Doing Business 2018 Chile Economy Pro le of Chile 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 Chile Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region OECD high income DB 2018 Rank 190 1 Chile Income Category High income 55 Population 17,909,754 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 13,530 0 100 71.22 City Covered Santiago DB 2018 Distance to Frontier (DTF) 0 100 77.46: Regional Average (OECD high income) 72.27: Mexico (Rank: 49) 71.22: Chile (Rank: 55) 69.45: Peru (Rank: 58) 58.11: Argentina (Rank: 117) Page 3   56.45: Brazil (Rank: 125) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Chile Ease of Doing Business in Region OECD high income DB 2018 Rank 190 1 Chile Income Category High income 55 Population 17,909,754 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 13,530 0 100 71.22 City Covered Santiago DB 2018 Distance to Frontier (DTF) 0 100 77.46: Regional Average (OECD high income) 72.27: Mexico (Rank: 49) 71.22: Chile (Rank: 55) 69.45: Peru (Rank: 58) 58.11: Argentina (Rank: 117) 56.45: Brazil (Rank: 125) 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 - Chile 1 15 28 44 56 52 61 57 55 65 68 72 82 90 Rank 109 136 163 190 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 - Chile 100 89.55 80.28 82.49 80.56 80 76.17 70.90 62.81 60.00 59.47 60 DTF 50.00 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.01 Change:+0.01 Change:0.00 Investors Change:-0.39 Borders Change:0.00 Change:+3.96 Change:+0.02 Permits Change:0.00 Change:0.00 Change:+0.10 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.01 Change:+0.01 Change:0.00 Investors Change:-0.39 Borders Change:0.00 Change:+3.96 Change:+0.02 Permits Change:0.00 Change:0.00 Doing Business 2018 Chile Change:+0.10 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 Chile Standardized Company Legal form Sociedad Anónima (SA) – closed corporation Paid-in minimum capital requirement CLP 0 City Covered Santiago OECD high OECD high Indicator Chile income income Overall Best Performer Procedure – Men (number) 7 4.9 4.9 1.00 (New Zealand) Time – Men (days) 5.5 8.5 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 3.0 3.1 3.1 0.00 (United Kingdom) Procedure – Women (number) 7 4.9 4.9 1.00 (New Zealand) Time – Women (days) 5.5 8.5 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 3.0 3.1 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 8.7 8.7 0.00 (113 Economies) Figure – Starting a Business in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 91.35: Regional Average (OECD high income) 89.55: Chile (Rank: 65) 85.84: Mexico (Rank: 90) 83.39: Peru (Rank: 114) 75.15: Argentina (Rank: 157) 65.05: Brazil (Rank: 176) 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 Chile – Procedure, Time and Cost Time Cost 3 5 2.5 ost (% of income per capita) 4 2 Time (days) 3 1.5 2 1 Page 6   starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Chile Figure – Starting a Business in Chile – Procedure, Time and Cost Time Cost 3 5 2.5 Cost (% of income per capita) 4 2 Time (days) 3 1.5 2 1 1 0.5 0 0 1 2 3 4 5 *6 *7 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 Chile – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Draft online the statutes of the company and obtain an authentication Less than one day no charge number (online procedure) Agency : Notary Since May, 2013, entrepreneurs can draft the articles of association online through a new online platform (www.tuempresasenundia.cl) and obtain an authorization number. With this number, they will visit the notary to obtain a digital signature. 2 Have a notary certify the statutes with a digital signature online Less than one day CLP 6,000 per Agency : Commercial Registry (online procedure) signature (assuming 5 signatures) On February 8, 2013, Law 20.659 was published, which came into force on May 2, 2013. This new law simpli es the process of starting Limited Liability Companies by allowing entrepreneurs to register online (www.tuempresasenundia.cl) at zero cost. The new system allows users to register (modify, cancel, etc.) a company online, at zero cost. The system provides the certi cate of existence immediately, and it automatically assigns a tax payer ID number to the company (which is the same as the Company Registration ID). The system will require that all partners subscribing the document have an advanced electronic signature (a token), or that they do the process with a notary that uses his own advanced electronic signature. 3 Give notice of initiation of activities to the Internal Revenue Service Less than one day no charge online (online procedure) Agency : Internal Revenue Service Page 7   Registration is a sole procedure to be complied with for all tax purposes in (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Chile Details – Starting a Business in Chile – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Draft online the statutes of the company and obtain an authentication Less than one day no charge number (online procedure) Agency : Notary Since May, 2013, entrepreneurs can draft the articles of association online through a new online platform (www.tuempresasenundia.cl) and obtain an authorization number. With this number, they will visit the notary to obtain a digital signature. 2 Have a notary certify the statutes with a digital signature online Less than one day CLP 6,000 per Agency : Commercial Registry (online procedure) signature (assuming 5 signatures) On February 8, 2013, Law 20.659 was published, which came into force on May 2, 2013. This new law simpli es the process of starting Limited Liability Companies by allowing entrepreneurs to register online (www.tuempresasenundia.cl) at zero cost. The new system allows users to register (modify, cancel, etc.) a company online, at zero cost. The system provides the certi cate of existence immediately, and it automatically assigns a tax payer ID number to the company (which is the same as the Company Registration ID). The system will require that all partners subscribing the document have an advanced electronic signature (a token), or that they do the process with a notary that uses his own advanced electronic signature. 3 Give notice of initiation of activities to the Internal Revenue Service Less than one day no charge online (online procedure) Agency : Internal Revenue Service Registration is a sole procedure to be complied with for all tax purposes in order to obtain a Chilean Tax ID (RUT number). Specially regarding those persons (individual or legal entities) that are going to develop activities in Chile, taxpayers must obtain a RUT number and perform "initiation of activities" ("Inicio de Actividades") before the Chilean IRS, which is a sworn statement submitted to inform that the taxpayer will start to develop economical activities in Chile. Both procedures can be carried out through the Chilean IRS website (www.sii.cl). 4 Print receipts/invoices in the authorized printing company 1 day USD 43 per 50-page Agency : Receipt and invoices can be printed in any printed company, with book the only requirement that the IRS format for such documents is followed The printed document will acquire tax validity status, provided that it is stamped by the Chilean IRS and only for the period of time authorized by the referred tax authority. According Law 20.727, starting November, 2014, most of the VAT tax documentation shall be issued electronically (invoices, debit and credit notes, among others). 5 Seal accounting books, invoices and other documents at the IRS 1 day no charge Agency : Internal Revenue Service Invoice and receipt forms can be sealed only after the tax registration number (rol unico tributario, or RUT) has been obtained, because the RUT must appear on them. This procedure is generally carried out once the forms are duly printed. Page 8   When using electronic invoices, companies are not required to seal of the VAT tax documentation shall be issued electronically (invoices, debit Doing and 2018among credit notes, Business others). Chile 5 Seal accounting books, invoices and other documents at the IRS 1 day no charge Agency : Internal Revenue Service Invoice and receipt forms can be sealed only after the tax registration number (rol unico tributario, or RUT) has been obtained, because the RUT must appear on them. This procedure is generally carried out once the forms are duly printed. When using electronic invoices, companies are not required to seal accounting books, invoices and other documents at the IRS. Therefore, once electronic invoices are enacted in law and in practice, this procedure will be eliminated. 6 Obtain a Business License (Patente Comercial) from the Municipality 1 day, simultaneous between 0.25% and Agency : Municipality with previous 0.5% of the procedure company's start-up A Business License (Patente Comercial) must be obtained upon business capital start-up and then renewed on a yearly basis. The request to obtain the patente is presented through a form, along with the Tax ID (RUT) and the company's articles of association. The fee to obtain the patente varies per Municipality, between 0.25% and 0.5% of the company's start-up capital, as per Decree 2,385 of 1996. Decree Law 3063/1979 rules that any profession, activity, industry, commerce, art, or any other pro table activity, independent of its denomination, must obtain a Business License from the Municipality. A separate license must be obtained from the corresponding municipality for each of the enterprise’s establishments, o ces, warehouses, and so forth. 7 Register with the labor-related accident insurance (Seguro Social contra 1 day, simultaneous no charge Riesgos de Accidentes del Trabajo y Enfermedades Profesionales) with previous Agency : Labor Insurance (Mutuales de Seguridad) procedure According to Law 16.744 (article 15), it is mandatory for the employer to pay an insurance which covers work related accidents and professional illnesses. Entrepreneurs have the option to pay the insurance to the public Institute of Occupational Safety (Instituto de Seguridad Laboral (ISL), former Instituto de Normalización Previsional) or to private nonpro t entities known as Mutuales. In Chile, there are three private Mutuales: • Asociación Chilena de Seguridad. • Mutual de Seguridad de la Cámara Chilena de Construcción. de la construcción. • Instituto de Seguridad del Trabajo. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information Page 9   Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Chile 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 Chile Standardized Warehouse Estimated value of warehouse CLP 453,436,351.40 City Covered Santiago OECD high OECD high Indicator Chile income income Overall Best Performer Procedures (number) 12 12.5 12.5 7.00 (Denmark) Time (days) 133 154.6 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 1.3 1.6 1.6 0.10 (5 Economies) Building quality control index (0-15) 13.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.28: Chile (Rank: 15) 75.14: Regional Average (OECD high income) 71.90: Peru (Rank: 61) 68.28: Mexico (Rank: 87) 49.83: Brazil (Rank: 170) 49.27: Argentina (Rank: 171) 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 Chile – Procedure, Time and Cost Time Cost 0.9 120 0.8 Cost (% of warehouse value) 0.7 100 0.6 Time (days) 80 0.5 60 0.4 0.3 40 0.2 20 0.1 0 0 1 *2 *3 4 5 *6 7 8 9 * 10 11 12 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 11   component indicators. Doing Business 2018 Chile Figure – Dealing with Construction Permits in Chile – Procedure, Time and Cost Time Cost 0.9 120 0.8 Cost (% of warehouse value) 0.7 100 0.6 Time (days) 80 0.5 60 0.4 0.3 40 0.2 20 0.1 0 0 1 *2 *3 4 5 *6 7 8 9 * 10 11 12 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 Chile and comparator economies – Measure of Quality 14 13.0 11.7 12.0 12 11.0 11.4 10 9.0 Index score 8 6 4 2 0 Chile Argentina Brazil Mexico Peru OECD high income Details – Dealing with Construction Permits in Chile – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain results of geotechnical study / soil test 21 days CLP 3,500,000 Agency : Private licensed company BuildCo will request a soil test for the structural calculations for the foundation. 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. It allows to build a solid foundation and avoid structures to be damaged or collapsed or leaned. 2 Request and obtain preliminary information from the Municipality 10 days no charge Agency : Municipality BuildCo. requests and obtains a "Certi cado de Informaciones Previas" Page 12   Chile Argentina Brazil Mexico Peru OECD high income Doing Business 2018 Chile Details – Dealing with Construction Permits in Chile – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain results of geotechnical study / soil test 21 days CLP 3,500,000 Agency : Private licensed company BuildCo will request a soil test for the structural calculations for the foundation. 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. It allows to build a solid foundation and avoid structures to be damaged or collapsed or leaned. 2 Request and obtain preliminary information from the Municipality 10 days no charge Agency : Municipality BuildCo. requests and obtains a "Certi cado de Informaciones Previas" (background information), which entails zoning and planning information. 3 Request and obtain indication on water and sewage availability with 5 days no charge Sanitation Company Agency : Sanitation Company BuildCo. requests the availability from the utility company in order to install their services. 4 Request and obtain risk assessment from the Regional Sanitary 5 days CLP 16,000 Authority (Secretaría Regional Ministerial de Salud (Seremi)) Agency : Regional Sanitary Authority (Secretaría Regional Ministerial de Salud (Seremi)) Once BuildCo obtained the clearance from the Sanitary Company (utilities) , BuildCo may now request a risk classi cation from the sanitary authority. The General Urbanism and Construction Ordinance of Chile (“Ordenanza General de Urbanismo y Construcciones) under Article 4.14.2 sets parameters for qualifying industrial or warehousing facilities into 4 categories: Dangerous, Unhealthy / Pollutant, Irritating or Harmless. Based on this Ordinance, warehousing or industrial establishments shall be assessed on a case by case basis by the respective Regional Sanitary Authority (“Secretaría Regional Ministerial (Seremi) de Salud”), taking into account the risks that the building may cause to their workers, neighborhood and community. A warehouse such as the one in the Doing Business case study would likely be rated "Harmless" because it is used for storage of non-hazardous items such as books. 5 Request and obtain water and sewerage supply certi cate from 15days no charge Sanitation Company Agency : Sanitation Company Upon receiving the permit from the Regional Sanitary Authority (Secretaría Regional Ministerial de Salud (Seremi)), BuildCo submit this permit to the Municipality as a proof that water and sewerage connection can be obtained. 6 Request and obtain provisional installation permit from the 5 days no charge Municipality Agency : Municipality In parallel with the interaction with the utility company, BuildCo, can request Page 13   Regional Ministerial de Salud (Seremi)), BuildCo submit this permit to the Doing Municipality Business 2018as a proof that water and sewerage connection can be obtained. Chile 6 Request and obtain provisional installation permit from the 5 days no charge Municipality Agency : Municipality In parallel with the interaction with the utility company, BuildCo, can request the possibility to have some services while the construction takes place. To obtain a provisional permit for installation of temporary facilities, BuildCo’s architects must meet the Municipality’s architects to review the drawings and designs. This permit enables BuildCo to have bathrooms, electricity, and so forth on the construction site. 7 Request and obtain building permit 68 days CLP 2,236,551 Agency : Municipality BuildCo must obtain a municipal building permit before construction starts. An external reviewer is also involved in this process. In 2005, a number of municipalities introduced a pilot program for a one- stop shop (la Ventanilla Transaccional de Trámites Municipales, VTM), an Internet platform where nine proceedings can be completed. The project was expected to be in full operation in 26 municipalities by 2006. The system is expected to cut processing time to 8 days. On January 12, 2006, the Municipality of Santiago introduced major changes to its regulatory plan (plano regulador) to regulate some omissions from the construction ordinance (ordenanza de construcción), without changing the current rules of construction. Some municipalities -- for example, Las Condes, Providencia, San Miguel, and Ñuñoa -- have restricted construction in terms of density and building height. The same restrictions were expected in Santiago in 2007. The latter is due to community pressures, reduced municipal revenues for this type of building permit, and the impact of the projects on public services and infrastructure. Other municipalities in the greater Santiago area are planning the opposite to attract investments, such as La Florida, San Bernardo, Maipú, and Quinta Normal. Environmental requirements are requested to obtain building permits, which in turn, can a ect the schedule of a construction project. The plot for the case study warehouse would most likely be located in Los Andes, which has not been a ected by either change. The cost of the building permit is 1.5% of the construction cost. The construction cost is calculated according to a fee schedule. The fee schedule is not based on a simple classi cation of buildings. There are two elements to consider: 1) classi cation based on material and structure used and 2) classi cation based on the amount of positive attributes that the building has. Regarding classi cation based on material, one can classify the building based on 9 di erent categories (A-I) depending on the materials (steel, concrete, wood, etc.) and structures used. Regarding the classi cation based on positive attributes, one can classify the building into 5 di erent categories based on the number points the building would obtain following the provided technical guide (design, structure, installations, and nishing of the building). The 5 di erent categories are: Category 1 – Superior (20 or more points); Category 2 - Medium superior (13-19 points); Category 3 - Medium (6-12 Page 14   points); Category 4 - Medium inferior (0-5 points); Category 5 - Inferior (based and designs. This permit enables BuildCo to have bathrooms, electricity, and Doing so forth on the Business Chile site. construction 2018 7 Request and obtain building permit 68 days CLP 2,236,551 Agency : Municipality BuildCo must obtain a municipal building permit before construction starts. An external reviewer is also involved in this process. In 2005, a number of municipalities introduced a pilot program for a one- stop shop (la Ventanilla Transaccional de Trámites Municipales, VTM), an Internet platform where nine proceedings can be completed. The project was expected to be in full operation in 26 municipalities by 2006. The system is expected to cut processing time to 8 days. On January 12, 2006, the Municipality of Santiago introduced major changes to its regulatory plan (plano regulador) to regulate some omissions from the construction ordinance (ordenanza de construcción), without changing the current rules of construction. Some municipalities -- for example, Las Condes, Providencia, San Miguel, and Ñuñoa -- have restricted construction in terms of density and building height. The same restrictions were expected in Santiago in 2007. The latter is due to community pressures, reduced municipal revenues for this type of building permit, and the impact of the projects on public services and infrastructure. Other municipalities in the greater Santiago area are planning the opposite to attract investments, such as La Florida, San Bernardo, Maipú, and Quinta Normal. Environmental requirements are requested to obtain building permits, which in turn, can a ect the schedule of a construction project. The plot for the case study warehouse would most likely be located in Los Andes, which has not been a ected by either change. The cost of the building permit is 1.5% of the construction cost. The construction cost is calculated according to a fee schedule. The fee schedule is not based on a simple classi cation of buildings. There are two elements to consider: 1) classi cation based on material and structure used and 2) classi cation based on the amount of positive attributes that the building has. Regarding classi cation based on material, one can classify the building based on 9 di erent categories (A-I) depending on the materials (steel, concrete, wood, etc.) and structures used. Regarding the classi cation based on positive attributes, one can classify the building into 5 di erent categories based on the number points the building would obtain following the provided technical guide (design, structure, installations, and nishing of the building). The 5 di erent categories are: Category 1 – Superior (20 or more points); Category 2 - Medium superior (13-19 points); Category 3 - Medium (6-12 points); Category 4 - Medium inferior (0-5 points); Category 5 - Inferior (based on de nition 2.3). The Doing Business warehouse would fall into classi cation A and obtains 3 points. Thus, the warehouse falls into classi cation "A4" (A because it is steel and 4 because it receives 3 points). Therefore, the cost per square meter is CLP 114642 8 Request and receive inspection in the middle of construction 1 day no charge Agency : Municipality Page 15   BuildCo. receives an inspection anytime during the construction period. This and 4 because it receives 3 points). Therefore, the cost per square meter is Doing CLP 114642 2018 Business Chile 8 Request and receive inspection in the middle of construction 1 day no charge Agency : Municipality BuildCo. receives an inspection anytime during the construction period. This revision is done with the in-house engineer or architect hired by BuildCo. 9 Request and obtain certi cate of compliance for roads and sidewalks 10 days CLP 8,468 from SERVIU Agency : SERVIU BuildCo. can request and obtain certi cate of compliance for roads and sidewalks fregulations compliance from SERVIU, which is independent from the certi cate of urbanization. Receive connection to water services 7 days CLP 315,671 10 Agency : Sanitation Company The connection takes place at any time upon BuildCo’s request (but within no more than 7 days maximum) for each utility service. 11 Request and receive nal inspection 1 day no charge Agency : Municipality According to Decree N° 47 de 1992 del Minvu (OGUC) this nal inspection is a requirement in order to obtain the nal project approval. 12 Request and obtain project approval 12 days no charge Agency : Municipality The Municipality is noti ed of the project's completion after the independent inspector submits a positive project evaluation. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Chile – Measure of Quality Answer Score Building quality control index (0-15) 13.0 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; In o cial gazette. 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 Page 16   Takes place simultaneously with previous procedure. Doing Business 2018 Chile Details – Dealing with Construction Permits in Chile – Measure of Quality Answer Score Building quality control index (0-15) 13.0 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; In o cial gazette. 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; Yes, external engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Page 17   Liability and insurance regimes index (0-2) 1.0 for nal Doing Business 2018 Chile 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 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) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Page 18   architect or engineer. Doing Business 2018 Chile 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 Chile Standardized Connection Price of electricity (US cents per kWh) 9.9 Name of utility Enel Distribución Chile S.A. City Covered Santiago OECD high OECD high Indicator Chile income income Overall Best Performer Procedures (number) 5 4.7 4.7 2 (United Arab Emirates) Time (days) 43 79.1 79.1 10 (United Arab Emirates) Cost (% of income per capita) 68.1 63.0 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 6 7.4 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 84.44: Regional Average (OECD high income) 82.49: Chile (Rank: 44) 82.46: Brazil (Rank: 45) 79.01: Peru (Rank: 63) 70.99: Mexico (Rank: 92) 70.01: Argentina (Rank: 95) 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 Chile – Procedure, Time and Cost Time Cost 70 40 60 35 Cost (% of income per capita) 30 50 Time (days) 25 40 20 30 15 20 10 5 Page 20   10 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Chile Figure – Getting Electricity in Chile – Procedure, Time and Cost Time Cost 70 40 60 35 Cost (% of income per capita) 30 50 Time (days) 25 40 20 30 15 20 10 10 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 – Getting Electricity in Chile and comparator economies – Measure of Quality 8 7.4 7 7 6 6 6 5.4 5 Index score 5 4 3 2 1 0 Chile Argentina Brazil Mexico Peru OECD high income Details – Getting Electricity in Chile – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to Enel Distribución Chile S.A. and await estimate 15 calendar days CLP 475,142.22 Agency : Enel Distribución Chile S.A. The customer submits an application with Enel Distribución Chile S.A. in person. Based on the application Enel Distribución Chile S.A. will prepare a technical project for the connection and will issue an estimate of the costs. Enel Distribución Chile S.A. requires a number of supporting documents with the application: • Address of the premise that is to be connected • Sketch of the location of the premise • Certi cate of prior conditions ("Certi cado de condiciones previas") Page 21   • Construction plans detailing the layout of the oors (not needed for a Chile Argentina Brazil Mexico Peru OECD high income Doing Business 2018 Chile Details – Getting Electricity in Chile – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to Enel Distribución Chile S.A. and await estimate 15 calendar days CLP 475,142.22 Agency : Enel Distribución Chile S.A. The customer submits an application with Enel Distribución Chile S.A. in person. Based on the application Enel Distribución Chile S.A. will prepare a technical project for the connection and will issue an estimate of the costs. Enel Distribución Chile S.A. requires a number of supporting documents with the application: • Address of the premise that is to be connected • Sketch of the location of the premise • Certi cate of prior conditions ("Certi cado de condiciones previas") • Construction plans detailing the layout of the oors (not needed for a warehouse) • Plan of the layout of infrastructure services (such as water and gas pipes) that might interfere with the civil works. Speci cations of the type of connection required (overhead/underground, 1- or 3-phased, traditional or with a concentrador de medida) • Required load (in kW) • Type of consumption tari requested, which can be for example AT-3, AT- 4.3 if the metering is for medium voltage or BT-3, BT 4.3 if metering is for low voltage. The decision on which tari to choose will depend on the consumption pro le for the warehouse. • Coordinates of the customer (Name, tax registration number, bank account information, commercial address, telephone, legal representative) • Coordinates of the applicant (Name, tax registration number, bank account information, commercial address, telephone) • Coordinates of the contact person on the construction site to coordinate connection works. • Date by which the supply will be need to be turned on • In case that the maximum load will only be reached over time, indicate the a pro le of the timeline 2 Receive external inspection by Enel Distribución Chile S.A. 3 calendar days CLP 0 Agency : Enel Distribución Chile S.A. After receiving the application, Enel Distribución Chile S.A. will conduct an inspection in situ to identify the exact connection point. 3 Sign supply contract before a notary 1 calendar day CLP 5,000 Agency : Notario If the customer is the owner of a limited company, he has to sign the supply contract in front of a notary attesting to his role as the owner of the company. 4 Pay connection costs and await completion of connection works by Enel 14 calendar days CLP 5,691,147.92 Distribución Chile S.A. Agency : Enel Distribución Chile S.A. The customer accepts the contract and submits the necessary supporting material such as the declaration in front of the notary and the power of attorney. For the nalization of the contract the acceptance of the cost estimate has to be accepted and paid for and the inspection certi cate issued by the "Superintendencia de Electricidad y Combustibles (SEC)" on the internal wiring (Anexo TE-1 SEC) has to be submitted. Page 22   contract in front of a notary attesting to his role as the owner of the Doing company. Business 2018 Chile 4 Pay connection costs and await completion of connection works by Enel 14 calendar days CLP 5,691,147.92 Distribución Chile S.A. Agency : Enel Distribución Chile S.A. The customer accepts the contract and submits the necessary supporting material such as the declaration in front of the notary and the power of attorney. For the nalization of the contract the acceptance of the cost estimate has to be accepted and paid for and the inspection certi cate issued by the "Superintendencia de Electricidad y Combustibles (SEC)" on the internal wiring (Anexo TE-1 SEC) has to be submitted. The payment of the estimate can be done in one of the three o ces of Enel Distribución Chile S.A. determined for this purpose. For 3-phase connections the metering material is included in connection tari . Other items included in the tari are current transformers and other material, inspections, approvals with the municipality and the civil works (excavation permit) needed for the connection. The price of the excavation permit to open a sidewalk (2 m width * 4 m long) for a period of 6 days in the town of Santiago is about 60,000 CLP. To sign the supply contract the following documents have to be submitted: • The declaration in front of the notary attesting to the fact that the customer is the owner of the building. If the owner is a company the declaration has to clarify the persons that are legally responsible for the actions of the company. • Certi cate of the number of the relevant municipality (“Certi cado de número Municipal”). • Copy of the identify document of the owner or legal representative of the company • Tax registration number of copy of the tax registration number (Rol Único Tributario - UT). • Coordinates of the person receiving the cost estimate for the connection and future consumption bills. • Relevant documents needed to grant the “way of right” for installation of transformers on the premises of the customer. Once the supply contract has been signed, Enel Distribución Chile S.A. will then carry out the actual connection works. Material for the connection is provided by Enel Distribución Chile S.A. and always available. 5 Receive meter installation and nal connection 14 calendar days CLP 0 Agency : Enel Distribución Chile S.A. The last step of the connection works (meter installation) can only be done after the internal wiring installation has been approved by the Superintendencia de Electricidad y Combustibles (SEC). A minimum delay of two weeks is needed for this step to allow SEC to inform the surrounding community of the cut in electricity in order to connect the new customer. Takes place simultaneously with previous procedure. Details – Getting Electricity in Chile – Measure of Quality Answer Page 23   Reliability of supply and transparency of tari index (0-8) 6 Takes place simultaneously with previous procedure. Doing Business 2018 Chile Details – Getting Electricity in Chile – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 3.4 System average interruption frequency index (SAIFI) 1.3 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 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) 0 Are e ective tari s available online? Yes Link to the website, if available online https://www.eneldist ribucion.cl/tarifas Are customers noti ed of a change in tari ahead of the billing cycle? No Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Page 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 Chile 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 CLP 453,436,351.40 City Covered Santiago Page 25   OECD high OECD high Doing Business 2018 Chile Standard Property Transfer Property value CLP 453,436,351.40 City Covered Santiago OECD high OECD high Indicator Chile income income Overall Best Performer Procedures (number) 6 4.6 4.6 1.00 (4 Economies) Time (days) 28.5 22.3 22.3 1.00 (3 Economies) Cost (% of property value) 1.2 4.2 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 14.0 22.7 22.7 29.00 (Singapore) Figure – Registering Property in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.81: Regional Average (OECD high income) 74.90: Peru (Rank: 44) 70.90: Chile (Rank: 61) 60.81: Mexico (Rank: 99) 56.75: Argentina (Rank: 117) 52.60: Brazil (Rank: 131) 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 Chile – Procedure, Time and Cost Time Cost 1.2 25 1 Cost (% of property value) 20 0.8 Time (days) 15 0.6 10 0.4 5 0.2 0 0 1 *2 *3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. 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 Chile Figure – Registering Property in Chile – Procedure, Time and Cost Time Cost 1.2 25 1 Cost (% of property value) 20 0.8 Time (days) 15 0.6 10 0.4 5 0.2 0 0 1 *2 *3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Chile and comparator economies – Measure of Quality 25 22.7 20 17.5 16.3 Index score 15 14.0 13.5 13.8 10 5 0 Chile Argentina Brazil Mexico Peru OECD high income Details – Registering Property in Chile – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 The Lawyer drafts the sale and purchase agreement while carrying out 9-21 days About 1% of due diligence research on the property and parties (simultaneous with transaction value Agency : Lawyer Procedures 2 and 3) A lawyer is contracted to conduct due diligence of the property’s legal history, for not less than 10 years. The lawyer will also obtain the documents described in Procedures 2-3 from the Property Registry and the Treasury, as well as undertake the registration formalities. Lawyer fees for the study of the titles, drafting of the contract and completing all the formalities involved in the registration Procedure range between 1 and 2.5% of the transaction value. While it is not legally required to employ a lawyer for the study and the registration, it is common practice. Page 27   Chile Argentina Brazil Mexico Peru OECD high income Doing Business 2018 Chile Details – Registering Property in Chile – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 The Lawyer drafts the sale and purchase agreement while carrying out 9-21 days About 1% of due diligence research on the property and parties (simultaneous with transaction value Agency : Lawyer Procedures 2 and 3) A lawyer is contracted to conduct due diligence of the property’s legal history, for not less than 10 years. The lawyer will also obtain the documents described in Procedures 2-3 from the Property Registry and the Treasury, as well as undertake the registration formalities. Lawyer fees for the study of the titles, drafting of the contract and completing all the formalities involved in the registration Procedure range between 1 and 2.5% of the transaction value. While it is not legally required to employ a lawyer for the study and the registration, it is common practice. 2 Request copies of property titles for the past 10 years, the ‘Certi cado de 7 days Included in Vigencia’ and certi cate of encumbrance from Registry (simultaneous with Procedure 5 Agency : Property Registry Procedures 1 and 3) The copies of the property titles, the ‘Certi cado de Vigencia’ and the Encumbrance certi cate (‘Certi cado de Hipotecas y Gravámenes y de Interdicciones y Prohibiciones de Enajenar’) can all be requested at the same time. Both documents are usually requested by the lawyer responsible for the diligence of the property. The copies of the property titles are obtained in about 2 days while the certi cates in 7 days. There is a possibility to request the copies online paying through the Internet (www.conservador.cl) and receiving the copies through the mail. 3 Obtain evidence of complete payment of land tax from Treasury Less than a day No cost (Servicios de Tesorerías) (online procedure Agency : Treasury (Servicios de Tesorerías) and simultaneous with Procedures 1 The Property Taxes Debt Certi cated (Certi cado de Deuda de and 2) Contribuciones) is granted by the Treasury (Tesorería General de la República) and can be requested online www.tesoreria.cl. This document certi cates that the property does not have debts regarding property taxes. 4 Execution and signing of the public deed 2 days CLP 30,000 (copies Agency : Public Notary o ce and other expenses at the Notary’s office) Upon completion of the due diligence, the sale and purchase agreement is + 0.1% of property notarized. Both parties have to sign in front of a Notary. Jointly with the price with a execution of the public deed, the Public Notary has the duty of complete the maximum charge of declaration about property transfer form (2890 Form). Two copies of this CLP 128,000 form are required in order to register the ownership transfer in the corresponding Property Registry. The Property Registry conserves one copy, (Notary’s fees) and the other one is send to de IRS (Servicio de Impuesto Internos) with the purpose to complete and update the property scal cadaster. 5 Registration of the public deed at the Real Estate O ce 7-15 days CLP 13,500 (copies Agency : Real Estate O ce and certificates) + 0.2% of the property In the case of properties located in the cities of Santiago, Valparaíso and Viña value (Stamp duty) del Mar the value is 0.2% of the property value. For other cities the value is 0.3%, with a maximum charge of approx, CLP 260,000. The parties can request the transfer personally at the registry the property transfer or online at the http://www.cbrsantiago.cl/portall_cbr/ website . The Page 28   Registry checks the payment of all taxes related to the property. The registry and the other one is send to de IRS (Servicio de Impuesto Internos) with the Doing purpose Businessto complete and update the property scal cadaster. 2018 Chile 5 Registration of the public deed at the Real Estate O ce 7-15 days CLP 13,500 (copies Agency : Real Estate O ce and certificates) + 0.2% of the property In the case of properties located in the cities of Santiago, Valparaíso and Viña value (Stamp duty) del Mar the value is 0.2% of the property value. For other cities the value is 0.3%, with a maximum charge of approx, CLP 260,000. The parties can request the transfer personally at the registry the property transfer or online at the http://www.cbrsantiago.cl/portall_cbr/ website . The Registry checks the payment of all taxes related to the property. The registry has a digital record of all requests, but in the registry all the transfer is done on paper. The registry is based on a deed system, and covers the City of Santiago and the great Santiago. The Registry provides the information of the transaction and the value of the property and taxes to the SII within the rst ten days of the following month. The time limit for the registry’s decision is 2 days, and there is a 2-month period for the parties to amend any mistake. Note: The registration time refers to the Registry in Santiago. Outside of Santiago, the time would be longer (up to 3 weeks). 6 Obtain a Property Certi cate and a Mortgages and Ownership Less than a day No cost Limitations Certi cate (online procedure) Agency : Real Estate O ce Once the registration has been completed, it is recommended to obtain from the Conservador de Bienes Raíces de Santiago (the Real Estate O ce) (i) a copy of the Property Certi cate stating the new ownership, (ii) Mortgages and Ownership Limitations Certi cate, stating the new ownership is clean. While this procedure is not legally required, it ensures that all the information is correct. If the registration was done through the portal, the applicant can download the updated ownership certi cate at the http://www.cbrsantiago.cl/portall_cbr/ website. There is no need for title insurance in Chile since the Registrar and the Notaries must personally answer for their mistakes on their functions. They hire responsible insurance for these cases. Outside of Santiago, it may take up to 2 weeks to obtain the title and certi cates. Takes place simultaneously with previous procedure. Details – Registering Property in Chile – Measure of Quality Answer Score Quality of the land administration index (0-30) 14.0 Reliability of infrastructure index (0-8) 2.0 What is the institution in charge of immovable property registration? Conservador de Bienes y Raices de Santiago 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 Page 29   restrictions and the like)? Takes place simultaneously with previous procedure. Doing Business 2018 Chile Details – Registering Property in Chile – Measure of Quality Answer Score Quality of the land administration index (0-30) 14.0 Reliability of infrastructure index (0-8) 2.0 What is the institution in charge of immovable property registration? Conservador de Bienes y Raices de Santiago 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: Santiago City Hall In what format are the majority of maps of land plots kept in the largest business city— Paper 0.0 in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 3.5 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.con servador.cl - the list of document and fee schedule are listed under each service o ered by the Land registry 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.con servador.cl - the list of document and fee schedule are listed under Page 30   each service immovable property registration in the largest business city made publicly available– and if Doing so, how? 2018 Business Chile Link for online access: https://www.con servador.cl - the list of document and fee schedule are listed under each service o ered by the Land registry Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: https://www.con servador.cl/port al/inscripcion_pr opiedad Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, on public 0.5 —and if so, how? boards Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 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 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 5.5 Page 31   Are all Doing privately held Business 2018 plots in the economy mapped? landChile No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 5.5 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; 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 The Juzgado de property worth 50 times gross national income (GNI) per capita and located in the Letras ( rst largest business city, what court would be in charge of the case in the rst instance? 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) -1.0 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? No -1.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) Page 32   measures rules and practices a ecting the coverage, scop e and Protection of secured creditors’ rights through Do married men and married women have equal ownership rights to property? No -1.0 Doing Business 2018 Chile 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. OECD high OECD high Indicator Chile income income Overall Best Performer Strength of legal rights index (0-12) 4 6.0 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 6 6.6 6.6 8.00 (34 Economies) Page 33   Credit registry coverage (% of adults) 49.5 18.3 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Chile OECD high OECD high Indicator Chile income income Overall Best Performer Strength of legal rights index (0-12) 4 6.0 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 6 6.6 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 49.5 18.3 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 14.3 63.7 63.7 100.00 (23 Economies) Figure – Getting Credit in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 90.00: Mexico (Rank: 6) 80.00: Peru (Rank: 20) 63.03: Regional Average (OECD high income) 55.00: Argentina (Rank: 77) 50.00: Chile (Rank: 90) 45.00: Brazil (Rank: 105) 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 Chile and comparator economies 12 10 10 8 8 Index score 6.0 6 4 4 3 2 2 0 Chile Argentina Brazil Mexico Peru OECD high income Details – Legal Rights in Chile Strength of legal rights index (0-12) 4 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Page 34   Chile Argentina Brazil Mexico Peru OECD high income Doing Business 2018 Chile Details – Legal Rights in Chile Strength of legal rights index (0-12) 4 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds 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? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law No allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Chile and comparator economies 10 8 8 8 8 7 6.6 Index score 6 6 4 2 0 Chile Argentina Brazil Mexico Peru OECD high income Details – Credit Information in Chile Page 35   0 Chile Doing Business 2018 Chile Argentina Brazil Mexico Peru OECD high income Details – Credit Information in Chile 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? No 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 No No 0 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 Yes 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) 6 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 1,716,096 5,923,401 Number of firms 45,516 178,078 Total 1,761,612 6,101,479 Percentage of adult population 14.3 49.5 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 14.3 49.5 Doing Business 2018 Chile 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. OECD high OECD high Indicator Chile income income Overall Best Performer Extent of conflict of interest regulation index (0- 7 6.4 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 5 6.4 6.4 Page 37   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Chile OECD high OECD high Indicator Chile income income Overall Best Performer Extent of conflict of interest regulation index (0- 7 6.4 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 5 6.4 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 63.93: Regional Average (OECD high income) 63.33: Argentina (Rank: 43) 63.33: Brazil (Rank: 43) 61.67: Peru (Rank: 51) 60.00: Chile (Rank: 57) 58.33: Mexico (Rank: 62) 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 Chile and comparator economies – Measure of Quality Chile 2 6 8 4 9 7 Argentina 7 2 7 7 9 6 Brazil 8 8 5 6 7 4 Mexico 4 5 8 6 7 5 Peru 5 6 9 3 8 6 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 0 5 10 15 20 25 30 35 40 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 Chile – 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 Chile Details – Protecting Minority Investors in Chile – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 7 Extent of disclosure index (0-10) 8 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 2.0 2) the transaction and on the con ict of interest Extent of director liability index (0-10) 6 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 Yes 1.0 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) 7 Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction documents? (0-1) Page 39   shareholder Ease ofBusiness Doing suits index 2018 Chile(0-10) 7 Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without 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) 5 Extent of shareholder rights index (0-10) 9 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 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 Yes 1.0 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 No 0.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Page 40   Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 Can shareholders remove members of the board of directors without cause before the No 0.0 end of Doing their term? Business 2018 Chile 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? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 2 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 No 0.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? No 0.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be 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. Page 41   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 Chile 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. OECD high OECD high Indicator Chile income income Overall Best Performer Payments (number per year) 7 10.9 10.9 3 (Hong Kong SAR, China) Page 42   return, but within the tax assessment period. Doing Business 2018 Chile OECD high OECD high Indicator Chile income income Overall Best Performer Payments (number per year) 7 10.9 10.9 3 (Hong Kong SAR, China) Time (hours per year) 291 160.7 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 33.0 40.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 58.36 83.45 83.45 99.38 (Estonia) Figure – Paying Taxes in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 83.07: Regional Average (OECD high income) 76.17: Chile (Rank: 72) 67.01: Mexico (Rank: 115) 65.81: Peru (Rank: 121) 49.34: Argentina (Rank: 169) 32.97: Brazil (Rank: 184) 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 Chile and comparator economies – Measure of Quality 90 83.45 80 70 58.36 60 Index score 47.94 50 40.51 40 30 19.24 20 7.80 10 0 Chile Argentina Brazil Mexico Peru OECD high income Details – Paying Taxes in Chile Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate (% of Notes contribution (number) Payments (hours) tax rate Tax base profit) on TTR Page 43   Corporate income tax 1 online 42 24% taxable profits 25.19 Doing Business 2018 Chile Figure – Paying Taxes in Chile and comparator economies – Measure of Quality 90 83.45 80 70 58.36 60 Index score 47.94 50 40.51 40 30 19.24 20 7.80 10 0 Chile Argentina Brazil Mexico Peru OECD high income Details – Paying Taxes in Chile Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate (% of Notes contribution (number) Payments (hours) tax rate Tax base profit) on TTR Corporate income tax 1 online 42 24% taxable profits 25.19 Employment taxes 1 online 125 4.5% gross salaries 5.13 Property tax 1 online 1.2% property value 1.78 Municipal tax 1 online 0.5% capital 0.84 Vehicle license tax 1 fixed rate 3 UTM 0.02 Value added tax (VAT) 1 online 125 19% value added 0.00 not included Municipal tax on 0 online and fixed fee 0.00 small cleanliness jointly amount Fuel tax 1 included in the 0.00 price of fuel Employee paid - Social 0 online and 19.1% gross salaries 0.00 withheld security contributions jointly Totals 7 291 33.0 Details – Paying Taxes in Chile – Tax by Type Taxes by type Answer Profit tax (% of profit) 25.2 Labor tax and contributions (% of profit) 5.1 Other taxes (% of profit) 2.6 Details – Paying Taxes in Chile – Measure of Quality Page 44   Doing Business 2018 Chile Details – Paying Taxes in Chile – Measure of Quality Answer Score Post ling index (0-100) 58.36 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process Restricted to international traders and for xed assets acquisition only after having excess input VAT for 6 consecutive tax periods Percentage of cases exposed to a VAT audit (%) 50% - 74% Is there a mandatory carry forward period? Yes Time to comply with VAT refund (hours) 21.0 58 Time to obtain a VAT refund (weeks) 40.2 28.64 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) 30.5 46.79 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 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. Page 45   With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Chile 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 Chile government authorities. OECD high OECD high Indicator Chile income income Overall Best Performer Time to export: Border compliance (hours) 60 12.7 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 290 149.9 149.9 0.00 (19 Economies) Time to export: Documentary compliance 24 2.4 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 50 35.4 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 54 8.7 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 290 111.6 111.6 0.00 (27 Economies) Time to import: Documentary compliance 36 3.5 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 50 25.6 25.6 0.00 (30 Economies) Figure – Trading across Borders in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.92: Regional Average (OECD high income) 82.09: Mexico (Rank: 63) 80.56: Chile (Rank: 68) 71.45: Peru (Rank: 92) 65.36: Argentina (Rank: 116) 59.78: Brazil (Rank: 139) 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 Chile – Time and Cost Time Cost 70 350 60 290 290 60 54 300 50 250 Time (hours) Cost (USD) 40 36 200 30 24 150 20 100 50 50 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 47   Doing Business 2018 Chile Figure – Trading across Borders in Chile – Time and Cost Time Cost 70 350 60 290 290 60 54 300 50 250 Time (hours) Cost (USD) 40 36 200 30 24 150 20 100 50 50 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Chile Characteristics Export Import Product HS 74 : Copper and articles thereof HS 8708: Parts and accessories of motor vehicles Trade partner China United States Border San Antonio port San Antonio port Distance (km) 121 121 Domestic transport time (hours) 9 9 Domestic transport cost (USD) 345 345 Details – Trading across Borders in Chile – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 2.5 100.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 60.0 190.0 Import: Clearance and inspections required by customs authorities 2.5 100.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 54.0 190.0 Details – Trading across Borders in Chile – Trade Documents Export Import Bill of lading Bill of lading Certificate of origin Certificate of origin Page 48   Domestic transport cost (USD) 345 345 Doing Business 2018 Chile Details – Trading across Borders in Chile – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 2.5 100.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 60.0 190.0 Import: Clearance and inspections required by customs authorities 2.5 100.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 54.0 190.0 Details – Trading across Borders in Chile – Trade Documents Export Import Bill of lading Bill of lading Certificate of origin Certificate of origin Commercial invoice Commercial invoice Customs Export Declaration Customs Import Declaration Packing list Packing list SOLAS certificate Tax Certificate Terminal Handling receipt 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 Terminal Handling receipt Doing Business 2018 Chile 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 CLP 17,051,279.00 Court name Santiago Civil Court City Covered Santiago OECD high OECD high Indicator Chile income income Overall Best Performer Time (days) 480 577.8 577.8 164.00 (Singapore) Cost (% of claim value) 28.6 21.5 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 9.0 11.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 67.01: Mexico (Rank: 41) 66.76: Regional Average (OECD high income) 66.00: Brazil (Rank: 47) Page 50   of judicial processes Quality Business Doing index (0-18) 2018 Chile 9.0 11.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 67.01: Mexico (Rank: 41) 66.76: Regional Average (OECD high income) 66.00: Brazil (Rank: 47) 62.81: Chile (Rank: 56) 60.70: Peru (Rank: 63) 55.66: Argentina (Rank: 102) 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 Chile – Time and Cost Time Cost 1200 40 35.7 995 33.0 35 1000 Cost (% of claim value) 28.6 30 800 731 Time (days) 22.5 22.0 21.5 25 577.8 600 20 480 426 341 15 400 10 200 5 0 0 Argentina Brazil Chile Mexico OECD high income Peru Figure – Enforcing Contracts in Chile and comparator economies – Measure of Quality Chile 1.5 3.5 1 3 Argentina 2 4 1 4.5 Brazil 3 3 3 4.1 Mexico 2.5 3.3 0.5 3.8 Peru 2.5 2.5 0 3.5 OECD high income 2.5 2.9 2 3.6 0 2 4 6 8 10 12 Page 51   14 0 0 Argentina Brazil Chile Mexico OECD high income Peru Doing Business 2018 Chile Figure – Enforcing Contracts in Chile and comparator economies – Measure of Quality Chile 1.5 3.5 1 3 Argentina 2 4 1 4.5 Brazil 3 3 3 4.1 Mexico 2.5 3.3 0.5 3.8 Peru 2.5 2.5 0 3.5 OECD high income 2.5 2.9 2 3.6 0 2 4 6 8 10 12 14 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Chile Indicator Time (days) 480 Filing and service 30 Trial and judgment 270 Enforcement of judgment 180 Cost (% of claim value) 28.6 Attorney fees 15 Court fees 5 Enforcement fees 8.6 Quality of judicial processes index (0-18) 9.0 Court structure and proceedings (-1-5) 3.0 Case management (0-6) 3.5 Court automation (0-4) 1.0 Alternative dispute resolution (0-3) 1.5 Details – Enforcing Contracts in Chile – Measure of Quality Page 52   Alternative dispute resolution (0-3) 1.5 Doing Business 2018 Chile Details – Enforcing Contracts in Chile – Measure of Quality Answer Score Quality of judicial processes index (0-18) 9.0 Court structure and proceedings (-1-5) 3.0 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, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 3.5 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.5 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 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 Yes 1.0 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 Chile 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) 1.5 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 0.0 2.a. Is voluntary mediation or conciliation available? No 2.b. Are mediation, conciliation or both governed by a consolidated law or n.a. 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., n.a. 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 Chile 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) OECD high OECD high Indicator Chile income income Overall Best Performer Recovery rate (cents on the dollar) 40.8 71.2 71.2 93.1 (Norway) Time (years) 2.0 1.7 1.7 0.4 (Ireland) Page 55   Cost (% of estate) 14.5 9.1 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Chile OECD high OECD high Indicator Chile income income Overall Best Performer Recovery rate (cents on the dollar) 40.8 71.2 71.2 93.1 (Norway) Time (years) 2.0 1.7 1.7 0.4 (Ireland) Cost (% of estate) 14.5 9.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 12.0 12.1 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Chile and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.12: Regional Average (OECD high income) 72.31: Mexico (Rank: 31) 59.47: Chile (Rank: 52) 47.46: Brazil (Rank: 80) 45.69: Peru (Rank: 84) 41.24: Argentina (Rank: 101) 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 Chile – Time and Cost Time Cost 4.5 20 4.0 18.0 4 16.5 3.5 14.5 3.1 15 Cost (% of estate) 3 12.0 Time (years) 2.4 2.5 2.0 9.1 10 2 1.8 1.7 7.0 1.5 5 1 0.5 0 0 Argentina Brazil Chile Mexico OECD high income Peru Figure – Resolving Insolvency in Chile and comparator economies – Measure of Quality Chile 4.5 2.5 3 2 Page 56   0 0 Argentina Brazil Chile Mexico OECD high income Peru Doing Business 2018 Chile Figure – Resolving Insolvency in Chile and comparator economies – Measure of Quality Chile 4.5 2.5 3 2 Argentina 4 2.5 1 2 Brazil 5.5 2.5 3 2 Mexico 5.5 2.5 2 1.5 Peru 3.5 2.5 3 0.5 OECD high income 5.4 2.8 2.3 1.9 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 Chile and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 80 71.2 67.6 70 60 50 40.8 40 29.7 30 21.5 20 12.7 10 0 Chile Argentina Brazil Mexico Peru OECD high income Details – Resolving Insolvency in Chile Indicator Answer Explanation Proceeding liquidation Mirage would attempt a reorganization proceeding, which is going to involve in-court (after an negotiations with creditors of different classes, including secured creditors. It is likely that an attempt at agreement is not reached, so that the reorganization proceeding will be converted into a reorganization) liquidation proceeding. At this stage creditors may choose to carry out a simplified judicial liquidation proceeding or an ordinary judicial liquidation which could include the sale of movable and immovable property. Outcome piecemeal sale Once the liquidation proceeding starts, the trustee will be in charge of administration of the debtor’s assets. The trustee will sell Mirage’s assets separately and distribute the proceeds of the sale among the creditors based on the priorities established. Time (in years) 2.0 The Reorganization procedure is relatively fast, since in a few months (3 to 5) the Page 57   reorganization agreement is approved or rejected and, generally, before the debtor fails to Chile Argentina Brazil Mexico Peru OECD high income Doing Business 2018 Chile Details – Resolving Insolvency in Chile Indicator Answer Explanation Proceeding liquidation Mirage would attempt a reorganization proceeding, which is going to involve in-court (after an negotiations with creditors of different classes, including secured creditors. It is likely that an attempt at agreement is not reached, so that the reorganization proceeding will be converted into a reorganization) liquidation proceeding. At this stage creditors may choose to carry out a simplified judicial liquidation proceeding or an ordinary judicial liquidation which could include the sale of movable and immovable property. Outcome piecemeal sale Once the liquidation proceeding starts, the trustee will be in charge of administration of the debtor’s assets. The trustee will sell Mirage’s assets separately and distribute the proceeds of the sale among the creditors based on the priorities established. Time (in years) 2.0 The Reorganization procedure is relatively fast, since in a few months (3 to 5) the reorganization agreement is approved or rejected and, generally, before the debtor fails to do so, it is passed to the liquidation stage. In comparison, the liquidation procedure takes longer than the reorganization process, since the ordinary credit verification period is longer (30 business days), after which a period of recognition and objection of verified credits is established, several Boards of Creditors And subsequently the sale of the property (6 to 18 months). Finally, it must be taken into account that the processing time will vary from court to court, as the workload between them is not uniform. Cost (% of 14.5 The costs associated with the reorganization proceeding which is then converted into estate) liquidation, like in the case of Mirage, would amount to approximately 14.5% of the value of the Mirage’s estate, according to the following breakdown: - Attorney’s fees: attorneys could charge a maximum of 8% (according to the fee schedule of the Bar of Valparaiso). - Fees of insolvency administrators: 6% is a fixed rate (article 34 of the Commercial Code). However, in practice the trustees could obtain around 10% of the value of the debtor’s estate. - Costs of notification: The Official Journal has a fixed cost that could be around 0.5% including the additional costs related to publication. Recovery rate (cents on the 40.8 dollar) Details – Resolving Insolvency in Chile – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 12.0 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable Page 58   to pay its debts dollar) Doing Business 2018 Chile Details – Resolving Insolvency in Chile – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 12.0 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 4.5 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome 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 Yes 1.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (a) Yes over all 0.5 pre- commencement creditors, secured or unsecured Reorganization proceedings index (0-3) 2.0 Which creditors vote on the proposed reorganization plan? (c) Other 1.0 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 Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 3.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Page 59   Creditor Doing participation Business 2018 index (0-4) Chile 3.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial Yes 1.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to 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 Chile 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 Chile Answer Hiring Page 61   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Chile Details – Labor Market Regulation in Chile Answer Hiring Fixed-term contracts prohibited for permanent tasks? No 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) 393.9 Ratio of minimum wage to value added per worker 0.2 Maximum length of probationary period (months) n.a. Working hours Standard workday 9.0 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) 30.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 15.0 Paid annual leave for a worker with 5 years of tenure (working days) 15.0 Paid annual leave for a worker with 10 years of tenure (working days) 15.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 15.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? Yes Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? Yes 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 are dismissed? Chile No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.3 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure 4.3 Severance pay for redundancy dismissal for a worker with 5 years of tenure 21.7 Severance pay for redundancy dismissal for a worker with 10 years of tenure 43.3 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 23.1 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)? 126.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? No Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 12.0 Business Reforms in Chile 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 Chile implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2016 Paying Taxes: Chile made paying taxes more costly for companies by increasing the corporate income tax rate. Resolving Insolvency: Chile made resolving insolvency easier by clarifying and simplifying provisions on liquidation and reorganization, introducing provisions to facilitate the continuation of the debtor’s business during insolvency, establishing a public o ce responsible for the general administration of insolvency proceedings and creating specialized insolvency courts. DB2014 Page 63   Starting a Business: Chile made starting a business easier by creating a new online system for business registration. Minimum contribution period for unemployment protection (months)? 12.0 Doing Business 2018 Chile Business Reforms in Chile 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 Chile implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2016 Paying Taxes: Chile made paying taxes more costly for companies by increasing the corporate income tax rate. Resolving Insolvency: Chile made resolving insolvency easier by clarifying and simplifying provisions on liquidation and reorganization, introducing provisions to facilitate the continuation of the debtor’s business during insolvency, establishing a public o ce responsible for the general administration of insolvency proceedings and creating specialized insolvency courts. DB2014 Starting a Business: Chile made starting a business easier by creating a new online system for business registration. DB2012 Starting a Business: Chile made business start-up easier by starting to provide an immediate temporary operating license to new companies, eliminating the requirement for an inspection of premises by the tax authority before new companies can begin operations and allowing free online publication of the notice of a company’s creation. Getting Credit: Chile strengthened its secured transactions system by implementing a uni ed collateral registry and a new legal framework for nonpossessory security interests. Trading across Borders: Chile made trading across borders faster by implementing an online electronic data interchange system for customs operations. DB2011 Starting a Business: Chile made business start-up easier by introducing an online system for registration and for ling the request for publication. Protecting Minority Investors: An amendment to Chile’s securities law strengthened investor protections by requiring greater corporate disclosure and regulating the approval of transactions between interested parties. Page 64   Protecting Minority Investors: An amendment to Chile’s securities law strengthened investor protections by requiring greater corporate disclosure Doing Business Chile the approval of transactions between interested parties. and regulating 2018 Page 65