Doing Business 2018 Costa Rica Economy Pro le of Costa Rica Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Costa Rica in employment regulation and aspects of job quality Flexibility About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Latin America & DB 2018 Rank Region 190 1 Caribbean Costa Rica Income Category Upper middle income 61 DB 2018 Distance to Frontier (DTF) Population 4,857,274 0 100 GNI Per Capita (US$) 10,840 69.13 City Covered San José DB 2018 Distance to Frontier (DTF) 0 100 69.41: Colombia (Rank: 59) 69.13: Costa Rica (Rank: 61) 66.42: El Salvador (Rank: 73) 61.18: Guatemala (Rank: 97) 58.66: Regional Average (Latin America & Caribbean) Page 3   aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Costa Rica Ease of Doing Business in Latin America & DB 2018 Rank Region 190 1 Caribbean Costa Rica Income Category Upper middle income 61 DB 2018 Distance to Frontier (DTF) Population 4,857,274 0 100 GNI Per Capita (US$) 10,840 69.13 City Covered San José DB 2018 Distance to Frontier (DTF) 0 100 69.41: Colombia (Rank: 59) 69.13: Costa Rica (Rank: 61) 66.42: El Salvador (Rank: 73) 61.18: Guatemala (Rank: 97) 58.66: Regional Average (Latin America & Caribbean) 58.46: Honduras (Rank: 115) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Costa Rica 1 12 21 28 49 60 55 70 73 82 Rank 109 119 127 129 131 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Costa Rica 100 88.21 85.00 81.65 79.32 77.46 80 74.36 71.02 60 DTF 51.48 48.33 40 34.42 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.04 Change:+0.97 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:+1.05 Change:+0.08 Permits Change:+10.00 Change:0.00 Change:+0.09 Starting a Business Page 4   a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.04 Change:+0.97 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:+1.05 Change:+0.08 Permits Change:+10.00 Change:0.00 Doing Business 2018 Costa Rica Change:+0.09 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Costa Rica Standardized Company Legal form Sociedad Anónima (S.A.) - Corporation Paid-in minimum capital requirement CRC 0 City Covered San José Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Procedure – Men (number) 9 8.4 4.9 1.00 (New Zealand) Time – Men (days) 22.5 31.7 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 8.5 37.5 3.1 0.00 (United Kingdom) Procedure – Women (number) 9 8.5 4.9 1.00 (New Zealand) Time – Women (days) 22.5 31.8 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 8.5 37.5 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 2.1 8.7 0.00 (113 Economies) Figure – Starting a Business in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.32: Colombia (Rank: 96) 81.65: Costa Rica (Rank: 127) 79.30: Guatemala (Rank: 139) 78.88: El Salvador (Rank: 140) 78.09: Regional Average (Latin America & Caribbean) 76.98: Honduras (Rank: 150) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Costa Rica – Procedure, Time and Cost Time Cost 5 20 4 ost (% of income per capita) 15 Time (days) 3 10 2 Page 6   5 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Costa Rica Figure – Starting a Business in Costa Rica – Procedure, Time and Cost Time Cost 5 20 4 Cost (% of income per capita) 15 Time (days) 3 10 2 5 1 0 0 1 2 3 4 5 *6 *7 8 9 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Costa Rica – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Check the availability of the proposed company name Less than one day no charge Agency : National Registry ( Registro de Personas Jurídicas) (online procedure) In order to register a company one must rst verify the availability of the company name. The company name can be veri ed online (https://www.rnpdigital.com) free of cost. Companies can also be registered by number, in which case the name would not have to be veri ed. 2 A notary public drafts and notarizes public deeds of the incorporation Less than one day CRC 165,000 charter for registration before the Public Registry online (online procedure) Agency : Public Notary The founding shareholders, as well as the members of the Board of Directors, must sign the public deed of incorporation drafted and authorized by the notary public, who will then submit it for registration to the National Registry. A minimum of two founding shareholders is required, as well as designation of a President, Secretary, Treasurer and Comptroller. The same person cannot occupy two di erent positions. According to the fee structure established by Executive Order No. 39078-JP e ective on August 13, 2015, though the notary public can negotiate fees, the fee for notarizing the articles of association is CRC 165,000 for any corporation. 3 Deposit capital in the bank account, pay registration fees and stamp 1 day see comments duties Agency : National Banking System As a prerequisite for registering the company, 25% of the capital stock indicated in the incorporation charter (if paid in cash) must be deposited in a Page 7   national bank. The amount deposited may be withdrawn once the company (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Costa Rica Details – Starting a Business in Costa Rica – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Check the availability of the proposed company name Less than one day no charge Agency : National Registry ( Registro de Personas Jurídicas) (online procedure) In order to register a company one must rst verify the availability of the company name. The company name can be veri ed online (https://www.rnpdigital.com) free of cost. Companies can also be registered by number, in which case the name would not have to be veri ed. 2 A notary public drafts and notarizes public deeds of the incorporation Less than one day CRC 165,000 charter for registration before the Public Registry online (online procedure) Agency : Public Notary The founding shareholders, as well as the members of the Board of Directors, must sign the public deed of incorporation drafted and authorized by the notary public, who will then submit it for registration to the National Registry. A minimum of two founding shareholders is required, as well as designation of a President, Secretary, Treasurer and Comptroller. The same person cannot occupy two di erent positions. According to the fee structure established by Executive Order No. 39078-JP e ective on August 13, 2015, though the notary public can negotiate fees, the fee for notarizing the articles of association is CRC 165,000 for any corporation. 3 Deposit capital in the bank account, pay registration fees and stamp 1 day see comments duties Agency : National Banking System As a prerequisite for registering the company, 25% of the capital stock indicated in the incorporation charter (if paid in cash) must be deposited in a national bank. The amount deposited may be withdrawn once the company has been duly recorded. If founders chose to sign a promissory note, there is no enforceable obligation to deposit capital in a bank account later. In fact, the business is not even required to operate a bank account at any point during its existence. If the company was incorporated on January 1st, 2017, the registration fees, which include the notary public fees, are CRC 268,739.03, which is broken down as follows: Stamp fees: National Archive (Archivo Nacional) CRC 20 Coleg Contad. Priv (Libros legales) CRC 75 Colegio de Abogados CRC 15,000 Educación y Cultura CRC 750 Fiscal CRC 625 Municipal Fees CRC 0.2% of capital National Registry CRC 42,620.00 Legal Books CRC 17,150.00 Agrary Stamp (Agrario) CRC 82,500 4 Register the incorporation charter in the National Registry and obtain 2 days CRC 8,000 (digital authorization to legalize the company books; send the notice of registration fees) + constitution of the company (edicto) CRC 6,580 Agency : National Registry ( Registro de Personas Jurídicas) (publication fees) One must register the incorporation charter at the National Registry, obtain Page 8   Legal Books CRC 17,150.00 Doing Agrary Stamp Business (Agrario) 2018 CRC 82,500 Costa Rica 4 Register the incorporation charter in the National Registry and obtain 2 days CRC 8,000 (digital authorization to legalize the company books; send the notice of registration fees) + constitution of the company (edicto) CRC 6,580 Agency : National Registry ( Registro de Personas Jurídicas) (publication fees) One must register the incorporation charter at the National Registry, obtain authorization to legalize the company books and send a notice of constitution of the company. This can be done online since February 2012, when Costa Rica launched Crear Empresa. This online platform for business registration allows all incorporation documents to be submitted electronically. 5 File Form D-140 with the before the Tax Department to register the rm Less than one day see comment as a taxpayer (online procedure) Agency : Tax Department (Registro Unico de Contribuyentes, Dirección General de Tributación Directa) Costa Rican citizens or corporations with a Costa Rican legal representative can register electronically as taxpayer (https://www.haciendadigital.go.cr/inscriptipopersona.jsp) 6 Register for labor risk insurance with the National Insurance Institute 1 day no charge (Instituto Nacional de Seguros) (simultaneous with Agency : National Insurance Institute (Instituto Nacional de Seguros) previous procedure) The National Insurance Institute is the only insurance at the moment that only o ers labor insurance. The annual premium for this type of insurance is about 2.17% of reported payroll. 7 Register the company as an employer with Caja Costarricense de Seguro 1 day no charge Social (CCSS, Social Security Institute) (simultaneous with Agency : Social Security Institute (Caja Costarricense de Seguro Social) previous procedure) After submitting the documents required, the CCSS issues a registration form (inscripción ante CCSS de persona jurídica) that allows the company to start operations. Within 15 days after registration with the CCSS, the company will receive an ex-post inspection from an o cer, which consists on a simple veri cation of the information provided by the company about the business activity and the employees. 8 Apply for sanitary permit 1 day USD 30 Agency : Health Department (Ministerio de Salud) The cost for applying for a sanitary permit depends on the degree of environmental risk of the company and varies from USD 30 to USD 100 (USD 30 for low environmental risk, USD 50 for moderate environmental risk, USD 100 for high environmental risk). 9 Apply for the business license (patente municipal) from the municipality 15 days Cost varies between Agency : Local municipality CRC 10,000 and CRC 100,000 depending All new businesses must apply for the business license (patente municipal) on the type of from the municipality. activity, number of employees, location. Applies to women only. Takes place simultaneously with previous procedure. Page 9   Dealing with Construction Permits Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Costa Rica Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 10   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Costa Rica Standardized Warehouse Estimated value of warehouse CRC 305,419,810.20 City Covered San José Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Procedures (number) 17 15.7 12.5 7.00 (Denmark) Time (days) 135 191.8 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 2.0 3.2 1.6 0.10 (5 Economies) Building quality control index (0-15) 11.0 8.8 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 71.02: Costa Rica (Rank: 70) 68.71: Colombia (Rank: 81) 65.44: Honduras (Rank: 113) 64.63: Guatemala (Rank: 116) 63.59: Regional Average (Latin America & Caribbean) 60.16: El Salvador (Rank: 139) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Costa Rica – Procedure, Time and Cost Time Cost 1.2 120 1 Cost (% of warehouse value) 100 0.8 Time (days) 80 0.6 60 0.4 40 20 0.2 0 0 1 2 *3 *4 *5 6 *7 8 9 10 11 * 12 13 14 * 15 * 16 * 17 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 11   component indicators. Doing Business 2018 Costa Rica Figure – Dealing with Construction Permits in Costa Rica – Procedure, Time and Cost Time Cost 1.2 120 1 Cost (% of warehouse value) 100 0.8 Time (days) 80 0.6 60 0.4 40 20 0.2 0 0 1 2 *3 *4 *5 6 *7 8 9 10 11 * 12 13 14 * 15 * 16 * 17 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Costa Rica and comparator economies – Measure of Quality 11.5 11.0 11.0 11.0 11 10.5 10.0 10.0 Index score 10 9.5 9 8.8 8.5 8 7.5 Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Details – Dealing with Construction Permits in Costa Rica – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain zoning authorization (uso de suelo) from the 10 days no charge Municipal Government Agency : Municipal Government This request can also include a request for property line setbacks to be indicated by the Municipal Government. New land use policies were approved in April 2006. The greater San Jose metropolitan area includes 31 municipalities. The zoning authorization will be valid for 6 months, or up to 12 months. Many municipal authorities, such as the Belen Municipality, do not respect their own land-use regulations when granting the nal construction permit. Page 12   2 Obtain results of geotechnical study / soil test 17 days CRC 628,981 Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Doing Business 2018 Costa Rica Details – Dealing with Construction Permits in Costa Rica – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain zoning authorization (uso de suelo) from the 10 days no charge Municipal Government Agency : Municipal Government This request can also include a request for property line setbacks to be indicated by the Municipal Government. New land use policies were approved in April 2006. The greater San Jose metropolitan area includes 31 municipalities. The zoning authorization will be valid for 6 months, or up to 12 months. Many municipal authorities, such as the Belen Municipality, do not respect their own land-use regulations when granting the nal construction permit. 2 Obtain results of geotechnical study / soil test 17 days CRC 628,981 Agency : Private licensed company A soil study is not a requirement by law. In practice, contractors ask for a soil test to ensure that the foundation of the building is solid. The engineer must understand the suitability of the soil for the proposed construction work. Soil test allows to build a solid foundation and avoid structures to be damaged or collapsed or leaned. The zoning authorization must be obtained prior to requesting a soil test. 3 Obtain topographic results of land plot 11 days CRC 428,982 Agency : Private licensed company A topographic survey of the land plot is obtained prior to developing the architectural plans of the warehouse. 4 Request and obtain approval by the Water Department (Acueductos y 5 days no charge Alcantarillados) Agency : Water Department BuildCo must complete and submit an approval form to the Water Department. In turn, the Department must verify that the construction project site has a water source. 5 Request and obtain workers compensation insurance proof from 1 day no charge National Insurance Institute Agency : National Insurance Institute The National Insurance Institute requires proof that worker compensation insurance has been paid prior to issuing a building permit. This proof is required to start each new project. In the past, developers were allowed a blanket insurance policy that did not require purchase of insurance for every new project. In 2007, the Institute’s policies were revised; it now allows a blanket insurance that the developer adjusts, paying the di erences annually. But the complexity of the process discourages its use. Most construction companies purchase individual insurance on a case-by-case basis for projects instead of globally for annual activities. This system is likely to be changed because of private sector complaints. Insurance premiums are based on the amount of coverage. The cost can range from 4.23% to 5.53% of the coverage amount. The completed form must be presented with copies of the workers’ identi cation cards or (for underage employees) working permits. Page 13   Department. In turn, the Department must verify that the construction Doing project Businesssite has 2018a water source. Costa Rica 5 Request and obtain workers compensation insurance proof from 1 day no charge National Insurance Institute Agency : National Insurance Institute The National Insurance Institute requires proof that worker compensation insurance has been paid prior to issuing a building permit. This proof is required to start each new project. In the past, developers were allowed a blanket insurance policy that did not require purchase of insurance for every new project. In 2007, the Institute’s policies were revised; it now allows a blanket insurance that the developer adjusts, paying the di erences annually. But the complexity of the process discourages its use. Most construction companies purchase individual insurance on a case-by-case basis for projects instead of globally for annual activities. This system is likely to be changed because of private sector complaints. Insurance premiums are based on the amount of coverage. The cost can range from 4.23% to 5.53% of the coverage amount. The completed form must be presented with copies of the workers’ identi cation cards or (for underage employees) working permits. 6 Request and obtain approval from National Environment Technical 60 days CRC 1,000,000 Secretary Agency : National Environment Technical Secretary BuildCo must obtain approval from the National Environment Technical Secretary (Secretaría Técnica Nacional del Ambiente, SETENA), using two forms (in Spanish) available on SETENA’s Web site (www.minae.go.cr /setena.html). BuildCo would use Form D-1 which costs anywhere between CRC 1 million to CRC 1.5 million. The response generally takes 60 -- 90 days. This procedure and the next can be completed simultaneously. Preparation of the environmental impact study (EIS) costs anywhere between CRC 8,000.00 and CRC 12,000.00. But the study is done internally by BuildCo. 7 Request and obtain approval of blue prints by College of Architects and 20 days CRC 810,862 Engineers Agency : College of Architects and Engineers BuildCo should submit the property survey map and a contract, signed by two members of the College of Architects and Engineers: an electrical engineer and either a civil engineer or an architect. It is preferred that at least four blueprint copies be submitted. The college has implemented the new American Power Conversion Corporation (APC) system (via the Internet). If the APC submits the approval, the time line is 1 day; if not, it is about 5 -- 8 days. In 2007, the College encouraged a complete change to digital approval. The approval fee is 0.265% of the project value, plus a xed fee of CRC 1,500.00 for two construction log books. 8 Request and obtain construction permit from Municipal Government 15 days CRC 3,054,198 Agency : Municipal Government According to Law 8220, the relevant authorities must respond to a construction permit request within 30 days. However, on average, it should take 15 days. The construction permit fee is 1% of the project value. 9 Receive on-site inspection - I 1 day no charge Agency : Municipal Government During construction, inspections occur monthly, though not according to a Page 14   speci c schedule. The inspector may show up randomly to view the construction permit request within 30 days. However, on average, it should Doing take 15 days. Business The construction 2018 Costa Ricapermit fee is 1% of the project value. 9 Receive on-site inspection - I 1 day no charge Agency : Municipal Government During construction, inspections occur monthly, though not according to a speci c schedule. The inspector may show up randomly to view the construction and review the construction log book (bitacora de construccion), which the engineer/architect uses to register entries for each stage of construction. Under Costa Rican law, the engineer is responsible for complying with construction laws and regulations. There is no need to request inspections. 10 Receive on-site inspection - II 1 day no charge Agency : Municipal Government 11 Receive on-site inspection - III 1 day no charge Agency : Municipal Government Request water connection 1 day no charge 12 Agency : Water Department After the connection is requested, an inspector from the Water Department visits the construction site, determines the connection requirements, and, on this basis, estimates the costs. Sewage connection is not included. With few centralized sewage connections, most connections are done with an independent septic system or treatment plant. BuildCo must complete an application form and present all the required documents, including a copy of the company's identi cation card. 13 Receive inspection from Water Department and pay connection cost 1 day CRC 79,520 Agency : Water Department 14 Connect to water services 28 days no charge Agency : Water Department Request proof of completed construction (Constancia de Obra 1 day no charge 15 Terminada) from Municipality Agency : Municipal Government BuildCo or the Responsible of Construction works (Responsable de Obra) must provide a certi cate of completed construction to the Municipality . The Inspection Department of the Municipality (Seccion de Inspeccion Municipal) must inspect and issue the certi cate of completed construction stating that the construction has been completed in accordance with what was stated in the permit and with the municipal regulations. The legal basis is the Urban Master Plan published in La Gaceta N. 148 of August 3, 2005 (“Plan Director Urbano del Cantón de San José”). Receive nal inspection from from Municipality 1 day no charge 16 Agency : Municipal Government Obtain proof of completed construction (Constancia de Obra Terminada) 3 days no charge 17 from Municipality Agency : Municipal Government Takes place simultaneously with previous procedure. Page 15   17 from Municipality Agency : Municipal Government Doing Business 2018 Costa Rica Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Costa Rica – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Unscheduled inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, in- house engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 Page 16   building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Takes place simultaneously with previous procedure. Doing Business 2018 Costa Rica Details – Dealing with Construction Permits in Costa Rica – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Unscheduled inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, in- house engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the Page 17   supervision; Liability Doing 2018 regimes and insurance Business Costaindex Rica(0-2) 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company; Owner or investor. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 2.0 What are the quali cation requirements for the professional responsible for verifying University 1.0 that the architectural plans or drawings are in compliance with existing building degree in regulations? (0-2) architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the University 1.0 construction on the ground? (0-2) degree in engineering, construction or construction management; Being a registered architect or engineer. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst Page 18   time. architect or engineer. Doing Business 2018 Costa Rica Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 19   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Costa Rica Standardized Connection Price of electricity (US cents per kWh) 14.6 Name of utility Compania Nacional de Fuerza y Luz City Covered San José Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Procedures (number) 5 5.5 4.7 2 (United Arab Emirates) Time (days) 45 66.0 79.1 10 (United Arab Emirates) Cost (% of income per capita) 168.1 927.4 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 8 4.2 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 88.21: Costa Rica (Rank: 21) 84.02: Guatemala (Rank: 36) 74.18: Colombia (Rank: 81) 71.40: El Salvador (Rank: 88) 70.45: Regional Average (Latin America & Caribbean) 53.61: Honduras (Rank: 144) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Costa Rica – Procedure, Time and Cost Time Cost 45 180 40 160 Cost (% of income per capita) 35 140 30 120 Time (days) 25 100 20 80 15 60 10 40 5 Page 20   20 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Costa Rica Figure – Getting Electricity in Costa Rica – Procedure, Time and Cost Time Cost 45 180 40 160 Cost (% of income per capita) 35 140 30 120 Time (days) 25 100 20 80 15 60 10 40 5 20 0 0 1 *2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Costa Rica and comparator economies – Measure of Quality 9 8 8 7 7 6 6 6 Index score 5 4.2 4 3 2 1 0 0 Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Details – Getting Electricity in Costa Rica – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request engineering study, submit application and await estimate 8 calendar days CRC 35,000 Agency : Compania Nacional de Fuerza y Luz (CNFL) The service is generally requested in person. The customer has to le the following documents with the application form: • the electrical plans, • the cadastre plans • and a copy of the applicant's ID. Depending of the nature of the work, more documents might be required. None of these documents require notary's certi cation. 2 Receive site inspection by CNFL 1 calendar day CRC 0 Page 21   Agency : Compania Nacional de Fuerza y Luz (CNFL) Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Doing Business 2018 Costa Rica Details – Getting Electricity in Costa Rica – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request engineering study, submit application and await estimate 8 calendar days CRC 35,000 Agency : Compania Nacional de Fuerza y Luz (CNFL) The service is generally requested in person. The customer has to le the following documents with the application form: • the electrical plans, • the cadastre plans • and a copy of the applicant's ID. Depending of the nature of the work, more documents might be required. None of these documents require notary's certi cation. 2 Receive site inspection by CNFL 1 calendar day CRC 0 Agency : Compania Nacional de Fuerza y Luz (CNFL) A site inspection is necessary to prepare the technical report. 3 Await preparation of design by CNFL and prearrangements for works 8 calendar days CRC 0 Agency : Compania Nacional de Fuerza y Luz (CNFL) After the inspection the utility will issue a technical report. The client is given the designs and a list of providers authorized by CNFL to do the connection works. The design itself is prepared by CNFL -indicating the works and materials required. Should the installation of a transformers be required the design is prepared by the Section for the Design of Electrical Networks of CNFL. In order to establish whether this is necessary, the Engineering Study is issued; if the connection can be done with underground cables, the work can be designed by an outside electric engineer, who is registered with the Colegio de Ingenieros Electricistas, Mecánicos e Industriales (CFIA). In that case, the designs are presented to CNFL for approval. Until they are approved and the Engineering Study is issued, no works can be done. 4 Hire private company to carry out works in accordance with CNFL's 26 calendar days USD 17,500 plans Agency : Empresa privada The external connection works have to be done by a rm that has been authorized by CNFL to do medium voltage network construction work. There are 21 rms with such authorization in the capital city. Once the supply contract between the client and the authorized provider has been signed, it is led with CNFL. It takes approximately 3 days to start the works and, once supervised, the construction can start. The construction cannot start if no initiation date has been determined by the CNFL. The internal wiring installation can be done by any electrician hired by the client, but it has to be supervised by the engineer responsible for the design of the electric installation. CNFL does not conduct any inspections of the internal wiring. The internal wiring installation requires previous plans approved by an electric engineer authorized by Colegio de Ingenieros Electricistas, Mecánicos e Industriales (CFIA) and the works have to be supervised by the CFIA or by another electric engineer. No certi cate of compliance with NEC rules is emitted nor can it be requested. The plans approved by CFIA will have to be led with the CNFL by the time the meter installation is requested. Three transformers of 50 kVA have to be installed inside the client's private property. The client has to pay for them. They can Page 22   designs are presented to CNFL for approval. Until they are approved and the Doing Engineering Costa no Study is issued, Business 2018 works can be done. Rica 4 Hire private company to carry out works in accordance with CNFL's 26 calendar days USD 17,500 plans Agency : Empresa privada The external connection works have to be done by a rm that has been authorized by CNFL to do medium voltage network construction work. There are 21 rms with such authorization in the capital city. Once the supply contract between the client and the authorized provider has been signed, it is led with CNFL. It takes approximately 3 days to start the works and, once supervised, the construction can start. The construction cannot start if no initiation date has been determined by the CNFL. The internal wiring installation can be done by any electrician hired by the client, but it has to be supervised by the engineer responsible for the design of the electric installation. CNFL does not conduct any inspections of the internal wiring. The internal wiring installation requires previous plans approved by an electric engineer authorized by Colegio de Ingenieros Electricistas, Mecánicos e Industriales (CFIA) and the works have to be supervised by the CFIA or by another electric engineer. No certi cate of compliance with NEC rules is emitted nor can it be requested. The plans approved by CFIA will have to be led with the CNFL by the time the meter installation is requested. Three transformers of 50 kVA have to be installed inside the client's private property. The client has to pay for them. They can be installed in a post inside the private property (it's not allowed to install them in public places) or in a transformers vault. 5 Receive meter installation and nal connection from CNFL 3 calendar days CRC 368,853.06 Agency : Compania Nacional de Fuerza y Luz (CNFL) The client has to request the meter. A donation document for the transformers (transferring ownership to the utility) is prepared and con rmed that no money is owed by the client. The payments that the customer has to make to CNFL have to be done in the Section of Electric Networks Design. The payment receipt has to be shown later in the o ce of Engineering Study to be able to go to this step (the Engineering Study). There is a guarantee deposit that is calculated according to the consumption. It represents one month consumption. The minimum amount of guarantee for the residential customer is ¢ 15.500, and for businesses the minimum amount is ¢ 25.000. This deposit is required for all clients requesting a new service. The deposit is refundable and after ve years it begins to generate interests. It is reimbursed when the client terminates the service. The deposit covers the installation of the meter equipment with its materials. Additionally it covers the operation costs and the service maintenance. Normally CNFL tries to both inspect the works and install the meter at the same time. CNFL charges between 2 and 3% of the cost of the works only for the reception and the powering. The responsible to pay this fee is the client. Therefore, this cost is normally included in the estimation of costs sent to the client. If the service requires power transformers or a speci c meter, they are installed by CNFL without extra costs. The installation of the meter is exclusive responsibility of CNFL. The internal installation planes approved by the Engineers Association and the electrician's certi cation have to be sent to CNFL before the nal powering. Takes place simultaneously with previous procedure. Details – Getting Electricity in Costa Rica – Measure of Quality Page 23   Takes place simultaneously with previous procedure. Doing Business 2018 Costa Rica Details – Getting Electricity in Costa Rica – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.0 System average interruption frequency index (SAIFI) 0.0 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online https://www.cn .go.c r/index.php/tarifas- vigentes- c#disposiciones- generales Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 24   If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Costa Rica Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value CRC 305,419,810.20 City Covered San José Page 25   Latin America & OECD high Doing Business 2018 Costa Rica Standard Property Transfer Property value CRC 305,419,810.20 City Covered San José Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Procedures (number) 5 7.2 4.6 1.00 (4 Economies) Time (days) 11 63.3 22.3 1.00 (3 Economies) Cost (% of property value) 3.4 5.8 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 17.5 12.0 22.7 29.00 (Singapore) Figure – Registering Property in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 74.36: Costa Rica (Rank: 49) 71.34: Colombia (Rank: 60) 67.92: El Salvador (Rank: 69) 64.44: Guatemala (Rank: 85) 63.42: Honduras (Rank: 91) 55.36: Regional Average (Latin America & Caribbean) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Costa Rica – Procedure, Time and Cost Time Cost 3 10 2.5 Cost (% of property value) 8 2 Time (days) 6 1.5 4 1 2 0.5 0 0 1 *2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 26   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Costa Rica Figure – Registering Property in Costa Rica – Procedure, Time and Cost Time Cost 3 10 2.5 Cost (% of property value) 8 2 Time (days) 6 1.5 4 1 2 0.5 0 0 1 *2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Costa Rica and comparator economies – Measure of Quality 20 17.5 18 16.5 16 13.5 14.0 14 13.0 12.0 Index score 12 10 8 6 4 2 0 Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Details – Registering Property in Costa Rica – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a tax clearance certi cate from the Municipality One day CRC 1320 Agency : Municipality of San José (Simultaneous with Procedure 2) The seller shall provide the buyer a certi cate attesting that the property is current with payment of all the Municipal taxes and charges (including property tax, and charges for municipal services). 2 Obtain a literal certi cation from the National Registry and a cadastral Less than a day CRC 2800 (stamps for plan from the Cadastre online (online procedure the ownership Agency : Registro Nacional and simultaneous certificate) + CRC with procedure 1) 2800 (stamps for the Since November 1, 2010, it is possible to obtain property certi cates and certified plan) certi ed cadastral plan images on the same website (www.rnpdigital.com). Page 27   Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Doing Business 2018 Costa Rica Details – Registering Property in Costa Rica – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a tax clearance certi cate from the Municipality One day CRC 1320 Agency : Municipality of San José (Simultaneous with Procedure 2) The seller shall provide the buyer a certi cate attesting that the property is current with payment of all the Municipal taxes and charges (including property tax, and charges for municipal services). 2 Obtain a literal certi cation from the National Registry and a cadastral Less than a day CRC 2800 (stamps for plan from the Cadastre online (online procedure the ownership Agency : Registro Nacional and simultaneous certificate) + CRC with procedure 1) 2800 (stamps for the Since November 1, 2010, it is possible to obtain property certi cates and certified plan) certi ed cadastral plan images on the same website (www.rnpdigital.com). According to Decree Nº 35488-J, all certi cates obtained electronically have the same value as paper-based certi cates. The seller obtains a literal certi cation (printed sheet with the information of the property recorded at the Registry's database) from the National Registry, where it is issued in the same day. Information of property can be obtained online. A notary public or any individual can access with a designated password and get this information by simply login into the National Registry's website (www.rnpdigital.com), putting the property's information and getting a print screen with the above indicated information (nature of property, location, area, cadastre number, owner, liens, mortgages, easements, limitations, boundaries, etc). It is also possible to do searches in computers available at the National Registry. 3 A lawyer/notary drafts the sale agreement as a public deed 2 days Fees according to Agency : Lawyer/Notary the following scale: Property value Fees Notary fees were amended by the Executive Decree No. 39078-JP of 25th of 0 – 11 million CRC 2% May of 2015 (which entered into force in August 2015). A lawyer/notary 11 – 16.5 million CRC prepares the sale agreement in the form of a public deed based on the 1.5% information obtained in step 1 and 2, provided by the parties. In accordance 16.5 – 33 million CRC with the Notary Code, the lawyer/notary is legally obliged to study the property and in case the parties are corporations, study the Articles of 1.25% Incorporation and verify that the person signing the transfer deed has the 33 million CRC and legal authority to represent the company. higher 1% In Costa Rica notary publics are lawyers. Parties must provide photocopies of their ID (“cédula” for Costa Rican citizens or passport for foreigners) Corporations must provide a certi cate of incorporation. 4 Pay transfer tax and the stamp duties at the Banco de Costa Rica Less than a day 1.5% of property Agency : Banco de Costa Rica (online procedure) price (transfer tax) + 0.5% of property Transfer tax and stamp duties must be paid at the Banco de Costa Rica, a price (National state-owned bank that will transfer the money to the tax authorities—either Property Register Page 28   online or in person. In order to pay online, one must have a bank account Stamp) + 0.2% of Doing Corporations Business 2018 CostaaRica must provide certi cate of incorporation. 4 Pay transfer tax and the stamp duties at the Banco de Costa Rica Less than a day 1.5% of property Agency : Banco de Costa Rica (online procedure) price (transfer tax) + 0.5% of property Transfer tax and stamp duties must be paid at the Banco de Costa Rica, a price (National state-owned bank that will transfer the money to the tax authorities—either Property Register online or in person. In order to pay online, one must have a bank account Stamp) + 0.2% of and internet access to the Bank’s secure web page. The notary certi es on property price the a davit that the payment was made and the registrant must check that on the bank’s database. It has become a common practice for up-to-date law (Municipal Stamp) + rms and notaries to pay the transfer tax and stamp duties online. 0.15% of property price (Agrarian The transfer tax and stamp duties are calculated on the basis of the highest Stamp) + 25,000 CRC of the stated purchase price and the property value appearing on the (Costa Rican Bar National Property Registry. Price is updated when the property is sold or Association fee) + mortgaged. CRC 625 (Fiscal Stamp Tax) + CRC 20 For a land transfer there are various types of stamps that must be paid. (National Archive fee) Payment is calculated as follows: • National Property Register Stamp: 0.5% of the property value • Municipal Stamp: 0.2% of property value • Fiscal Stamp Tax: CRC 625 • Agrarian Stamp: 0.15% of property value • Costa Rican Bar Association: 25,000 CRC for deeds between CRC 100 million -500 million (Executive Act No. 36562-JP) • National Archive: CRC 20 5 File the public deed registration at the National Property Registry 7 days Already paid in Agency : Registro Nacional Procedure 4 The lawyer/notary les before the National Property Registry (Registro Nacional) an a davit of the public deed (known as a “testimonio”), with proof of payment of the transfer tax and other applicable stamp taxes. Once led, the a davit of the transfer deed is assigned for review by a Registrar of the National Property. If the document complies with all requirements, it is recorded and the buyer shall be the formal owner of the property thereafter. If the document contains problems it is returned to notary for correction and re- ling. Takes place simultaneously with previous procedure. Details – Registering Property in Costa Rica – Measure of Quality Answer Score Quality of the land administration index (0-30) 17.5 Reliability of infrastructure index (0-8) 5.0 What is the institution in charge of immovable property registration? Registro Nacional In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 Page 29   Takes place simultaneously with previous procedure. Doing Business 2018 Costa Rica Details – Registering Property in Costa Rica – Measure of Quality Answer Score Quality of the land administration index (0-30) 17.5 Reliability of infrastructure index (0-8) 5.0 What is the institution in charge of immovable property registration? Registro Nacional In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Subdirección Catastral del Registro Nacional In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 3.5 Who is able to obtain information on land ownership at the agency in charge of Freely accessible 1.0 immovable property registration in the largest business city? by anyone Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: https://www.rnp digital.com/direc cion_servicios/se rvicios_formulari os.htm Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: https://www.rnp digital.com/direc cion_servicios/se rvicios_formulari os.htm Does the agency in charge of immovable property registration commit to delivering a No 0.0 Page 30   immovable property registration in the largest business city made publicly available– and if Doing so, how? 2018 Business Costa Rica Link for online access: https://www.rnp digital.com/direc cion_servicios/se rvicios_formulari os.htm Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Freely accessible 0.5 by anyone Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, online 0.5 —and if so, how? Link for online access: https://www.rnp digital.com/shop ping/login.jspx Does the cadastral or mapping agency commit to delivering an updated map within a Yes, online 0.5 speci c time frame—and if so, how does it communicate the service standard? Link for online access: https://www.rnp digital.com/direc cion_servicios/se rvicios_formulari os.htm#HERMES _TABS_2_1 https://www.rnp digital.com/shop ping/login.jspx Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Page 31   Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable Doing Businessproperty 2018 registry? Costa Rica Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 5.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary. Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a Juzgado Civil property worth 50 times gross national income (GNI) per capita and located in the largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Between 2 and 3 1.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal Page 32   rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Costa Rica Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Strength of legal rights index (0-12) 10 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.8 6.6 8.00 (34 Economies) Page 33   Credit registry coverage (% of adults) 32.2 14.0 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Costa Rica Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Strength of legal rights index (0-12) 10 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.8 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 32.2 14.0 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 100.0 43.1 63.7 100.00 (23 Economies) Figure – Getting Credit in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 95.00: Colombia (Rank: 2) 85.00: Costa Rica (Rank: 12) 85.00: Honduras (Rank: 12) 80.00: Guatemala (Rank: 20) 80.00: El Salvador (Rank: 20) 50.94: Regional Average (Latin America & Caribbean) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Costa Rica and comparator economies 14 12 12 10 10 9 9 9 Index score 8 6 5.3 4 2 0 Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Details – Legal Rights in Costa Rica Strength of legal rights index (0-12) 10 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Page 34   Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Doing Business 2018 Costa Rica Details – Legal Rights in Costa Rica Strength of legal rights index (0-12) 10 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be Yes performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Costa Rica and comparator economies 10 8 8 7 7 7 7 Index score 6 4.8 4 2 0 Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Details – Credit Information in Costa Rica Page 35   0 Rica Costa2018 Doing Business Colombia Costa Rica El Salvador Guatemala Honduras Latin America & Caribbean Details – Credit Information in Costa Rica Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative credit data distributed? Yes Yes 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes Yes 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes Yes 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial No No 0 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 9,343,728 1,054,491 Number of firms 812,941 23,828 Total 10,156,669 1,078,319 Percentage of adult population 100.0 32.2 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 36   transactions; Available legal remedies (damages, Percentage of adult population 100.0 32.2 Doing Business 2018 Costa Rica Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Extent of conflict of interest regulation index (0- 6 5.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 3.7 4.1 6.4 Page 37   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Costa Rica Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Extent of conflict of interest regulation index (0- 6 5.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 3.7 4.1 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.33: Colombia (Rank: 16) 48.33: Costa Rica (Rank: 119) 47.24: Regional Average (Latin America & Caribbean) 45.00: Honduras (Rank: 129) 38.33: El Salvador (Rank: 160) 31.67: Guatemala (Rank: 172) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Costa Rica and comparator economies – Measure of Quality Costa Rica 3 5 5 4 4 8 Colombia 6 7 9 8 6 8 El Salvador 6 0 3 1 6 7 Guatemala 3 2 3 1 5 5 Honduras 3 8 3 2 5 6 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Latin America & Caribbean 4.1 5.4 4.4 3.4 5.6 6.5 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Costa Rica – Measure of Quality Answer Score Page 38   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Costa Rica Details – Protecting Minority Investors in Costa Rica – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6 Extent of disclosure index (0-10) 5 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Existence of a 1.0 con ict without any speci cs Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 1.0 the transaction only Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 1.0 2) the transaction only Extent of director liability index (0-10) 5 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of 0.0 fraud or bad faith Ease of shareholder suits index (0-10) 8 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Page 39   Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction Doing 2018 (0-1) documents? Business Costa Rica Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without Yes 1.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 3.7 Extent of shareholder rights index (0-10) 4 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of No 0.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? No 0.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a No 0.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new Yes 1.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their Yes 1.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 4 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Page 40   Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Must the board of directors include a separate audit committee exclusively comprising No 0.0 board Doing members? Business 2018 Costa Rica Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 3 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? No 0.0 Must Buyer disclose information about board members’ primary employment and No 0.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? No 0.0 Must Buyer disclose its audit reports to the public? No 0.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Page 41   Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Doing Business 2018 Costa Rica Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Payments (number per year) 10 28.0 10.9 3 (Hong Kong SAR, China) Page 42   return, but within the tax assessment period. Doing Business 2018 Costa Rica Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Payments (number per year) 10 28.0 10.9 3 (Hong Kong SAR, China) Time (hours per year) 151 332.1 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 58.3 46.6 40.1 18.47% (32 Economies) Postfiling index (0-100) 85.06 47.50 83.45 99.38 (Estonia) Figure – Paying Taxes in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 77.46: Costa Rica (Rank: 60) 77.35: El Salvador (Rank: 61) 70.30: Guatemala (Rank: 100) 60.16: Regional Average (Latin America & Caribbean) 59.08: Colombia (Rank: 142) 51.74: Honduras (Rank: 164) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Costa Rica and comparator economies – Measure of Quality 90 85.06 80 70 60 Index score 48.17 49.54 47.50 50 40 33.04 35.14 30 20 10 0 Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Details – Paying Taxes in Costa Rica Total tax and Notes Tax or mandatory Payments Notes on Time Statutory tax contribution rate (% on contribution (number) Payments (hours) rate Tax base of profit) TTR Page 43   Employer paid - Social 1 online 59 26.33% gross 29.70 Doing Business 2018 Costa Rica Figure – Paying Taxes in Costa Rica and comparator economies – Measure of Quality 90 85.06 80 70 60 Index score 48.17 49.54 47.50 50 40 33.04 35.14 30 20 10 0 Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Details – Paying Taxes in Costa Rica Total tax and Notes Tax or mandatory Payments Notes on Time Statutory tax contribution rate (% on contribution (number) Payments (hours) rate Tax base of profit) TTR Employer paid - Social 1 online 59 26.33% gross 29.70 security contributions salaries Corporate income tax 1 online 18 30% taxable 19.17 profit Municipal patent license 1 online 0.3% sales 5.30 Employer paid - Worker's 1 between 1.5% gross 2.98 compensation insurance and up to 4% salaries Property transfer tax 1 1.5% sale price 0.45 Tax on land property 1 online 0.25% registered 0.37 value Tax on interest 1 online 8% interest 0.20 income Highway tax/Vehicle tax 1 various rates 0.11 Stamp duty 1 various rates transaction 0.00 value General sales tax (GST) 1 online 74 13% value 0.00 added Employee paid - Social 0 jointly 9.34% gross 0.00 security contributions salaries Totals 10 151 58.3 Details – Paying Taxes in Costa Rica – Tax by Type Taxes by type Answer Profit tax (% of profit) 19.2 Page 44   Totals 10 151 58.3 Doing Business 2018 Costa Rica Details – Paying Taxes in Costa Rica – Tax by Type Taxes by type Answer Profit tax (% of profit) 19.2 Labor tax and contributions (% of profit) 32.7 Other taxes (% of profit) 6.4 Details – Paying Taxes in Costa Rica – Measure of Quality Answer Score Post ling index (0-100) 85.06 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process None Percentage of cases exposed to a VAT audit (%) 0% - 24% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 5.5 89 Time to obtain a VAT refund (weeks) 27.5 53.09 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 2.5 98.17 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border recent compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The mostPage 45   round of data collection for the project was completed in June 2017. See the methodology for more information. a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Costa Rica Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 46   of agriculture or industry, national security agencies and any other Doing Business 2018 Costa Rica government authorities. Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Time to export: Border compliance (hours) 20 62.5 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 375 526.5 149.9 0.00 (19 Economies) Time to export: Documentary compliance 24 53.3 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 80 110.4 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 80 64.4 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 420 684.0 111.6 0.00 (27 Economies) Time to import: Documentary compliance 26 79.9 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 75 119.5 25.6 0.00 (30 Economies) Figure – Trading across Borders in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 89.29: El Salvador (Rank: 43) 79.32: Costa Rica (Rank: 73) 75.31: Guatemala (Rank: 79) 68.71: Regional Average (Latin America & Caribbean) 65.85: Honduras (Rank: 115) 62.83: Colombia (Rank: 125) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Costa Rica – Time and Cost Time Cost 90 420 450 80 80 375 400 70 350 60 300 Time (hours) Cost (USD) 50 250 40 200 30 24 26 150 20 20 80 75 100 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 47   Doing Business 2018 Costa Rica Figure – Trading across Borders in Costa Rica – Time and Cost Time Cost 90 420 450 80 80 375 400 70 350 60 300 Time (hours) Cost (USD) 50 250 40 200 30 24 26 150 20 20 80 75 100 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Costa Rica Characteristics Export Import Product HS 85 : Electrical machinery and equipment and parts thereof; sound recorders and HS 8708: Parts and reproducers, television image and sound recorders and reproducers, and parts and accessories of motor accessories of such articles vehicles Trade partner United States Japan Border Limón port Limón port Distance (km) 199 199 Domestic 6 6 transport time (hours) Domestic 600 600 transport cost (USD) Details – Trading across Borders in Costa Rica – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 1.8 100.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 20.0 275.0 Import: Clearance and inspections required by customs authorities 72.0 100.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 80.0 320.0 Page 48   Details – Trading across Borders in Costa Rica – Trade Documents (USD) Doing Business 2018 Costa Rica Details – Trading across Borders in Costa Rica – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 1.8 100.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 20.0 275.0 Import: Clearance and inspections required by customs authorities 72.0 100.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 80.0 320.0 Details – Trading across Borders in Costa Rica – Trade Documents Export Import Customs Export Declaration Customs Import Declaration Commercial Invoice Commercial Invoice Packing List Packing List Bill of Lading Bill of Lading Terminal Handling Receipts Terminal Handling Receipts Certificate of Origin SOLAS certificate SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita Page 49   or the Enforcement fees SOLAS certificate Doing Business 2018 Costa Rica Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value CRC 10,999,903.00 Court name San José Civil Court for High Value Claims City Covered San José Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Time (days) 852 767.1 577.8 164.00 (Singapore) Cost (% of claim value) 24.3 31.4 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 7.5 8.4 11.0 15.50 (Australia) Figure – Enforcing Contracts in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 55.20: El Salvador (Rank: 105) 53.13: Regional Average (Latin America & Caribbean) 51.48: Costa Rica (Rank: 129) Page 50   of judicial processes Quality Business Doing index (0-18) 2018 Costa Rica 7.5 8.4 11.0 15.50 (Australia) Figure – Enforcing Contracts in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 55.20: El Salvador (Rank: 105) 53.13: Regional Average (Latin America & Caribbean) 51.48: Costa Rica (Rank: 129) 45.54: Honduras (Rank: 152) 34.55: Guatemala (Rank: 176) 34.29: Colombia (Rank: 177) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Costa Rica – Time and Cost Time Cost 1600 45.8 50 1402 1400 1288 Cost (% of claim value) 35.2 40 1200 31.4 Time (days) 1000 920 852 26.5 30 24.3 786 767.1 800 21.5 19.2 577.8 600 20 400 10 200 0 0 Colombia Costa Rica El Salvador Guatemala Honduras Latin America & OECD high income Caribbean Figure – Enforcing Contracts in Costa Rica and comparator economies – Measure of Quality Costa Rica 2.5 1.5 1 2.5 Colombia 2.5 1.5 1.5 3.5 El Salvador 2.5 2 0.5 2.5 Guatemala 2 0.5 0.5 3 Honduras 2.5 2 0 3 OECD high income 2.5 2.9 2 3.6 Latin America & Caribbean 2.4 2 0.9 3.5 0 2 4 6 8 10 Page 51   12 Colombia Costa Rica El Salvador Guatemala Honduras Latin America & OECD high income Caribbean Doing Business 2018 Costa Rica Figure – Enforcing Contracts in Costa Rica and comparator economies – Measure of Quality Costa Rica 2.5 1.5 1 2.5 Colombia 2.5 1.5 1.5 3.5 El Salvador 2.5 2 0.5 2.5 Guatemala 2 0.5 0.5 3 Honduras 2.5 2 0 3 OECD high income 2.5 2.9 2 3.6 Latin America & Caribbean 2.4 2 0.9 3.5 0 2 4 6 8 10 12 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Costa Rica Indicator Time (days) 852 Filing and service 45 Trial and judgment 547 Enforcement of judgment 260 Cost (% of claim value) 24.3 Attorney fees 20 Court fees 1.4 Enforcement fees 2.9 Quality of judicial processes index (0-18) 7.5 Court structure and proceedings (-1-5) 2.5 Case management (0-6) 1.5 Court automation (0-4) 1.0 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Costa Rica – Measure of Quality Page 52   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 Costa Rica Details – Enforcing Contracts in Costa Rica – Measure of Quality Answer Score Quality of judicial processes index (0-18) 7.5 Court structure and proceedings (-1-5) 2.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.0 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? No 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 1.5 1. Time standards 0.5 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? No 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by lawyers? Court automation (0-4) 1.0 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 53   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Costa Rica 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the Yes general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 54   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Costa Rica Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Recovery rate (cents on the dollar) 29.1 30.8 71.2 93.1 (Norway) Time (years) 3.0 2.9 1.7 0.4 (Ireland) Page 55   Cost (% of estate) 14.5 16.8 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Costa Rica Latin America & OECD high Indicator Costa Rica Caribbean income Overall Best Performer Recovery rate (cents on the dollar) 29.1 30.8 71.2 93.1 (Norway) Time (years) 3.0 2.9 1.7 0.4 (Ireland) Cost (% of estate) 14.5 16.8 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 6.0 7.2 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Costa Rica and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 70.02: Colombia (Rank: 33) 45.69: El Salvador (Rank: 84) 38.95: Regional Average (Latin America & Caribbean) 34.42: Costa Rica (Rank: 131) 32.07: Honduras (Rank: 142) 27.57: Guatemala (Rank: 153) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Costa Rica – Time and Cost Time Cost 4 3.8 16.8 18 3.5 3.5 14.5 14.5 14.5 16 3.0 3.0 2.9 3 14 12.0 Cost (% of estate) Time (years) 12 2.5 8.5 9.1 10 2 1.7 1.7 8 1.5 6 1 4 0.5 2 0 0 Colombia Costa Rica El Salvador Guatemala Honduras Latin America & OECD high income Caribbean Figure – Resolving Insolvency in Costa Rica and comparator economies – Measure of Quality Costa Rica 2 3 1 0 Page 56   Colombia 5.5 3 1 1.5 Colombia Costa Rica El Salvador Guatemala Honduras Latin America & OECD high income Caribbean Doing Business 2018 Costa Rica Figure – Resolving Insolvency in Costa Rica and comparator economies – Measure of Quality Costa Rica 2 3 1 0 Colombia 5.5 3 1 1.5 El Salvador 4 2 3 0 Guatemala 0 2 2 0 Honduras 4 2 1 0 OECD high income 5.4 2.8 2.3 1.9 Latin America & Caribbean 3.7 2.4 1.9 0.8 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Costa Rica and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 70 66.2 60 50 40 32.6 30.8 29.1 28.0 30 18.9 20 10 0 Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Details – Resolving Insolvency in Costa Rica Indicator Answer Explanation Proceeding liquidation Mirage would initiate an in-court reorganization proceeding (solicitud de concurso) based on (after an article 709 of the Civil Procedure Code. This procedure would involve the appointment of an attempt at insolvency administrator, who will be responsible for the day-to-day business of the reorganization) company while an agreement is negotiated in-court with the creditors. The most likely scenario is that these negotiations won’t end up with an agreement, and therefore the reorganization procedure would be converted into a liquidation procedure after the Mirage’s bankruptcy declaration is issued by the Court (Article 740 of the Code of Civil Procedure). The sale of the secured assets will occur during this stage. Outcome piecemeal sale Insolvency proceeding of liquidation usually involved the end of business operation for the company and the sale of its assets due to the lack of liquidity. Without these assets the company won’t be able to continue with its business operations (Articles 760 and following of the Civil Procedure Code) Page 57   Costa Rica Colombia El Salvador Guatemala Honduras Latin America & Caribbean Doing Business 2018 Costa Rica Details – Resolving Insolvency in Costa Rica Indicator Answer Explanation Proceeding liquidation Mirage would initiate an in-court reorganization proceeding (solicitud de concurso) based on (after an article 709 of the Civil Procedure Code. This procedure would involve the appointment of an attempt at insolvency administrator, who will be responsible for the day-to-day business of the reorganization) company while an agreement is negotiated in-court with the creditors. The most likely scenario is that these negotiations won’t end up with an agreement, and therefore the reorganization procedure would be converted into a liquidation procedure after the Mirage’s bankruptcy declaration is issued by the Court (Article 740 of the Code of Civil Procedure). The sale of the secured assets will occur during this stage. Outcome piecemeal sale Insolvency proceeding of liquidation usually involved the end of business operation for the company and the sale of its assets due to the lack of liquidity. Without these assets the company won’t be able to continue with its business operations (Articles 760 and following of the Civil Procedure Code) Time (in years) 3.0 A reorganization proceeding which is converted into liquidation, similar to the case study, will take about three years. The preparation of the creditors’ claims, the appointment of the insolvency professionals, and the negotiation with creditors during the reorganization stage will last approximately 1.5 years. After this, assuming that there won’t be an agreement with BizBank, the liquidation proceeding will start in accordance with Article 709 Procedure Code. During this stage, the necessary steps towards a judicial sale of the property (inventory preparation, auction, etc.) would take place. The liquidation proceeding would last about 1.5 additional years. This time estimate takes into account a decrease in time to settle in-court disputes in Costa Rica after the creation and full implementation of the Bankruptcy Court in San Jose in 2008, which has reduced the time it takes solve cases like the one at stake from 3.5 to 3 years. Cost (% of 14.5 The costs associated with the reorganization proceeding which is then converted into estate) liquidation like in the actual case would amount to approximately 14.5% of the value of the estate. The main component of this expenditure would be the attorney’s fees around 10% and fees insolvency representatives around 4% based on article 700 of the Code of Civil Procedure. Recovery rate (cents on the 29.1 dollar) Details – Resolving Insolvency in Costa Rica – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 6.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization Page 58   dollar) Doing Business 2018 Costa Rica Details – Resolving Insolvency in Costa Rica – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 6.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 2.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome No 0.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? (c) Other 0.0 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 Page 59   Creditor Doing participation Business 2018 index (0-4) Rica Costa 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for Page 60   work of equal value and nondiscrimination based on the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Costa Rica Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Costa Rica Answer Hiring Page 61   Fixed-term contracts prohibited for permanent tasks? Yes days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Costa Rica Details – Labor Market Regulation in Costa Rica Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) 12.0 Maximum length of xed-term contracts, including renewals (months) 12.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 588.3 Ratio of minimum wage to value added per worker 0.4 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? Yes Whether nonpregnant and nonnursing women can work the same night hours as men No Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 12.0 Paid annual leave for a worker with 5 years of tenure (working days) 12.0 Paid annual leave for a worker with 10 years of tenure (working days) 12.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 12.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Page 62   Third-party Doing approval Business 2018 if nine workers Costa Ricaare dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.3 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure 2.8 Severance pay for redundancy dismissal for a worker with 5 years of tenure 15.2 Severance pay for redundancy dismissal for a worker with 10 years of tenure 25.1 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 14.4 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 120.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? n.a. Business Reforms in Costa Rica In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Costa Rica implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Registering Property: Costa Rica decreased the time needed to transfer a property through several measures, including the introduction of e ective time limits. Protecting Minority Investors: Costa Rica strengthened minority investor protections by allowing greater access to corporate information before and during trial and enhancing disclosure requirements, but weakened shareholder rights in certain major transactions. DB2016 Page 63   Minimum contribution period for unemployment protection (months)? n.a. Doing Business 2018 Costa Rica Business Reforms in Costa Rica In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Costa Rica implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Registering Property: Costa Rica decreased the time needed to transfer a property through several measures, including the introduction of e ective time limits. Protecting Minority Investors: Costa Rica strengthened minority investor protections by allowing greater access to corporate information before and during trial and enhancing disclosure requirements, but weakened shareholder rights in certain major transactions. DB2016 Getting Electricity: The utility in Costa Rica made getting electricity easier by reducing the time required for preparing the design of the external connection works and for installing the meter and initiating the electricity supply.In addition, Costa Rica introduced a new law aimed at curbing power outages through the introduction of a compensation scheme for customers impacted by blackouts. Getting Credit: Costa Rica improved access to credit by adopting a new secured transactions law that establishes a functional secured transactions system and a modern, centralized, notice-based collateral registry. The law broadens the range of assets that can be used as collateral, allows a general description of assets granted as collateral and allows out-of-court enforcement of collateral. Paying Taxes: Costa Rica made paying taxes easier for companies by promoting the use of its electronic ling and payment system for corporate income tax and general sales tax. DB2015 Getting Electricity: Costa Rica reduced the time required for getting electricity by improving the coordination between di erent departments at the utility. Paying Taxes: Costa Rica made paying taxes easier for companies by implementing an electronic system for ling corporate income tax and VAT. DB2014 Starting a Business: Costa Rica made starting a business easier by creating an online platform for business registration, eliminating the requirement to have accounting books legalized and simplifying the legalization of company books. Dealing with Construction Permits: Costa Rica made dealing with construction permits easier by eliminating procedures, improving e ciency and launching an online platform that streamlined the building permit process by integrating di erent agencies’ approval processes. DB2013 Starting a Business: Costa Rica made starting a business easier by streamlining the process of obtaining a sanitary permit from the authorities for low-risk activities. Dealing with Construction Permits: Costa Rica streamlined the process for obtaining construction permits by implementing online approval systems. Getting Credit: Costa Rica improved access to credit information by guaranteeing borrowers’ right to inspect their personal data. Paying Taxes: Costa Rica made paying taxes easier for companies by implementing electronic payment for municipal taxes— though it also introduced a registration at tax. DB2012 Page 64   Registering Property: Costa Rica made transferring property easier and quicker by making property certi cates available online though it also introduced a registration at tax. Doing Business 2018 Costa Rica DB2012 Registering Property: Costa Rica made transferring property easier and quicker by making property certi cates available online through a single website. Paying Taxes: In Costa Rica online payment of social security contributions is now widespread and used by the majority of taxpayers. DB2010 Enforcing Contracts: Costa Rica improved its contract enforcement system by allowing new modes of delivery of service and by simplifying auction procedures by authorizing the publication of a single auction notice. DB2009 Starting a Business: Costa Rica reduced the time required to start a business by digitizing tax registration records and company books. DB2008 Trading across Borders: Costa Rica made trading across borders easier by improving its electronic data interchange system and allowing electronic submission of cargo manifests before arrival of the goods. Page 65   Trading across Borders: Costa Rica made trading across borders easier by improving its electronic data interchange system and allowing electronic submission Doing Business 2018 Costaof cargo manifests before arrival of the goods. Rica Page 66