditors or utility companies as well Yes No 1 as financial institutions? Are more than 2 years of historical credit information Yes No 1 distributed? Is data on all loans below 1% of income per capita Yes No 1 distributed? Is it guaranteed by law that borrowers can inspect No No 0 their data in the largest credit registry? Note: An economy receives a score of 1 if there is a "yes" to either private bureau or public registry. Coverage Private credit bureau Public credit registry Number of firms 0 0 Number of individuals 448,192 0 Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 60 PROTECTING INVESTORS Investor protections matter for the ability of WHAT THE PROTECTING INVESTORS companies to raise the capital they need to grow, INDICATORS MEASURE innovate, diversify and compete. If the laws do not provide such protections, investors may be reluctant to invest unless they become the controlling Extent of disclosure index (0–10) shareholders. Strong regulations clearly define Who can approve related-party transactions related-party transactions, promote clear and efficient Disclosure requirements in case of related- disclosure requirements, require shareholder party transactions participation in major decisions of the company and set clear standards of accountability for company Extent of director liability index (0–10) insiders. Ability of shareholders to hold interested What do the indicators cover? parties and members of the approving body liable in case of related-party transactions Doing Business measures the strength of minority Available legal remedies (damages, repayment shareholder protections against directors‘ use of of profits, fines, imprisonment and rescission corporate assets for personal gain—or self-dealing. of the transaction) The indicators distinguish 3 dimensions of investor protections: transparency of related-party Ability of shareholders to sue directly or transactions (extent of disclosure index), liability for derivatively self-dealing (extent of director liability index) and Ease of shareholder suits index (0–10) shareholders‘ ability to sue officers and directors for Access to internal corporate documents misconduct (ease of shareholder suits index). The (directly or through a government inspector) ranking on the strength of investor protection index is the simple average of the percentile rankings on Documents and information available during these 3 indices. To make the data comparable across trial economies, a case study uses several assumptions Strength of investor protection index (0–10) about the business and the transaction. Simple average of the extent of disclosure, The business (Buyer): extent of director liability and ease of shareholder suits indices  Is a publicly traded corporation listed on the economy‘s most important stock exchange (or at least a large private company with multiple the company purchase used trucks from another shareholders). company he owns.  Has a board of directors and a chief executive  The price is higher than the going price for used officer (CEO) who may legally act on behalf of trucks, but the transaction goes forward. Buyer where permitted, even if this is not specifically required by law.  All required approvals are obtained, and all required disclosures made, though the transaction The transaction involves the following details: is prejudicial to Buyer.  Mr. James, a director and the majority  Shareholders sue the interested parties and the shareholder of the company, proposes that members of the board of directors. Doing Business 2013 Trinidad and Tobago 61 PROTECTING INVESTORS Where does the economy stand today? How strong are investor protections in Trinidad and protection index (figure 7.1). While the indicator does Tobago? The economy has a score of 6.7 on the not measure all aspects related to the protection of strength of investor protection index, with a higher minority investors, a higher ranking does indicate that score indicating stronger protections (see the an economy‘s regulations offer stronger investor summary of scoring at the end of this chapter for protections against self-dealing in the areas measured. details). Globally, Trinidad and Tobago stands at 25 in the ranking of 185 economies on the strength of investor Figure 7.1 How Trinidad and Tobago and comparator economies rank on the strength of investor protection index Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 62 PROTECTING INVESTORS What are the changes over time? While the most recent Doing Business data reflect how And the global ranking on the strength of investor well regulations in Trinidad and Tobago protect protection index over time shows whether the minority investors today, data over time show whether economy is slipping behind other economies in the protections have been strengthened (table 7.1). investor protections—or surpassing them. Table 7.1 The strength of investor protections in Trinidad and Tobago over time By Doing Business report year Indicator DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. 24 25 Extent of disclosure 4 4 4 4 4 4 4 4 index (0-10) Extent of director liability index (0- 9 9 9 9 9 9 9 9 10) Ease of shareholder 7 7 7 7 7 7 7 7 suits index (0-10) Strength of investor protection 6.7 6.7 6.7 6.7 6.7 6.7 6.7 6.7 index (0-10) Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 63 PROTECTING INVESTORS One way to put an economy‘s scores on the protecting 2012 and shows the number of economies with this investors indicators into context is to see where the score in 2012 as well as the regional average score. economy stands in the distribution of scores across Figure 7.3 shows the same thing for the extent of economies. Figure 7.2 highlights the score on the director liability index, and figure 7.4 for the ease of extent of disclosure index for Trinidad and Tobago in shareholder suits index. Figure 7.2 How strong are disclosure requirements? Figure 7.3 How strong is the liability regime for directors? Number of economies with each score on extent of Number of economies with each score on extent of director liability index (0–10), 2012 disclosure index (0–10), 2012 Note: Higher scores indicate greater liability of directors. Note: Higher scores indicate greater disclosure. No economy receives a score of 10 on the extent of Source: Doing Business database. director liability index. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 64 PROTECTING INVESTORS Figure 7.4 How easy is access to internal corporate documents? Number of economies with each score on ease of shareholder suits index (0–10), 2012 Note: Higher scores indicate greater powers of shareholders to challenge the transaction. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 65 PROTECTING INVESTORS The scores recorded over time for Trinidad and may be the changes over time in the regional average Tobago on the strength of investor protection index score on this index. may also be revealing (figure 7.5). Equally interesting Figure 7.5 Have investor protections become stronger over time? Strength of investor protection index (0–10) Note: The higher the score, the stronger the investor protections. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 66 PROTECTING INVESTORS Economies with the strongest protections of minority time. So reforms to strengthen investor protections investors from self-dealing require more disclosure may move ahead on different fronts—such as through and define clear duties for directors. They also have new or amended company laws or civil procedure well-functioning courts and up-to-date procedural rules. What investor protection reforms has Doing rules that give minority investors the means to prove Business recorded in Trinidad and Tobago (table 7.2)? their case and obtain a judgment within a reasonable Table 7.2 How has Trinidad and Tobago strengthened investor protections—or not? By Doing Business report year DB year Reform DB2008 No reform as measured by Doing Business. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 67 PROTECTING INVESTORS What are the details? The protecting investors indicators reported here for liability and ease of shareholder suits indices, a score is Trinidad and Tobago are based on detailed assigned for each of a range of conditions relating to information collected through a survey of corporate disclosure, director liability and shareholder suits in a and securities lawyers as well as on securities standard case study transaction (see the notes at the regulations, company laws and court rules of evidence. end of this chapter). The summary below shows the To construct the extent of disclosure, extent of director details underlying the scores for Trinidad and Tobago. Summary of scoring for the protecting investors indicators in Trinidad and Tobago Latin America & Trinidad and OECD high income Indicator Caribbean Tobago average average Extent of disclosure index (0-10) 4 4 6 Extent of director liability index (0-10) 9 5 5 Ease of shareholder suits index (0-10) 7 6 7 Strength of investor protection index (0-10) 6.7 5.0 6.1 Note: In cases where an economy‘s regional classification is ―OECD high income,‖ regional averages above are only displayed once. Score Score description Extent of disclosure index (0-10) 4 What corporate body provides legally sufficient Board of directors and Mr. James is 2 approval for the transaction? not allowed to vote Whether disclosure of the conflict of interest by Mr. 2 Full disclosure of all material facts James to the board of directors is required? Whether immediate disclosure of the transaction to 0 No disclosure obligation the public and/or shareholders is required? Whether disclosure of the transaction in published 0 No disclosure obligation periodic filings (annual reports) is required? Whether an external body must review the terms of 0 No the transaction before it takes place? Extent of director liability index (0-10) 9 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction 1 Yes causes to the company? Doing Business 2013 Trinidad and Tobago 68 Score Score description Whether shareholders can hold Mr. James liable for Liable for unfair/oppressive the damage that the Buyer-Seller transaction causes 2 transaction or prejudicial to minority to the company? shareholders Whether shareholders can hold members of the Liable for unfair/oppressive approving body liable for the damage that the Buyer- 2 transaction or prejudicial to minority Seller transaction causes to the company? shareholders Whether a court can void the transaction upon a Possible when the transaction is unfair 2 successful claim by a shareholder plaintiff? or entails a conflict of interest Whether Mr. James pays damages for the harm caused to the company upon a successful claim by 1 Yes the shareholder plaintiff? Whether Mr. James repays profits made from the transaction upon a successful claim by the 1 Yes shareholder plaintiff? Whether fines and imprisonment can be applied 0 No against Mr. James? Ease of shareholder suits index (0-10) 7 Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before 0 No filing suit? Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the 0 No transaction? Whether the plaintiff can obtain any documents from Any information that is relevant to the 3 the defendant and witnesses during trial? subject matter of the claim Whether the plaintiff can request categories of documents from the defendant without identifying 1 Yes specific ones? Whether the plaintiff can directly question the 2 Yes, without approval from the judge defendant and witnesses during trial? Whether the level of proof required for civil suits is 1 Yes lower than that of criminal cases? Strength of investor protection index (0-10) 6.7 Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 69 PAYING TAXES Taxes are essential. They fund the public amenities, WHAT THE PAYING TAXES INDICATORS infrastructure and services that are crucial for a MEASURE properly functioning economy. But the level of tax rates needs to be carefully chosen—and needless Tax payments for a manufacturing company complexity in tax rules avoided. According to in 2011 (number per year adjusted for Doing Business data, in economies where it is more electronic or joint filing and payment) difficult and costly to pay taxes, larger shares of economic activity end up in the informal sector — Total number of taxes and contributions paid, where businesses pay no taxes at all. including consumption taxes (value added tax, sales tax or goods and service tax) What do the indicators cover? Method and frequency of filing and payment Using a case scenario, Doing Business measures Time required to comply with 3 major taxes the taxes and mandatory contributions that a (hours per year) medium-size company must pay in a given year as well as the administrative burden of paying taxes Collecting information and computing the tax and contributions. This case scenario uses a set of payable financial statements and assumptions about Completing tax return forms, filing with transactions made over the year. Information is proper agencies also compiled on the frequency of filing and Arranging payment or withholding payments as well as time taken to comply with tax laws. The ranking on the ease of paying taxes is Preparing separate tax accounting books, if the simple average of the percentile rankings on required its component indicators: number of annual Total tax rate (% of profit before all taxes) payments, time and total tax rate, with a threshold 1 Profit or corporate income tax being applied to the total tax rate. To make the data comparable across economies, several Social contributions and labor taxes paid by assumptions about the business and the taxes and the employer contributions are used. Property and property transfer taxes  TaxpayerCo is a medium-size business that Dividend, capital gains and financial started operations on January 1, 2010. transactions taxes  The business starts from the same financial Waste collection, vehicle, road and other taxes position in each economy. All the taxes  Taxes and mandatory contributions include and mandatory contributions paid during corporate income tax, turnover tax and all the second year of operation are recorded. labor taxes and contributions paid by the  Taxes and mandatory contributions are company. measured at all levels of government.  A range of standard deductions and exemptions are also recorded. 1 The threshold is defined as the highest total tax rate among the top 15% of economies in the ranking on the total tax rate. It is calculated and adjusted on a yearly basis. The threshold is not based on any economic theory of an ―optimal tax rate‖ that minimizes distortions or maximizes efficiency in the tax system of an economy overall. Instead, it is mainly empirical in nature, set at the lower end of the distribution of tax rates levied on medium-size enterprises in the manufacturing sector as observed through the paying taxes indicators. This reduces the bias in the indicators toward economies that do not need to levy significant taxes on companies like the Doing Business standardized case study company because they raise public revenue in other ways—for example, through taxes on foreign companies, through taxes on sectors other than manufacturing or from natural resources (all of which are outside the scope of the methodology). This year‘s threshold is 25.7%. Doing Business 2013 Trinidad and Tobago 70 PAYING TAXES Where does the economy stand today? What is the administrative burden of complying with Globally, Trinidad and Tobago stands at 90 in the taxes in Trinidad and Tobago—and how much do firms ranking of 185 economies on the ease of paying taxes pay in taxes? On average, firms make 39 tax payments (figure 8.1). The rankings for comparator economies a year, spend 210 hours a year filing, preparing and and the regional average ranking provide other useful paying taxes and pay total taxes amounting to 29.1% information for assessing the tax compliance burden of profit (see the summary at the end of this chapter for businesses in Trinidad and Tobago. for details). Figure 8.1 How Trinidad and Tobago and comparator economies rank on the ease of paying taxes Note: DB2013 rankings reflect changes to the methodology. For all economies with a total tax rate below the threshold of 25.7% applied in DB2013, the total tax rate is set at 25.7% for the purpose of calculating the ranking on the ease of paying taxes. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 71 PAYING TAXES What are the changes over time? While the most recent Doing Business data reflect how aspects of the process have changed — and which easy (or difficult) it is to comply with tax rules in have not (table 8.1). That can help identify where the Trinidad and Tobago today, data over time show which potential for easing tax compliance is greatest. Table 8.1 The ease of paying taxes in Trinidad and Tobago over time By Doing Business report year Indicator DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. 86 90 Payments (number per 40 40 40 40 40 40 39 39 year) Time (hours per year) 210 210 210 210 210 210 210 210 Total tax rate (% profit) 37.0 37.2 33.1 33.1 33.1 33.1 29.1 29.1 Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. DB2013 rankings reflect changes to the methodology. For all economies with a total tax rate below the threshold of 25.7% applied in DB2013, the total tax rate is set at 25.7% for the purpose of calculating the ranking on the ease of paying taxes. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 72 PAYING TAXES Equally helpful may be the benchmarks provided by possible in easing the administrative burden of tax the economies that over time have had the best compliance. And changes in regional averages can performance regionally or globally on the number of show where Trinidad and Tobago is keeping up—and payments or the time required to prepare and file where it is falling behind. taxes (figure 8.2). These benchmarks help show what is Figure 8.2 Has paying taxes become easier over time? Payments (number per year) Time (hours per year) Doing Business 2013 Trinidad and Tobago 73 PAYING TAXES Total tax rate (% of profit) Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 74 PAYING TAXES Economies around the world have made paying taxes concrete results. Some economies simplifying tax faster and easier for businesses—such as by payment and reducing rates have seen tax revenue consolidating filings, reducing the frequency of rise. What tax reforms has Doing Business recorded in payments or offering electronic filing and payment. Trinidad and Tobago (table 8.2)? Many have lowered tax rates. Changes have brought Table 8.2 How has Trinidad and Tobago made paying taxes easier—or not? By Doing Business report year DB year Reform Trinidad and Tobago reduced the tax burden for companies by DB2008 reducing the CIT. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 75 PAYING TAXES What are the details? The indicators reported here for Trinidad and LOCATION OF STANDARDIZED COMPANY Tobago are based on a standard set of taxes and contributions that would be paid by the case study company used by Doing Business in collecting the City: Port of Spain data (see the section in this chapter on what the indicators cover). Tax practitioners are asked to review standard financial statements as well as a standard list of transactions that the company The taxes and contributions paid are listed in the completed during the year. Respondents are asked summary below, along with the associated number of how much in taxes and mandatory contributions payments, time and tax rate. the business must pay and what the process is for doing so. Summary of tax rates and administrative burden in Trinidad and Tobago Latin America & Trinidad and OECD high income Indicator Caribbean Tobago average average Payments (number per year) 39 30 12 Time (hours per year) 210 367 176 Profit tax (%) 21.6 21.5 15.2 Labor tax and contributions (%) 5.8 14.4 23.8 Other taxes (%) 1.8 11.3 3.7 Total tax rate (% profit) 29.1 47.2 42.7 Note: In cases where an economy‘s regional classification is ―OECD high income,‖ regional averages above are only displayed once. Total tax Tax or mandatory Payments Notes on Time Statutory Notes on Tax base rate (% of contribution (number) payments (hours) tax rate total tax rate profit) taxable Corporate income tax 4 45 25% 21.6 profit gross Social Security Contributions 12 75 various rates 5.1 salaries turnover Environmental tax 4 0 0% 1.8 and interest Doing Business 2013 Trinidad and Tobago 76 Total tax Tax or mandatory Payments Notes on Time Statutory Notes on Tax base rate (% of contribution (number) payments (hours) tax rate total tax rate profit) per Health insurance contributions 12 0 TTD 8.52 employee 0.6 per week Value added tax (VAT) 6 90 15% value added 0 not included Stamp duty 1 0 varies 0 small amount Totals 39 210 29.1 Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 77 TRADING ACROSS BORDERS In today‘s globalized world, making trade between WHAT THE TRADING ACROSS BORDERS economies easier is increasingly important for INDICATORS MEASURE business. Excessive document requirements, burdensome customs procedures, inefficient port operations and inadequate infrastructure all lead to Documents required to export and import extra costs and delays for exporters and importers, (number) stifling trade potential. Research shows that Bank documents exporters in developing countries gain more from Customs clearance documents a 10% drop in their trading costs than from a similar reduction in the tariffs applied to their Port and terminal handling documents products in global markets. Transport documents What do the indicators cover? Time required to export and import (days) Doing Business measures the time and cost Obtaining, filling out and submitting all the (excluding tariffs and the time and cost for sea documents transport) associated with exporting and importing Inland transport and handling a standard shipment of goods by sea transport, and the number of documents necessary to Customs clearance and inspections complete the transaction. The indicators cover Port and terminal handling procedural requirements such as documentation Does not include sea transport time requirements and procedures at customs and other regulatory agencies as well as at the port. They also Cost required to export and import (US$ per cover trade logistics, including the time and cost of container) inland transport to the largest business city. The All documentation ranking on the ease of trading across borders is the simple average of the percentile rankings on its Inland transport and handling component indicators: documents, time and cost Customs clearance and inspections to export and import. Port and terminal handling To make the data comparable across economies, Official costs only, no bribes Doing Business uses several assumptions about the business and the traded goods. The business:  Is of medium size and employs 60 people.  Do not require refrigeration or any other special environment.  Is located in the periurban area of the economy‘s largest business city.  Do not require any special phytosanitary or environmental safety standards other than  Is a private, limited liability company, accepted international standards. domestically owned, formally registered and operating under commercial laws and  Are one of the economy‘s leading export or regulations of the economy. import products. The traded goods:  Are transported in a dry-cargo, 20-foot full container load.  Are not hazardous nor do they include military items. Doing Business 2013 Trinidad and Tobago 78 TRADING ACROSS BORDERS Where does the economy stand today? What does it take to export or import in Trinidad and Globally, Trinidad and Tobago stands at 75 in the Tobago? According to data collected by Doing ranking of 185 economies on the ease of trading Business, exporting a standard container of goods across borders (figure 9.1). The rankings for requires 5 documents, takes 11 days and costs $843. comparator economies and the regional average Importing the same container of goods requires 10 ranking provide other useful information for assessing documents, takes 14 days and costs $1260 (see the how easy it is for a business in Trinidad and Tobago to summary of procedures and documents at the end of export and import goods. this chapter for details). Figure 9.1 How Trinidad and Tobago and comparator economies rank on the ease of trading across borders Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 79 TRADING ACROSS BORDERS What are the changes over time? While the most recent Doing Business data reflect how of the process have changed—and which have not easy (or difficult) it is to export or import in Trinidad (table 9.1). That can help identify where the potential and Tobago today, data over time show which aspects for improvement is greatest. Table 9.1 The ease of trading across borders in Trinidad and Tobago over time By Doing Business report year Indicator DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. 84 75 Documents to export 5 5 5 5 5 5 5 5 (number) Time to export (days) 14 14 14 14 14 14 14 11 Cost to export (US$ per 693 693 693 866 866 808 843 843 container) Documents to import 10 10 10 10 10 10 10 10 (number) Time to import (days) 26 26 26 26 26 19 19 14 Cost to import (US$ per 1,100 1,100 1,100 1,100 1,100 1,250 1,260 1,260 container) Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 80 TRADING ACROSS BORDERS Equally helpful may be the benchmarks provided by These benchmarks help show what is possible in the economies that over time have had the best making it easier to trade across borders. And changes performance regionally or globally on the documents, in regional averages can show where Trinidad and time or cost required to export or import (figure 9.2). Tobago is keeping up—and where it is falling behind. Figure 9.2 Has trading across borders become easier over time? Documents to export (number) Time to export (days) Doing Business 2013 Trinidad and Tobago 81 TRADING ACROSS BORDERS Cost to export (US$ per container) Documents to import (number) Doing Business 2013 Trinidad and Tobago 82 TRADING ACROSS BORDERS Time to import (days) Cost to import (US$ per container) Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 83 TRADING ACROSS BORDERS In economies around the world, trading across borders systems. These changes help improve the trading as measured by Doing Business has become faster and environment and boost firms‘ international easier over the years. Governments have introduced competitiveness. What trade reforms has Doing tools to facilitate trade—including single windows, Business recorded in Trinidad and Tobago (table 9.2)? risk-based inspections and electronic data interchange Table 9.2 How has Trinidad and Tobago made trading across borders easier—or not? By Doing Business report year DB year Reform DB2008 No reform as measured by Doing Business. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. Trinidad and Tobago reduced the time to export and import by launching the ASYCUDA World electronic data interchange DB2013 system and simplifying the process for obtaining a certificate of origin. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 84 TRADING ACROSS BORDERS What are the details? The indicators reported here for Trinidad and LOCATION OF STANDARDIZED COMPANY Tobago are based on a set of specific procedural requirements for trading a standard shipment of goods by ocean transport (see the section in this City: Port of Spain chapter on what the indicators cover). Information on the procedures as well as the required documents and the time and cost to complete each The procedural requirements, and the associated time procedure is collected from local freight forwarders, and cost, for exporting and importing a standard shipping lines, customs brokers, port officials and shipment of goods are listed in the summary below, banks. along with the required documents. Summary of procedures and documents for trading across borders in Trinidad and Tobago Latin America & Trinidad and OECD high income Indicator Caribbean Tobago average average Documents to export (number) 5 6 4 Time to export (days) 11 17 10 Cost to export (US$ per container) 843 1,268 1,028 Documents to import (number) 10 7 5 Time to import (days) 14 19 10 Cost to import (US$ per container) 1,260 1,612 1,080 Note: In cases where an economy‘s regional classification is ―OECD high income,‖ regional averages above are only displayed once. Procedures to export Time (days) Cost (US$) Documents preparation 5 253 Customs clearance and technical control 1 205 Ports and terminal handling 2 160 Inland transportation and handling 3 225 Totals 11 843 Procedures to import Time (days) Cost (US$) Documents preparation 6 360 Doing Business 2013 Trinidad and Tobago 85 Procedures to import Time (days) Cost (US$) Customs clearance and technical control 3 350 Ports and terminal handling 3 350 Inland transportation and handling 2 200 Totals 14 1,260 Documents to export Documents to import Bill of lading Bill of Lading CARICOM Invoice / Certificate of Origin C 75 declaration form Commercial invoice CARICOM invoice / Certificate of Origin Customs export declaration (Form C82) Commercial invoice Packing list Confirmation receipt of payment for customs related fees Source: Doing Business database. Customs import declaration (Form C 82) Delivery note to exit the port Delivery order Packing list Technical standard certificate Doing Business 2013 Trinidad and Tobago 86 ENFORCING CONTRACTS Well-functioning courts help businesses expand WHAT THE ENFORCING CONTRACTS their network and markets. Without effective INDICATORS MEASURE contract enforcement, people might well do business only with family, friends and others with whom they have established relationships. Where Procedures to enforce a contract through contract enforcement is efficient, firms are more the courts (number) likely to engage with new borrowers or customers, Any interaction between the parties in a and they have greater access to credit. commercial dispute, or between them and the judge or court officer What do the indicators cover? Steps to file and serve the case Doing Business measures the efficiency of the judicial system in resolving a commercial dispute Steps for trial and judgment before local courts. Following the step-by-step Steps to enforce the judgment evolution of a standardized case study, it collects Time required to complete procedures data relating to the time, cost and procedural (calendar days) complexity of resolving a commercial lawsuit. The ranking on the ease of enforcing contracts is the Time to file and serve the case simple average of the percentile rankings on its Time for trial and obtaining judgment component indicators: procedures, time and cost. Time to enforce the judgment The dispute in the case study involves the breach of a sales contract between 2 domestic businesses. Cost required to complete procedures (% of The case study assumes that the court hears an claim) expert on the quality of the goods in dispute. This No bribes distinguishes the case from simple debt Average attorney fees enforcement. To make the data comparable across economies, Doing Business uses several Court costs assumptions about the case: Enforcement costs  The seller and buyer are located in the economy‘s largest business city.  The buyer orders custom-made goods,  The dispute on the quality of the goods then fails to pay. requires an expert opinion.  The seller sues the buyer before a  The judge decides in favor of the seller; there competent court. is no appeal.  The value of the claim is 200% of income  The seller enforces the judgment through a per capita. public sale of the buyer‘s movable assets.  The seller requests a pretrial attachment to secure the claim. Doing Business 2013 Trinidad and Tobago 87 ENFORCING CONTRACTS Where does the economy stand today? How efficient is the process of resolving a commercial Globally, Trinidad and Tobago stands at 170 in the dispute through the courts in Trinidad and Tobago? ranking of 185 economies on the ease of enforcing According to data collected by Doing Business, contracts (figure 10.1). The rankings for comparator enforcing a contract takes 1340 days, costs 33.5% of economies and the regional average ranking provide the value of the claim and requires 42 procedures (see other useful benchmarks for assessing the efficiency of the summary at the end of this chapter for details). contract enforcement in Trinidad and Tobago. Figure 10.1 How Trinidad and Tobago and comparator economies rank on the ease of enforcing contracts Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 88 ENFORCING CONTRACTS What are the changes over time? While the most recent Doing Business data reflect how over time help identify which areas have changed and easy (or difficult) it is to enforce a contract in Trinidad where the potential for improvement is greatest (table and Tobago today, data on the underlying indicators 10.1). Table 10.1 The ease of enforcing contracts in Trinidad and Tobago over time By Doing Business report year Indicator DB2004 DB2005 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. .. .. 171 170 Time (days) n.a. n.a. 1,340 1,340 1,340 1,340 1,340 1,340 1,340 1,340 Cost (% of claim) n.a. n.a. 33.5 33.5 33.5 33.5 33.5 33.5 33.5 33.5 Procedures (number) n.a. n.a. 42 42 42 42 42 42 42 42 Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 89 ENFORCING CONTRACTS Equally helpful may be the benchmarks provided by help show what is possible in improving the efficiency the economies that over time have had the best of contract enforcement. And changes in regional performance regionally or globally on the number of averages can show where Trinidad and Tobago is steps, time or cost required to enforce a contract keeping up—and where it is falling behind. through the courts (figure 10.2). These benchmarks Figure 10.2 Has enforcing contracts become easier over time? Time (days) Cost (% of claim) Doing Business 2013 Trinidad and Tobago 90 ENFORCING CONTRACTS Procedures (number) Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 91 ENFORCING CONTRACTS Economies in all regions have improved contract periodic reviews to clear inactive cases from the docket enforcement in recent years. A judiciary can be and by making procedures faster. What reforms improved in different ways. Higher-income economies making it easier (or more difficult) to enforce contracts tend to look for ways to enhance efficiency by has Doing Business recorded in Trinidad and Tobago introducing new technology. Lower-income economies (table 10.2)? often work on reducing backlogs by introducing Table 10.2 How has Trinidad and Tobago made enforcing contracts easier—or not? By Doing Business report year DB year Reform DB2008 No reform as measured by Doing Business. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 92 ENFORCING CONTRACTS What are the details? The indicators reported here for Trinidad and COMPETENT COURT Tobago are based on a set of specific procedural steps required to resolve a standardized commercial dispute through the courts (see the City: Port of Spain section in this chapter on what the indicators cover). These procedures, and the time and cost of The procedures for resolving a commercial lawsuit, and completing them, are identified through study of the associated time and cost, are listed in the summary the codes of civil procedure and other court below. regulations, as well as through surveys completed by local litigation lawyers (and, in a quarter of the economies covered by Doing Business, by judges as well). Summary of procedures for enforcing a contract in Trinidad and Tobago—and the time and cost Latin America & Trinidad and OECD high income Indicator Caribbean Tobago average average Time (days) 1,340 727 510 Filing and service 85 Trial and judgment 1,195 Enforcement of judgment 60 Cost (% of claim) 33.5 30.8 20.1 Attorney cost (% of claim) 30.4 Court cost (% of claim) 0.1 Enforcement Cost (% of claim) 3.0 Procedures (number) 42 40 31 Note: In cases where an economy‘s regional classification is ―OECD high income,‖ regional averages above are only displayed once. Doing Business 2013 Trinidad and Tobago 93 ENFORCING CONTRACTS No. Procedure Filing and service: 1 Plaintiff requests payment: Plaintiff or his lawyer asks Defendant orally or in writing to comply with the contract. 2 Plaintiff’s hiring of lawyer: Plaintiff hires a lawyer to represent him before the court. Plaintiff’s filing of summons and complaint: Plaintiff files his summons and complaint with the court, orally or in * writing. * Plaintiff’s payment of court fees: Plaintiff pays court duties, stamp duties, or any other type of court fee. Registration of court case: The court administration registers the lawsuit or court case. This includes assigning a 3 reference number to the lawsuit or court case. Assignment of court case to a judge: The court case is assigned to a specific judge through a random procedure, * automated system, ruling of an administrative judge, court officer, etc. Arrangements for physical delivery of summons and complaint: Plaintiff takes whatever steps are necessary to * arrange for physical service of process on Defendant, such as instructing a court officer or a (private) bailiff. First attempt at physical delivery: A first attempt to physically deliver summons and complaint to Defendant is 4 successful in the majority of cases. * Proof of service: Plaintiff submits proof of service to court. Application for pre-judgment attachment: Plaintiff submits an application in writing for the attachment of * Defendant's property prior to judgment. (see assumption 5) Decision on pre-judgment attachment: The judge decides whether to grant Plaintiff‘s request for pre-judgment * attachment of Defendant‘s property and notifies Plaintiff and Defendant of the decision. Th is step may include requesting that Plaintiff submit guarantees or bonds to secure Defendant Pre-judgment attachment.: Defendant's property is attached prior to judgment. Attachment is either physical or 5 achieved by registering, marking, debiting or separating assets. (see assumption 5) Trial and judgment: Defendant’s filing of defense or answer to Plaintiff’s claim: Defendant files a written pleading which includes his 6 defense or answer on the merits of the case. Defendant's written answer may or may not include witness statements, expert statements, the documents Defendant relies on as evidence and the legal authori Plaintiff’s written response to Defendant's defense or answer: Plaintiff responds to Defendant‘s defense or 7 answer with a written pleading. Plaintiff's answer may or may not include a witness statements or expert (witness) statements. Filing of pleadings: Plaintiff and Defendant file written pleadings and submissions with the court and transmit 8 copies of the written pleadings or submissions to one another. The pleadings may or may not include witness statements or expert (witness) statements. Adjournments: Court procedure is delayed because one or both parties request and obtain an adjournment to 9 submit written pleadings. Doing Business 2013 Trinidad and Tobago 94 No. Procedure Court’s mailing of allocation questionnaire to parties: The court mails a questionnaire to the parties asking each * to allocate the case among different case-tracks (for example, multi track, fast track) and asking each to frame the issues for trial. Parties’ answer to court's allocation questionnaire: Parties submit their completed allocation questionnaires to 10 the court (including their answers regarding case-tracks and the issues for trial). 11 Framing of issues: Plaintiff and Defendant assist the court in framing issues on which evidence is to be presented. Pre-trial conference on procedure: The judge meets with the parties to discuss procedural issues (for example 12 which applications and motions parties intend to file, which documents parties intend to rely on, what will be presented as evidence the oral hearing or trial, etc.) * Request for interlocutory order: Defendant raises preliminary issues, such as jurisdiction, statute of limitation, etc. Court’s issuance of interlocutory order: Court decides the preliminary issues the Defendant raised by issuing an * interlocutory order. Plaintiff’s appeal of court's interlocutory order: Plaintiff appeals the court's interlocutory order, which suspends 13 the court proceedings. Discovery requests: Plaintiff and Defendant make requests for the disclosure of documents, attempting to force the * other party to reveal potentially detrimental documents. Discovery disputes: Following a request for discovery of documentary evidence, the other party disputes the 14 request and calls upon the judge to decide the issue. * Setting of date(s) for oral hearing or trial: The judge sets the date(s) for the oral hearing or trial. Pre-trial conference aimed at preparing for trial: The judge meets with parties to make practical arrangements 15 for the trial (for example, the number of witnesses parties intend to call on during trial, how much time each party is given to present oral arguments etc.). * List of (expert) witnesses: The parties file a list of (expert) witnesses with the court. (see assumption 6-a) Adjournments: Court proceedings are delayed because one or both parties request and obtain an adjournment to 16 prepare for the oral hearing or trial. Trial (prevalent in common law): The parties argue the merits of the case at (an) oral session(s) before the court. 17 Witnesses and expert witnesses are questioned and cross-examined during trial. Adjournments: Court proceedings are delayed because one or both parties request and obtain an adjournment 18 during the oral hearing or trial, resulting in an additional or later trial or hearing date. Order for submission of final arguments: The judge sets the deadline for the submission of final factual and legal 19 arguments. Final arguments: The parties present their final factual and legal arguments to the court either by oral presentation * or by a written submission. 20 Judgment date: The judge sets a date for delivery of the judgment. 21 Notification of judgment in court: The parties are notified of the judgment at a court hearing. 22 Writing of judgment: The judge produces a written copy of the judgment. Doing Business 2013 Trinidad and Tobago 95 No. Procedure 23 Registration of judgment: The court office registers the judgment after receiving a written copy of the judgment. Court notification of availability of the written judgment: The court notifies the parties that the written 24 judgment is available at the courthouse. 25 Plaintiff's receipt of a copy of written judgment: Plaintiff receives a copy of the written judgment. Notification of Defendant of judgment: Plaintiff or court formally notifies the Defendant of the judgment. The 26 appeal period starts to run the day the Defendant is formally notified of the judgment. Appeal period: By law, Defendant has the opportunity to appeal the judgment during a period specified in the law. 27 Defendant decides not to appeal. Judgment becomes final the day the appeal period ends. Reimbursement by Defendant of Plaintiff's court fees: The judgment obliges Defendant to reimburse Plaintiff for 28 the court fees Plaintiff has advanced, because Defendant has lost the case. Enforcement of judgment: Plaintiff’s hiring of lawyer: Plaintiff hires a lawyer to enforce the judgment or continues to be represented by a * lawyer during the enforcement of judgment phase. Plaintiff's approaching of court enforcement officer or (private) bailiff to enforce the judgment: To enforce 29 the judgment, Plaintiff approaches a court enforcement officer such as a court bailiff or sheriff, or a private bailiff. Plaintiff’s request for enforcement order: Plaintiff applies to the court to obtain the enforcement order ('seal' on * judgment). 30 Plaintiff’s advancement of enforcement fees: Plaintiff pays the fees related to the enforcement of the judgment. Attachment of enforcement order to judgment: The judge attaches the enforcement order (‗seal‘) to the 31 judgment. Delivery of enforcement order: The court's enforcement order is delivered to a court enforcement officer or a * (private) bailiff. Judge's order for physical enforcement: The judge orders the police to assist with the physical enforcement of the 32 attachment of Defendant's movable goods. Identification of Defendant's assets for attachment by court official or Defendant: Judge, a court enforcement 33 officer, a (private) bailiff or the Defendant himself identifies Defendant's movable assets for attachment. 34 Attachment: Defendant‘s movable goods are attached (physically or by registering, marking or separating assets). Report on execution of attachment: A court enforcement officer or private process server delivers a report on the 35 attachment of Defendant's movable goods to the judge. Valuation or appraisal of attached movable goods: The court or court appointed valuation expert evaluates the 36 attached goods. Enforcement disputes before court: The enforcement of the judgment is delayed because Defendant opposes 37 aspects of the enforcement process before the judge. Call for public auction: The judge calls a public auction by, for example, advertising or publication in the 38 newspapers. 39 Sale through public auction: The Defendant‘s movable property is sold at public auction. Doing Business 2013 Trinidad and Tobago 96 No. Procedure Distribution of proceeds: The proceeds of the public auction are distributed to various creditors (including 40 Plaintiff), according to the rules of priority. Reimbursement of Plaintiff’s enforcement fees: Defendant reimburses Plaintiff's enforcement fees which Plaintiff 41 had advanced previously. 42 Payment: Court orders that the proceeds of the public auction or the direct sale be delivered to Plaintiff. * Takes place simultaneously with another procedure. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 97 RESOLVING INSOLVENCY A robust bankruptcy system functions as a filter, WHAT THE RESOLVING INSOLVENCY ensuring the survival of economically efficient companies and reallocating the resources of INDICATORS MEASURE inefficient ones. Fast and cheap insolvency proceedings result in the speedy return of Time required to recover debt (years) businesses to normal operation and increase Measured in calendar years returns to creditors. By improving the expectations of creditors and debtors about the outcome of Appeals and requests for extension are insolvency proceedings, well-functioning included insolvency systems can facilitate access to finance, Cost required to recover debt (% of debtor’s save more viable businesses and thereby improve estate) growth and sustainability in the economy overall. Measured as percentage of estate value What do the indicators cover? Court fees Doing Business studies the time, cost and outcome Fees of insolvency administrators of insolvency proceedings involving domestic entities. It does not measure insolvency Lawyers‘ fees proceedings of individuals and financial Assessors‘ and auctioneers‘ fees institutions. The data are derived from survey Other related fees responses by local insolvency practitioners and verified through a study of laws and regulations as Recovery rate for creditors (cents on the well as public information on bankruptcy systems. dollar) The ranking on the ease of resolving insolvency is Measures the cents on the dollar recovered based on the recovery rate, which is recorded as by creditors cents on the dollar recouped by creditors through Present value of debt recovered reorganization, liquidation or debt enforcement Official costs of the insolvency proceedings (foreclosure) proceedings. The recovery rate is a are deducted function of time, cost and other factors, such as lending rate and the likelihood of the company Depreciation of furniture is taken into continuing to operate. account To make the data comparable across economies, Outcome for the business (survival or not) Doing Business uses several assumptions about the affects the maximum value that can be recovered business and the case. It assumes that the company:  Is a domestically owned, limited liability company operating a hotel.  Has 201 employees, 1 main secured creditor  Operates in the economy‘s largest business and 50 unsecured creditors. city.  Has a higher value as a going concern—and the efficient outcome is either reorganization or sale as a going concern, not piecemeal liquidation. Doing Business 2013 Trinidad and Tobago 98 RESOLVING INSOLVENCY Where does the economy stand today? Speed, low costs and continuation of viable businesses sold as piecemeal sale. The average recovery rate is characterize the top-performing economies. How 18.4 cents on the dollar. efficient are insolvency proceedings in Trinidad and Globally, Trinidad and Tobago stands at 135 in the Tobago? According to data collected by Doing ranking of 185 economies on the ease of resolving Business, resolving insolvency takes 4.0 years on insolvency (figure 11.1). The rankings for comparator average and costs 25% of the debtor‘s estate, with the economies and the regional average ranking provide most likely outcome being that the company will be other useful benchmarks for assessing the efficiency of insolvency proceedings in Trinidad and Tobago. Figure 11.1 How Trinidad and Tobago and comparator economies rank on the ease of resolving insolvency Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 99 RESOLVING INSOLVENCY What are the changes over time? While the most recent Doing Business data reflect the efficiency has changed—and where it has not (table efficiency of insolvency proceedings in Trinidad and 11.1). That can help identify where the potential for Tobago today, data over time show where the improvement is greatest. Table 11.1 The ease of resolving insolvency in Trinidad and Tobago over time By Doing Business report year Indicator DB2004 DB2005 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. .. .. 136 135 Time (years) n.a. n.a. 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 Cost (% of estate) n.a. n.a. 25 25 25 25 25 25 25 25 Recovery rate (cents on the n.a. n.a. 17.5 17.6 16.0 16.0 16.0 16.7 17.9 18.4 dollar) Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data correction s and the addition of 2 economies (Barbados and Malta) to the sample this year. ―No practice‖ indicates that in each of the previous 5 years the economy had no cases involving a judicial reorganization, judicial liquidation or debt enforcement procedure (foreclosure). This means that creditors are unlikely to recover their money through a formal legal process (in or out of court). The recovery rate for ―no practice‖ economies is 0. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 100 RESOLVING INSOLVENCY Equally helpful may be the benchmarks provided by possible in improving the efficiency of insolvency the economies that over time have had the best proceedings. And changes in regional averages can performance regionally or globally on the time or cost show where Trinidad and Tobago is keeping up—and of insolvency proceedings or on the recovery rate where it is falling behind. (figure 11.2). These benchmarks help show what is Figure 11.2 Has resolving insolvency become easier over time? Time (years) Cost (% of estate) Doing Business 2013 Trinidad and Tobago 101 RESOLVING INSOLVENCY Recovery rate (cents on the dollar) Note: Regional averages on time and cost exclude economies with a “no practice� mark. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 102 RESOLVING INSOLVENCY A well-balanced bankruptcy system distinguishes change. Many recent reforms of bankruptcy laws have companies that are financially distressed but been aimed at helping more of the viable businesses economically viable from inefficient companies that survive. What insolvency reforms has Doing Business should be liquidated. But in some insolvency systems recorded in Trinidad and Tobago (table 11.2)? even viable businesses are liquidated. This is starting to Table 11.2 How has Trinidad and Tobago made resolving insolvency easier—or not? By Doing Business report year DB year Reform DB2008 No reform as measured by Doing Business. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 103 EMPLOYING WORKERS Doing Business measures flexibility in the regulation of Particular data for Trinidad and Tobago are presented employment, specifically as it affects the hiring and here without scoring. redundancy of workers and the rigidity of working hours. From 2007 to 2011 improvements were made to To make the data on employing workers comparable align the methodology for the employing workers across economies, several assumptions about the indicators with the letter and spirit of the International worker and the business are used. Labour Organization (ILO) conventions. Only 4 of the 188 ILO conventions cover areas measured by Doing The worker: Business: employee termination, weekend work, holiday with pay and night work. The Doing Business  Earns a salary plus benefits equal to the methodology is fully consistent with these 4 economy‘s average wage during the entire conventions. The ILO conventions covering areas period of his employment. related to the employing workers indicators do not  Has a pay period that is the most common for include the ILO core labor standards—8 conventions workers in the economy. covering the right to collective bargaining, the  Is a lawful citizen who belongs to the same elimination of forced labor, the abolition of child labor race and religion as the majority of the and equitable treatment in employment practices. economy‘s population.  Resides in the economy‘s largest business city. Between 2009 and 2011 the World Bank Group worked  Is not a member of a labor union, unless with a consultative group—including labor lawyers, membership is mandatory. employer and employee representatives, and experts from the ILO, the Organisation for Economic Co- The business: operation and Development, civil society and the private sector—to review the employing workers  Is a limited liability company. methodology and explore future areas of research.  Operates in the economy‘s largest business city. A full report with the conclusions of the consultative  Is 100% domestically owned. group is available at http://www.doingbusiness.org/  Operates in the manufacturing sector. methodology/employing-workers.  Has 60 employees.  Is subject to collective bargaining agreements Doing Business 2013 does not present rankings of in economies where such agreements cover economies on the employing workers indicators or more than half the manufacturing sector and include the topic in the aggregate ranking on the ease apply even to firms not party to them. of doing business. The report does present the data on  Abides by every law and regulation but does the employing workers indicators in an annex. Detailed not grant workers more benefits than data collected on labor regulations are available on the mandated by law, regulation or (if applicable) Doing Business website (http://www.doing business.org). collective bargaining agreement. Doing Business 2013 Trinidad and Tobago 104 EMPLOYING WORKERS What do some of the data show? One of the employing workers indicators is the worker in his or her first job. Doing Business data show difficulty of hiring index. This measure assesses, among the trend in the minimum wage applied by Trinidad other things, the minimum wage for a 19-year-old and Tobago (figure 12.1). Figure 12.1 Has the minimum wage for a 19-year-old worker or an apprentice increased over time? Minimum wage (US$ per month) Note: A horizontal line along the x-axis of the figure indicates that the economy has no minimum wage. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 105 EMPLOYING WORKERS Employment laws are needed to protect workers from past 4 years did so in ways that increased labor market arbitrary or unfair treatment and to ensure efficient flexibility. What changes did Trinidad and Tobago contracting between employers and workers. Many adopt that affected the Doing Business indicators on economies that changed their labor regulations in the employing workers (table 12.1)? Table 12.1 What changes did Trinidad and Tobago make in employing workers in 2012? Reform No reform as measured by Doing Business. Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 106 EMPLOYING WORKERS What are the details? The data on employing workers reported here for lawyers and public officials. Employment laws and Trinidad and Tobago are based on a detailed survey of regulations as well as secondary sources are reviewed employment regulations that is completed by local to ensure accuracy. Rigidity of employment index The rigidity of employment index measures 3 areas of labor regulation: difficulty of hiring, rigidity of hours and difficulty of redundancy. Difficulty of hiring index The difficulty of hiring index measures whether fixed- worker. (The average value added per worker is the term contracts are prohibited for permanent tasks; the ratio of an economy‘s gross national income per capita maximum cumulative duration of fixed-term contracts; to the working-age population as a percentage of the and the ratio of the minimum wage for a trainee or total population.) first-time employee to the average value added per Difficulty of hiring index Data Fixed-term contracts prohibited for permanent tasks? No No limit by law. Generally fixed term Maximum length of a single fixed-term contract (months) contract can be from one month (even less) to as much as five years. Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage for a 19-year old worker or an apprentice (US$/month) 0.0 Ratio of minimum wage to value added per worker 0.00 Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 107 EMPLOYING WORKERS Rigidity of hours index The rigidity of hours index has 5 components: whether respond to a seasonal increase in production; and there are restrictions on night work; whether there are whether the average paid annual leave for a worker restrictions on weekly holiday work; whether the with 1 year of tenure, a worker with 5 years and a workweek can consist of 5.5 days or is more than 6 worker with 10 years is more than 26 working days or days; whether the workweek can extend to 50 hours or fewer than 15 working days. more (including overtime) for 2 months a year to Rigidity of hours index Data 8 hours (Normal work day is defined Standard workday in manufacturing (hours) as eight hours exclusive of meals and rest breaks.) 50-hour workweek allowed for 2 months a year in case of a seasonal Yes increase in production? Maximum working days per week 6.0 Premium for night work (% of hourly pay) in case of continuous 0% operations Premium for work on weekly rest day (% of hourly pay) in case of 100% continuous operations Major restrictions on night work in case of continuous operations? No Major restrictions on weekly holiday in case of continuous operations? No Paid annual leave for a worker with 1 year of tenure (in working days) 10.0 Paid annual leave for a worker with 5 years of tenure (in working days) 10.0 Paid annual leave for a worker with 10 years of tenure (in working days) 10.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in 10.0 working days) Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 108 EMPLOYING WORKERS Difficulty of redundancy index The difficulty of redundancy index has 8 components: worker; whether the employer needs approval from a whether redundancy is disallowed as a basis for third party to terminate a group of 9 redundant terminating workers; whether the employer needs to workers; whether the law requires the employer to notify a third party (such as a government agency) to reassign or retrain a worker before making the worker terminate 1 redundant worker; whether the employer redundant; whether priority rules apply for needs to notify a third party to terminate a group of 9 redundancies; and whether priority rules apply for redundant workers; whether the employer needs reemployment. approval from a third party to terminate 1 redundant Difficulty of redundancy index Data Dismissal due to redundancy allowed by law? Yes Third-party notification if 1 worker is dismissed? No Third-party approval if 1 worker is dismissed? No Third-party notification if 9 workers are dismissed? Yes Third-party approval if 9 workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? No Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 109 EMPLOYING WORKERS Redundancy cost The redundancy cost indicator measures the cost of notice requirements and severance payments advance notice requirements, severance payments and applicable to a worker with 1 year of tenure, a worker penalties due when terminating a redundant worker, with 5 years and a worker with 10 years is used to expressed in weeks of salary. The average value of assign the score. Redundancy cost indicator Data Notice period for redundancy dismissal (for a worker with 1 year of tenure, in salary 6.4 weeks) Notice period for redundancy dismissal (for a worker with 5 years of tenure, in 6.4 salary weeks) Notice period for redundancy dismissal (for a worker with 10 years of tenure, in 6.4 salary weeks) Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years 6.4 of tenure, in salary weeks) Severance pay for redundancy dismissal (for a worker with 1 year of tenure, in 2.2 salary weeks) Severance pay for redundancy dismissal (for a worker with 5 years of tenure, in 11.9 salary weeks) Severance pay for redundancy dismissal (for a worker with 10 years of tenure, in 28.2 salary weeks) Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years 14.1 of tenure, in salary weeks) Source: Doing Business database. Doing Business 2013 Trinidad and Tobago 110 DATA NOTES The indicators presented and analyzed in Doing Business measure business regulation and the ECONOMY CHARACTERISTICS protection of property rights—and their effect on businesses, especially small and medium-size domestic firms. First, the indicators document the complexity of Gross national income per capita regulation, such as the number of procedures to start a business or to register and transfer commercial Doing Business 2013 reports 2011 income per capita property. Second, they gauge the time and cost of as published in the World Bank‘s World Development achieving a regulatory goal or complying with Indicators 2012. Income is calculated using the Atlas method (current US$). For cost indicators expressed regulation, such as the time and cost to enforce a as a percentage of income per capita, 2011 gross contract, go through bankruptcy or trade across national income (GNI) in U.S. dollars is used as the borders. Third, they measure the extent of legal denominator. GNI data were not available from the protections of property, for example, the protections World Bank for Afghanistan; Australia; The Bahamas; of investors against looting by company directors or Bahrain; Barbados; Brunei Darussalam; Cyprus; the range of assets that can be used as collateral Djibouti; Guyana; the Islamic Republic of Iran; according to secured transactions laws. Fourth, a set of Kuwait; Malta; New Zealand; Oman; Puerto Rico indicators documents the tax burden on businesses. (territory of the United States); Sudan; Suriname; the Finally, a set of data covers different aspects of Syrian Arab Republic; Timor-Leste; West Bank and employment regulation. Gaza; and the Republic of Yemen. In these cases GDP or GNP per capita data and growth rates from The data for all sets of indicators in Doing Business the International Monetary Fund‘s World Economic 2 2013 are for June 2012. Outlook database and the Economist Intelligence Unit were used. Region and income group Methodology Doing Business uses the World Bank regional and The Doing Business data are collected in a income group classifications, available at standardized way. To start, the Doing Business team, http://data.worldbank.org/about/country- with academic advisers, designs a questionnaire. The classifications. The World Bank does not assign questionnaire uses a simple business case to ensure regional classifications to high-income economies. comparability across economies and over time —with For the purpose of the Doing Business report, high- assumptions about the legal form of the business, its income OECD economies are assigned the ―regional‖ size, its location and the nature of its operations. classification OECD high income. Figures and tables Questionnaires are administered through more than presenting regional averages include economies 9,600 local experts, including lawyers, business from all income groups (low, lower middle, upper consultants, accountants, freight forwarders, middle and high income). government officials and other professionals routinely Population administering or advising on legal and regulatory Doing Business 2013 reports midyear 2011 requirements. These experts have several rounds of population statistics as published in World interaction with the Doing Business team, involving Development Indicators 2012. conference calls, written correspondence and visits by the team. For Doing Business 2013 team members visited 24 economies to verify data and recruit The Doing Business methodology offers several respondents. The data from questionnaires are advantages. It is transparent, using factual information subjected to numerous rounds of verification, leading about what laws and regulations say and allowing to revisions or expansions of the information collected. multiple interactions with local respondents to clarify potential misinterpretations of questions. Having 2 The data for paying taxes refer to January – December 2011. Doing Business 2013 Trinidad and Tobago 111 representative samples of respondents is not an issue; 2013 would differ from the recollection of Doing Business is not a statistical survey, and the texts entrepreneurs reported in the World Bank Enterprise of the relevant laws and regulations are collected and Surveys or other perception surveys. answers checked for accuracy. The methodology is inexpensive and easily replicable, so data can be collected in a large sample of economies. Because Subnational Doing Business indicators standard assumptions are used in the data collection, This year Doing Business completed subnational comparisons and benchmarks are valid across studies for Indonesia, Kenya, Mexico, the Russian economies. Finally, the data not only highlight the Federation and the United Arab Emirates. Each of extent of specific regulatory obstacles to business but these countries had already asked to have subnational also identify their source and point to what might be data in the past, and this year Doing Business updated reformed. the indicators, measured improvements over time and Information on the methodology for each Doing expanded geographic coverage to additional cities or Business topic can be found on the Doing Business added additional indicators. Doing Business also website at http://www.doingbusiness.org/methodology/. published regional studies for the Arab world, the East African Community and member states of the Organization for the Harmonization of Business Law in Limits to what is measured Africa (OHADA). The Doing Business methodology has 5 limitations that The subnational studies point to differences in should be considered when interpreting the data. First, business regulation and its implementation —as well as the collected data refer to businesses in the economy‘s in the pace of regulatory reform—across cities in the largest business city (which in some economies differs same economy. For several economies subnational from the capital) and may not be representative of studies are now periodically updated to measure regulation in other parts of the economy. To address change over time or to expand geographic coverage this limitation, subnational Doing Business indicators to additional cities. This year that is the case for all the were created (see the section on subnational Doing subnational studies published. Business indicators). Second, the data often focus on a specific business form—generally a limited liability company (or its legal equivalent) of a specified size — Changes in what is measured and may not be representative of the regulation on The ranking methodology for paying taxes was other businesses, for example, sole proprietorships. updated this year. The threshold for the total tax rate Third, transactions described in a standardized case introduced last year for the purpose of calculating the scenario refer to a specific set of issues and may not ranking on the ease of paying taxes was updated. All represent the full set of issues a business encounters. economies with a total tax rate below the threshold Fourth, the measures of time involve an element of (which is calculated and adjusted on a yearly basis) judgment by the expert respondents. When sources receive the same ranking on the total tax rate indicate different estimates, the time indicators indicator. The threshold is not based on any economic reported in Doing Business represent the median theory of an ―optimal tax rate‖ that minimizes values of several responses given under the distortions or maximizes efficiency in the tax system of assumptions of the standardized case. an economy overall. Instead, it is mainly empirical in Finally, the methodology assumes that a business has nature, set at the lower end of the distribution of tax full information on what is required and does not rates levied on medium-size enterprises in the waste time when completing procedures. In practice, manufacturing sector as observed through the paying completing a procedure may take longer if the taxes indicators. This reduces the bias in the indicators business lacks information or is unable to follow up toward economies that do not need to levy significant promptly. Alternatively, the business may choose to taxes on companies like the Doing Business disregard some burdensome procedures. For both standardized case study company because they raise reasons the time delays reported in Doing Business public revenue in other ways—for example, through Doing Business 2013 Trinidad and Tobago 112 taxes on foreign companies, through taxes on sectors investors, paying taxes, trading across borders, other than manufacturing or from natural resources enforcing contracts, and resolving insolvency. The (all of which are outside the scope of the employing workers indicators are not included in this methodology). Giving the same ranking to all year‘s aggregate ease of doing business ranking. In economies whose total tax rate is below the threshold addition to this year‘s ranking, Doing Business presents avoids awarding economies in the scoring for having a comparable ranking for the previous year, adjusted an unusually low total tax rate, often for reasons for any changes in methodology as well as additions of 3 unrelated to government policies toward enterprises. economies or topics. For example, economies that are very small or that are Construction of the ease of doing business index rich in natural resources do not need to levy broad- based taxes. Here is one example of how the ease of doing business index is constructed. In Finland it takes 3 procedures, 14 days and 4% of annual income per capita in fees to Data challenges and revisions register a property. On these 3 indicators Finland ranks in the 6th, 16th and 39th percentiles. So on average Most laws and regulations underlying the Doing Finland ranks in the 20th percentile on the ease of Business data are available on the Doing Business registering property. It ranks in the 30th percentile on website at http://www.doingbusiness.org. All the th starting a business, 28 percentile on getting credit, sample questionnaires and the details underlying the 24th percentile on paying taxes, 13th percentile on indicators are also published on the website. Questions enforcing contracts, 5th percentile on trading across on the methodology and challenges to data can be borders and so on. Higher rankings indicate simpler submitted through the website‘s ―Ask a Question‖ regulation and stronger protection of property rights. function at http://www.doingbusiness.org. The simple average of Finland‘s percentile rankings on all topics is 21st. When all economies are ordered by Ease of doing business and distance to their average percentile rankings, Finland stands at 11 frontier in the aggregate ranking on the ease of doing business. Doing Business 2013 presents results for 2 aggregate measures: the aggregate ranking on the ease of doing More complex aggregation methods—such as business and the distance to frontier measure. The principal components and unobserved components— ease of doing business ranking compares economies yield a ranking nearly identical to the simple average 4 with one another, while the distance to frontier used by Doing Business. Thus, Doing Business uses measure benchmarks economies to the frontier in the simplest method: weighting all topics equally and, regulatory practice, measuring the absolute distance to the best performance on each indicator. Both measures can be used for comparisons over time. 3 In case of revisions to the methodology or corrections to the underlying data, the data are back-calculated to provide a When compared across years, the distance to frontier comparable time series since the year the relevant economy or topic measure shows how much the regulatory environment was first included in the data set. The time series is available on the for local entrepreneurs in each economy has changed Doing Business website (http://www.doingbusiness.org). Six topics over time in absolute terms, while the ease of doing and more than 50 economies have been added since the inception business ranking can show only relative change. of the project. Earlier rankings on the ease of doing business are therefore not comparable. Ease of doing business 4 See Simeon Djankov, Darshini Manraj, Caralee McLiesh and Rita Ramalho, ―Doing Business Indicators: Why Aggregate, and How to The ease of doing business index ranks economies Do It‖ (World Bank, Washington, DC, 2005). Principal components from 1 to 185. For each economy the ranking is and unobserved components methods yield a ranking nearly calculated as the simple average of the percentile identical to that from the simple average method because both rankings on each of the 10 topics included in the index these methods assign roughly equal weights to the topics, since the pairwise correlations among indicators do not differ much. An in Doing Business 2013: starting a business, dealing alternative to the simple average method is to give different weights with construction permits, getting electricity, to the topics, depending on which are considered of more or less registering property, getting credit, protecting importance in the context of a specific economy. Doing Business 2013 Trinidad and Tobago 113 within each topic, giving equal weight to each of the ability of different government agencies to deliver 5 topic components. tangible results in their area of responsibility. If an economy has no laws or regulations covering a Economies that improved the most across 3 or more specific area—for example, insolvency—it receives a Doing Business topics in 2011/12 ―no practice‖ mark. Similarly, an economy receives a Doing Business 2013 uses a simple method to calculate ―no practice‖ or ―not possible‖ mark if regulation exists which economies improved the most in the ease of but is never used in practice or if a competing doing business. First, it selects the economies that in regulation prohibits such practice. Either way, a ―no 2011/12 implemented regulatory reforms making it practice‖ mark puts the economy at the bottom of the easier to do business in 3 or more of the 10 topics ranking on the relevant indicator. 6 included in this year‘s ease of doing business ranking. The ease of doing business index is limited in scope. It Twenty-three economies meet this criterion: Benin, does not account for an economy‘s proximity to large Burundi, Costa Rica, the Czech Republic, Georgia, markets, the quality of its infrastructure services (other Greece, Guinea, Kazakhstan, Korea, the Lao People‘s than services related to trading across borders and Democratic Republic, Liberia, Mongolia, the getting electricity), the strength of its financial system, Netherlands, Panama, Poland, Portugal, Serbia, the the security of property from theft and looting, Slovak Republic, Slovenia, Sri Lanka, Ukraine, the macroeconomic conditions or the strength of United Arab Emirates and Uzbekistan. Second, Doing underlying institutions. Business ranks these economies on the increase in their ranking on the ease of doing business from the Variability of economies‘ rankings across topics previous year using comparable rankings. Each indicator set measures a different aspect of the Selecting the economies that implemented regulatory business regulatory environment. The rankings of an reforms in at least 3 topics and improved the most in economy can vary, sometimes significantly, across the aggregate ranking is intended to highlight indicator sets. The average correlation coefficient economies with ongoing, broad-based reform between the 10 indicator sets included in the programs. aggregate ranking is 0.37, and the coefficients between any 2 sets of indicators range from 0.19 Distance to frontier measure (between dealing with construction permits and A drawback of the ease of doing business ranking is getting credit) to 0.60 (between starting a business that it can measure the regulatory performance of and protecting investors). These correlations suggest economies only relative to the performance of others. that economies rarely score universally well or It does not provide information on how the absolute universally badly on the indicators. quality of the regulatory environment is improving Consider the example of Canada. It stands at 17 in the over time. Nor does it provide information on how aggregate ranking on the ease of doing business. Its large the gaps are between economies at a single ranking is 3 on starting a business, and 4 on both point in time. resolving insolvency and protecting investors. But its The distance to frontier measure is designed to ranking is only 62 on enforcing contracts, 69 on address both shortcomings, complementing the ease dealing with construction permits and 152 on getting of doing business ranking. This measure illustrates the electricity. distance of an economy to the ―frontier,‖ and the Variation in performance across the indicator sets is change in the measure over time shows the extent to not at all unusual. It reflects differences in the degree which the economy has closed this gap. The frontier is of priority that government authorities give to a score derived from the most efficient practice or particular areas of business regulation reform and the highest score achieved on each of the component indicators in 9 Doing Business indicator sets (excluding 5 6 A technical note on the different aggregation and weighting Doing Business reforms making it more difficult to do business are methods is available on the Doing Business website subtracted from the total number of those making it easier to do (http://www.doingbusiness.org). business. Doing Business 2013 Trinidad and Tobago 114 the employing workers and getting electricity The maximum (max) and minimum (min) observed indicators) by any economy since 2005. In starting a values are computed for the 174 economies included business, for example, New Zealand has achieved the in the Doing Business sample since 2005 and for all highest performance on the time (1 day), Canada and years (from 2005 to 2012). The year 2005 was chosen New Zealand on the number of procedures required as the baseline for the economy sample because it was (1), Slovenia on the cost (0% of income per capita) and the first year in which data were available for the Australia and 90 other economies on the paid-in majority of economies (a total of 174) and for all 9 minimum capital requirement (0% of income per indicator sets included in the measure. To mitigate the capita). Calculating the distance to frontier for each effects of extreme outliers in the distributions of the economy involves 2 main steps. First, individual rescaled data (very few economies need 694 days to indicator scores are normalized to a common unit: complete the procedures to start a business, but many th except for the total tax rate. To do so, each of the 28 need 9 days), the maximum (max) is defined as the 95 component indicators y is rescaled to (max − y)/(max percentile of the pooled data for all economies and all − min), with the minimum value (min) representing the years for each indicator. The exceptions are the getting frontier—the highest performance on that indicator credit, protecting investors and resolving insolvency across all economies since 2005. For the total tax rate, indicators, whose construction precludes outliers. consistent with the calculation of the rankings, the Take Ghana, which has a score of 67 on the distance to frontier is defined as the total tax rate corresponding th frontier measure for 2012. This score indicates that the to the 15 percentile based on the overall distribution economy is 33 percentage points away from the of total tax rates for all years. Second, for each frontier constructed from the best performances economy the scores obtained for individual indicators across all economies and all years. Ghana was further are aggregated through simple averaging into one from the frontier in 2005, with a score of 54. The distance to frontier score. An economy‘s distance to difference between the scores shows an improvement frontier is indicated on a scale from 0 to 100, where 0 over time. represents the lowest performance and 100 the frontier. The distance to frontier measure can also be used for comparisons across economies in the same year, The difference between an economy‘s distance to complementing the ease of doing business ranking. frontier score in 2005 and its score in 2012 illustrates For example, Ghana stands at 64 this year in the ease the extent to which the economy has closed the gap to of doing business ranking, while Peru, which is 29 the frontier over time. And in any given year the score percentage points from the frontier, stands at 43. measures how far an economy is from the highest performance at that time. Doing Business 2013 Trinidad and Tobago 115 RESOURCES ON THE DOING BUSINESS WEBSITE Current features Doing Business reforms News on the Doing Business project Short summaries of DB2013 business regulation http://www.doingbusiness.org reforms, lists of reforms since DB2008 and a ranking simulation tool Rankings http://www.doingbusiness.org/reforms/ How economies rank—from 1 to 185 http://www.doingbusiness.org/rankings/ Historical data Customized data sets since DB2004 Data http://www.doingbusiness.org/custom-query/ All the data for 185 economies—topic rankings, indicator values, lists of regulatory procedures and Law library details underlying indicators Online collection of business laws and regulations http://www.doingbusiness.org/data/ relating to business and gender issues http://www.doingbusiness.org/law-library/ Reports http://wbl.worldbank.org/ Access to Doing Business reports as well as subnational and regional reports, reform case Contributors studies and customized economy and regional More than 9,600 specialists in 185 economies who profiles participate in Doing Business http://www.doingbusiness.org/reports/ http://www.doingbusiness.org/contributors/doing- business/ Methodology The methodologies and research papers NEW! Entrepreneurship data underlying Doing Business Data on business density for 130 economies http://www.doingbusiness.org/methodology/ http://www.doingbusiness.org/data/exploretopics/e ntrepreneurship Research Abstracts of papers on Doing Business topics and More to come related policy issues Coming soon—information on good practices and http://www.doingbusiness.org/research/ data on transparency and on the distance to frontier Doing Business 2013 Trinidad and Tobago 116